ADOPTED FY 2012 OPERATING AND CAPITAL BUDGET FIVE-YEAR OPERATING FORECAST AND CAPITAL PROGRAM FY 2012 - FY 2016 July 1, 2011 – June 30, 2012 Adopted FY 2008-09 Operating and Capital Budget METRO 0 May 2008 Valley Metro Rail, Inc. Phoenix, Arizona Adopted Operating and Capital Budget Fiscal Year 2011/2012 Five-Year Operating Forecast and Capital Program FY 2012 through FY 2016 (July 1, 2011 through June 30, 2016) Board of Directors Chairman – Councilman Tom Simplot, Phoenix Vice Chairman – Councilman Dennis Kavanaugh, Mesa Mayor Bob Barrett, Peoria Councilmember Shana Ellis, Tempe Councilman Rick Heumann, Chandler Mayor Elaine Scruggs, Glendale Executive Management Team Stephen R. Banta, Chief Executive Officer Raymond Abraham, Chief Operations Officer John Farry, Community & Government Relations Director Wulf Grote, Planning & Development Director Jay Harper, Chief of Safety and Security Mike Ladino, General Counsel John McCormack, Finance & Administration Director Adopted FY 2011-2012 Operating and Capital Budget METRO i May 2011 Annual Budget Table of Contents METRO Organization ................................................................................................................ 1 METRO Vision ........................................................................................................................... 2 FY 2011 Accomplishments ....................................................................................................... 2 FY 2012 Goals and Objectives ................................................................................................. 4 Rail Operations Service Plan .................................................................................................. 6 Total Financial Program ........................................................................................................... 7 Budget Analysis ................................................................................................. 9 Staffing Requirements ............................................................................................................ 10 FY 2011-2012 Budgets: Operating Budget Revenue Operations Budget ........................................................................... 12 Future Project Development Budget .............................................................. 13 Agency Operating Budget ............................................................................... 14 Agency Overhead Allocation .......................................................................... 15 Capital Budget 20-Mile METRO Initial Segment Budget.......................................................... 16 Northwest Extension Phase I Budget ............................................................. 17 Central Mesa LRT Extension Budget .............................................................. 18 South Tempe Capital Project Budget ............................................................. 19 Non-Prior Rights Utilities Relocation Budget ................................................ 20 ARRA Funded Construction Project – Systemwide Improvements ............. 20 CP/EV Project Budget Overview ............................................................................................ 21 Funds Flow FY 2012................................................................................................................ 22 Pay Grades and Ranges ......................................................................................................... 23 METRO Agency Organizational Chart ................................................................................... 25 Adopted FY 2011-2012 Operating and Capital Budget METRO ii May 2011 5 Year Plan Table of Contents 1. Executive Summary METRO Services ................................................................................................ 26  Operations & Maintenance ...................................................................... 27  Planning & Development ........................................................................ 27 Goals (FY 2012 thru FY 2016)............................................................................ 28 Five-Year Plan Summary ................................................................................... 31 2. Five-Year Operating Forecast Uses & Sources of Funds ................................................................................... 34 Operations & Maintenance Cost Estimate FY 2012-2016 .................................. 37 Five Year Fares, Costs and Member City Funding ............................................. 38 Project Development Planning ........................................................................... 38 3. Five-Year Capital Program All Projects.......................................................................................................... 40 CP/EV LRT Project ............................................................................................. 44 High Capacity Transit Projects ........................................................................... 46 Northwest Extension ........................................................................................... 47 Central Mesa Extension ..................................................................................... 49 Tempe South Corridor ........................................................................................ 50 Phoenix West Extension ..................................................................................... 51 4. Appendix A-Budget Process............................................................................................... 53 B-Glossary of Terms and Acronyms ................................................................... 55 FY 2011-2012 Operating and Capital Budget METRO iii May 2011 METRO ORGANIZATION Valley Metro Rail, Inc. (METRO) is a public non-profit corporation whose members are the cities of Chandler, Glendale, Mesa, Peoria, Phoenix, and Tempe. METRO was created to manage the design, construction, and operation of the Light Rail Transit (LRT) System within the Metropolitan Area. The Board of Directors includes the mayors of the member cities or their designated representatives. The Board of Directors establishes overall policies and provides general oversight of the METRO agency and its responsibilities. The Chief Executive Officer (CEO) is responsible for implementing the agency vision and the day-to-day management of the organization. The CEO plans, coordinates, and directs the activities of the Management staff in carrying out the organization’s responsibilities. The METRO Staff includes employees managing operations, performing maintenance, directing planning, design and construction of new rail lines. METRO staff are supported by contracted personnel with specialized experience in light rail planning, design, construction, and operations. The following chart depicts the policy organization for METRO and the relationships to key stakeholders. METRO Policy Organization Adopted FY 2011-2012 Operating and Capital Budget METRO 1 May 2011 METRO VISION In June of 2004, the METRO Board of Directors adopted a Vision Statement to describe what METRO will be when it has achieved a high level of success. The Vision was developed by volunteers of the METRO staff as part of the strategic planning effort that began with the development of the Vision statement and continued throughout this fiscal year. The Vision Statement of METRO is: “METRO will be recognized as a trusted and respected community partner and visionary leader that provides a premier regional rail transit system with a commitment to customer service, quality and safety, which enhances quality of life and is a point of pride for our community.” FY 2011 ACCOMPLISHMENTS  METRO ridership continues to climb serving 12.6 million riders in 2010, 11 percent more than in 2009. Growth continues in 2011. Adopted FY 2011-2012 Operating and Capital Budget METRO 2 May 2011  Delivered passenger service achieving the following results: Benchmark On Time Performance Operating Cost Per Boarding Average Fare Farebox Recovery Ratio            Target 93% $3.19 $0.80 25% 2010 Actual 96% $2.72 $0.76 28% Hand Held Verifiers (HHV’s) were deployed to better identify fare violators and track fares across the rail corridor. Average Fare per ride increased from $.76 in FY2010 to over $.80 in FY2011. Reduced number of collisions in 2010 by 52 percent vs. 2009. Established security bulletin boards within METRO facilities and implemented the METRO Security Committee to raise awareness, educate, and respond to security requirements in a rail transit environment Renewed the partnership with US Airways Center and Phoenix Suns to allow event tickets to serve as light rail pass. Generating $412,308 in system advertising revenue in FY2011. Added a 120-space park-and-ride to serve the 7th Avenue/Camelback station. In addition, installed shade canopies at this new lot and existing lots at 19th Avenue and Central/Camelback. Completed construction management for the Arizona Avenue BRT Project. Received final $61.3M of $587.2M FFGA payment from Federal Transit Administration for Central Phoenix / East Valley LRT System completed on time and within budget. The Central Mesa light rail extension was recommended for funding in the FTA New Starts Report in the amount of $75 million. The President requested $37.5 million in the FY 2012 budget request to Congress. Received local and regional approval of 2.6-miles of modern streetcar in the Mill Avenue corridor in Tempe. Initiated the South Central Feasibility Study in Phoenix. Awards Received by METRO  June 2010  Sept 2010  Oct 2010 Desert Peaks Awards in the category of Public Partnership to METRO and its city partners Phoenix, Tempe and Mesa – Maricopa Association of Governments Government Finance Officers Association Award (GFOA) for Comprehensive Annual Financial Report (CAFR) for fiscal year ended June 30, 2009 Silver Addy Award in the category of Public Service, Audio/Visual for the METRO “On Track” posters Adopted FY 2011-2012 Operating and Capital Budget METRO 3 May 2011  Oct 2010  Oct 2010   Jan 2011 Mar 2011 AdWheel Award in the Advertisement and Promotion category for the “Your Life on Track Poster Series” – American Public Transportation Association Beautification Award, Award of Distinction for the Tempe Town Lake Light Rail Bridge – City of Tempe Smart Growth Award – Urban Land Institute Bronze ADDY Award for the “Stop on Red” train wrap FY 2012 GOALS AND OBJECTIVES Goals are based on the following keys to a successful transportation system that connects people to life:  A quality human resource  A system in a state of good repair  Customer-focused service  Coordinated and cost-effective system expansion  Sound relationships with public and private stakeholders 1. Operate a safe, efficient, customer-focused, reliable METRO system.  Maintain an efficient operation that meets established schedules and operational baselines.  Manage an effective safety and security program.  Ensure timely and effective customer communication.  Maximize fare revenues through continued coordination with regional and local entities to ensure effective fare policies across all public transportation modes.  Continue development of information systems to support rail operations. 2. Maintain sound and trusted relationships with public and private stakeholders including improved coordination with all public transportation operators.  Work with other public transportation operators in the region to optimize passenger usage of the entire public transportation system.  Maintain professional relationships with the media resulting in objective news coverage.  Successful implementation of marketing strategies that maximize ridership from event venues (e.g., Phoenix Suns, AZ Diamondbacks, ASU Sun Devils, etc.).  Continue public involvement activities related to future METRO extensions.  Continue to improve and maintain a sound relationship with the FTA to foster federal support for future rail projects. Adopted FY 2011-2012 Operating and Capital Budget METRO 4 May 2011  Maintain sound relationships with Congressional leaders and Arizona delegation members that maximizes federal funding for the METRO system, especially related to the annual appropriations process and the reauthorization of SAFETEA-LU. 3. Expansion of the METRO system through effective planning, design, and construction of the high capacity/light rail transit element of the Regional Transportation Plan.  Advance the development of the Central Mesa, Tempe Streetcar, Northwest and Phoenix West high capacity/light rail transit corridors that is consistent with agreed upon schedules.  Actively pursue regional, state, and federal funding opportunities to facilitate implementation of the region’s high capacity transit program.  Actively explore ways to reduce future project costs to address shortfalls in regional funding for the transit program.  Develop corridor planning studies as assigned through the regional planning process. 4. Maintain organizational sustainability and a sound human resource.  Strive to create a work environment where our employees, our most valued assets, are energized by exceeding the expectations of our customers.  Provide professional development and training opportunities as needed to achieve our goals and objectives.  Retain and promote our best people.  Work with regional transit partners to implement administrative efficiencies and develop cost savings through coordination and consolidation of work effort.  Assure strict compliance with state, local and federal laws, regulations and procedures including the application of best practices in all business activities. Adopted FY 2011-2012 Operating and Capital Budget METRO 5 May 2011 RAIL OPERATIONS SERVICE PLAN Service Frequency FY 2012 Plan: Weekday trains will run with two cars at 12 minute intervals during peak hours and 15 to 20 minute intervals off peak. Weekends do not require peak service trains and will operate with one or two cars at 15 to 20 minute headways. Service headways and train lengths will be adjusted over time to accommodate growth and service patterns. Time of Day Monday - Friday 4:40 am to 7:30 am Monday - Friday 7:30 am to 6:30 pm Monday - Thursday 6:30 pm to 12:00 am Friday - 6:30 pm to 2:00 am Saturday - 5:00 am to 7:00 pm Saturday - 7:00 pm to 2:00 am Sunday - 5:00 am to 11:00 pm Service Frequency 20 minutes 12 minutes 20 minutes 20 minutes 15 minutes 20 minutes 20 minutes Eight weekdays are currently scheduled for holiday schedule frequency (Sunday schedule). Ridership and Fare Revenue: Total Ridership is forecasted at 12.500 million passengers for the year with fare revenues generating $10.035 million. Over the course of the fiscal year 2012, average weekday boardings are forecasted at 38,876 while Saturday and Sunday average ridership are forecasted at 27,507 and 20,833 per day respectively. Annual Ridership / Fares Total Rides Weekday Saturday Sunday Average 38,876 27,507 20,833 Total Ridership and Fare Revenue Fare Assumption 9,835,506 1,457,888 1,249,982 $ $ $ 0.80 0.80 0.80 $ 7,868,405 $ 1,166,310 $ 999,986 12,543,376 $ 0.80 $ 10,034,701 Average fare per ride is forecasted at $0.80 cents per ride, consistent with FY 2011’s budget. Adopted FY 2011-2012 Operating and Capital Budget METRO 6 May 2011 TOTAL FINANCIAL PROGRAM The FY 2012 Operating and Capital Budget has been prepared with the goal of delivering a fiscally prudent, balanced budget. Last year, the Board approved a total of $90 million for the FY 2011 Budget. Total expenditures for FY 2012 are estimated to be $87.7 million. The unexpended balance for FY 2011 capital expenditures has been reprogrammed into the project cash flows for expenditure in FY12 and future years. Uses of Funds - The FY 2012 Budget includes anticipated operating and capital expenditures in the amount of approximately $87.7 million to support program elements during the period of July 1, 2011 through June 30, 2012, as follows: Uses of Funds ($,000) FY 2012 Operating Activities: Revenue Operations Future Project Development Agency Operating Budget Capital Projects: 20-Mile METRO Initial Segment Northwest Extension Non-Prior Rights Utilities Relocations Other Capital Projects: Central Mesa Extension South Tempe Extension CNPAs - 20-Mile Initial Segment ARRA - Phoenix P& R Improvements ARRA - RPTA Ariz Avenue BRT Systemwide Improvements Subtotal Capital before Debt Service Capital Project Debt Service: Debt Service - Interest Debt Service - Principal Total Uses of Funds FY 2011 Amended Change Budget Analysis Note # 35,086 8,146 1,084 44,315 33,721 9,619 1,012 44,352 1,365 (1,474) 72 (37) 5,301 8,573 2,638 19,503 5,798 246 (14,202) 2,775 2,392 1 2 3 16,525 4,262 675 37,975 10,277 2,461 3,113 347 1,171 42,916 6,248 4,262 (2,461) (3,113) (347) (496) (4,942) 4 4 5 5 2,750 2,664 2,750 - 2,664 87,704 90,018 (2,314) Note: See page 9 for budget analysis notes. Adopted FY 2011-2012 Operating and Capital Budget METRO 7 May 2011 Sources of Funds - The FY 2012 Operating and Capital Budget will be funded with a combination of Fare Revenues, Member City contributions, Public Transportation Funds, Federal 5309 New Starts, 5307 and Fixed Guideway Preventative Maintenance, Congestion Mitigation and Air Quality funds (CMAQ), and other local funding. The FY 2012 Budget includes anticipated capital and operating sources of funds in the amount of approximately $87.7 million, as follows: Sources of Funds ($,000) FY 2012 Operating Activities: Fare Revenue Advertising Revenue Federal 5307 PM Federal FG PM Federal 5339 Federal CMAQ Member Cities MAG / RPTA (RARF) PTF Sales Tax Revenue Capital Projects: FTA - Section 5309 Federal CMAQ Federal ARRA Member Cities PTF Bond Revenue PTF Sales Tax Revenue Total Sources of Funds FY 2011 Amended Change Budget Analysis Note # 10,035 300 324 996 1,380 100 23,758 1,000 6,422 44,315 9,498 250 240 1,400 750 23,432 1,000 7,782 44,352 537 50 324 756 (20) (650) 326 (1,360) (37) 6 7 3,300 14,410 (12,808) 14,506 23,982 43,389 61,250 8,822 2,690 (80,042) 12,950 39,996 45,666 (57,950) 5,588 (2,690) 67,234 1,556 (16,014) (2,277) 9 10 5 11 8 8 87,704 90,018 (2,314) 8 Note: See page 9 for budget analysis notes. Negative Sources of Funds reflect Regional PTF reimbursements to Member Cities for the CPEV 20 Mile Initial Segment Capital Project and PTF revenues to reimburse the City of Phoenix for the Phoenix West alternatives analysis. Adopted FY 2011-2012 Operating and Capital Budget METRO 8 May 2011 Adopted FY 2011-12 Operating and Capital Budget BUDGET ANALYSIS The following is an analysis of the major changes in the FY 2012 Proposed Budget versus the FY 2011 Amended Budget. The number in the "Note" column corresponds to the "Note" column in the "Uses of Funds" and "Sources of Funds" tables located in the Total Financial Program. See Pages 7 and 8. Note Budget Analysis 1 The project closeout phase of the CP/EV LRT initial 20-mile segment is nearing completion. 2 Payments for Real Estate Acquisition for the NW Extension project are reaching conclusion in FY 2012. 3 A significant increase in NPR utility relocation is due to increased activity on the Mesa Extension. 4 Design, Real Estate Acquisition and Utility Relocation are commencing for the Central Mesa LRT Extension. Preliminary design commences for the Tempe Streetcar Project. 5 Federal ARRA project funding was completed in FY 2011. 6 Fare revenues are based on ridership estimates and average fares per ride. See Page 6 for details. 7 Advertising revenues are forecast for light rail vehicle advertising wraps and station platform advertisements. Growth is due to improving economy. 8 PTF sales tax revenues are forecast to be $44 million for FY 2012. The first phase of PTF bonding was completed in June 2009. Of the 2009 Series Bonds, $14.5 million will be expended in FY 2012 to fund capital projects. The initial Federal Section 5309 funding for the Central Mesa Extension is projected to fund $3.3 million in FY 2012. The final installment of the CPEV FFGA totaling $61.3 million was received in August of 2010. The FY 2011 revenue for CMAQ is the forecast for the Central Mesa LRT Extension and the Tempe Streetcar Projects. The $14.4 million CMAQ fund request is part of the 2010 Regional Transportation Plan Update and the TIP. Negative Revenues represent reimbursements to Member Cities for capital contributions on the CPEV 20 mile project. Funding is from Regional PTF sales tax proceeds. 9 10 11 Adopted FY 2011-2012 Operating and Capital Budget METRO 9 May 2011 STAFFING REQUIREMENTS Rail Operations Personnel – In light of continuing funding constraints, METRO is proposing to reduce and defer existing positions and add others to ensure system reliability. The proposed changes are as follows: Authorized Positions FY 2011 84 Positions Reduced : Rail Design & Construction Director -1 Positions Deferred: Traction Power Systems Technician Network Support Analyst 3 1 Positions Added: Senior Construction Project Coordinator Signals & Comm Systems Technician Helpdesk Support Specialist Revised Positions for FY 2012 1 3 1 88 Reasons for Staffing Changes 1. In late 2010, METRO consolidated the Design and Construction Division and the Project Development Division into a single Planning and Development Division. The consolidation eliminates one Director position in the organization. To better serve the design and construction needs, a Senior Construction Project Coordinator has been hired. With salary differential, a net savings to the overall budget has been realized. 2. Since the line opening in December 2008, METRO employees have successfully maintained the LRT system elements. METRO experienced minimal failures throughout the alignment and had assistance from contractors for repairs covered under warranty. As is customary, in the third year of operation some of the preventative maintenance inspections become more detailed. As the system ages, METRO expects a larger volume of corrective maintenance hours and staff members required to keep the 20-mile system in the state of good repair. In FY 2012, three technician positions are being added to address the need for greater preventative maintenance requirements. Four technician positions are being deferred for hire to FY 2013. Adopted FY 2011-2012 Operating and Capital Budget METRO 10 May 2011 In addition, in December of 2011 METRO will transition to self-perform vehicle maintenance eliminating $900,000 annual contractor fee and incentive pay plus a reduction of staff costs estimated at $700,000 per year. These cost savings will offset future year preventative maintenance cost increases. 3. In an effort to reduce expense, METRO has chosen to self-perform the Help Desk function by adding 1 Help Desk Specialist position. This change will reduce the current IT Support contact by $147,000, resulting in a net savings to METRO of $73,000. Staffing Costs – The FY 2012 Budget includes salary, benefit, and corresponding overhead costs based on the following assumptions: 1. 88 FTE Staff 2. No base wage increases The funding for METRO staff authorized in the FY 2012 Budget will be used to reimburse RPTA for their costs to support METRO staffing requirements. Pages 12-20 provide lineitem salary and benefit cost information applied to the various FY 2012 budgets. Fiscal Impact – With the hire of three deferred maintenance positions, the realignment of Design and Construction positions, and the new IT Help Desk position, the overall salary and fringe benefit cost is $8.6 million for FY 2012, up by $172,000 (2.0%) from $8.4 million in FY2011. Staff Listing – A listing of the METRO FY 2012 Pay Grades and Ranges is included on page 23 and 24. Organizational Chart – The organization chart attached at the end of this document illustrates the METRO management organization. It includes the proposed position included in the FY 2012 Budget. FIVE-YEAR OPERATING AND CAPITAL PROGRAM The By-Laws of the Corporation call for the Board of Directors to approve a Five-Year Operating and Capital Program annually, which identifies anticipated operating costs, capital projects and costs, and the associated funding sources. The FY 2012 – FY 2016 Five-Year Operating and Capital Program will be completed and submitted to the Board of Directors for approval along with the FY 2012 Operating and Capital Budget. (see page 26) Adopted FY 2011-2012 Operating and Capital Budget METRO 11 May 2011 FY 2011-12 Adopted METRO Revenue Operations Budget 2011/2012 Adopted Budget Sources of Funds Mesa Fare Revenue Phoenix Fare Revenue Tempe Fare Revenue Federal 5307 PM Federal Fixed Guideway Preventative Maintenance Mesa Advertising Phoenix Advertising Tempe Advertising Mesa Base Cost Contributions Phoenix Base Cost Contributions Tempe Base Cost Contributions Mesa Local Security Phoenix Local Security Tempe Local Security $ 934,221 6,241,382 2,859,098 324,298 996,108 14,670 201,240 84,090 570,418 14,398,945 5,765,654 381,075 1,261,037 1,053,355 35,085,591 $ Expenditures Salaries and Fringe Benefits RPTA Overhead Transportation Contractors Labor & Materials Fare Inspection & Security Propulsion Power Vehicle Maintenance Contractor Labor & Materials Systems & Facilities Maintenance Contractors SFM Material / Supplies / Other Direct Costs Utilities General & Administrative Costs Consultants Liability Insurance Contingency Reserve $ 4,319,821 313,030 9,849,722 3,567,841 2,594,381 5,750,600 1,681,513 1,542,512 1,295,397 1,615,603 490,380 1,351,378 713,413 35,085,591 $ 2010/11 Amended Budget $ $ 884,239 5,907,464 2,706,135 240,000 12,225 167,700 70,075 612,485 14,624,292 5,873,250 371,780 1,230,280 1,020,946 33,720,872 $ 4,035,000 292,000 8,640,423 3,470,006 2,623,866 6,745,600 1,683,336 1,420,800 1,513,880 1,419,511 476,450 1,250,000 150,000 33,720,872 Amount Increase/ (Decrease) $ 49,981 333,917 152,963 324,298 756,108 2,445 33,540 14,015 (42,067) (225,347) (107,596) 9,295 30,757 32,409 1,364,719 $ 284,821 21,030 1,209,299 97,835 (29,484) (995,000) (1,823) 121,712 (218,483) 196,092 13,930 101,378 563,413 1,364,719 Allocation of Operating Costs Phoenix Base Costs Regional Security Local Security $ 21,159,805 567,490 1,261,037 22,988,332 (7,328,350) 15,659,982 65.521% Less Fares,Advertising & Fed PM Distributed Phoenix Net Contribution Tempe Base Costs Regional Security Local Security 28.879% Less Fares,Advertising & Fed PM Distributed Tempe Net Contribution Mesa Base Costs Regional Security Local Security 5.600% Less Fares,Advertising & Fed PM Distributed Mesa Net Contribution Total Operating Costs Adopted FY 2011-2012 Operating and Capital Budget METRO $ 20,292,958 567,490 1,230,280 22,090,728 (6,236,156) 15,854,572 $ 866,846 30,757 897,603 (1,092,194) (194,590) 8,841,792 237,160 1,053,355 10,132,307 (3,313,298) 6,819,009 8,479,572 237,160 1,020,946 9,737,678 (2,843,482) 6,894,196 362,220 32,409 394,629 (469,816) (75,187) 1,541,527 42,350 381,075 1,964,952 (1,013,459) 951,493 1,478,336 42,350 371,780 1,892,466 (908,200) 984,265 63,191 9,295 72,486 (105,258) (32,772) 35,085,591 12 $ $ 33,720,872 $ 1,364,719 May 2011 FY 2011-12 Adopted Future Project Development Budget 2011/2012 Adopted Budget Sources of Funds FTA - Section 5339 Chandler * Peoria * Phoenix * Mesa MAG RPTA (RARF/Other) PTF Revenue Bonds PTF Revenue Sales Tax FHWA - CMAQ $ 1,380,000 98,000 55,000 (1,209,000) 300,000 500,000 500,000 6,421,681 100,000 8,145,681 $ Expenditures Salaries and Fringe Benefits RPTA Overhead Consultants - Planning/Environmental Consultants - Other Training & seminars Advertising Printing Postage Public meetings & information Other direct expenditures LRT project office expense Local meetings & mileage Business Travel LRT project capital outlay Agency Overhead Allocation $ 2,358,694 170,920 4,563,190 258,500 7,000 5,000 15,000 5,500 2,300 20,700 24,520 714,357 8,145,681 $ 2010/11 Amended Budget $ $ $ $ 1,400,000 90,000 55,000 (1,458,000) 500,000 500,000 7,782,349 750,000 9,619,349 2,649,600 192,000 5,071,450 654,500 11,000 1,000 8,500 2,500 9,000 164,100 3,450 6,000 28,300 817,949 9,619,349 Amount Increase/ (Decrease) $ $ $ $ (20,000) 8,000 249,000 300,000 (7,782,349) (650,000) (7,895,349) (290,906) (21,080) (508,260) (396,000) (11,000) 6,000 (3,500) (2,500) 6,000 (158,600) (1,150) 14,700 (3,780) (103,592) (1,473,668) * City of Chandler funding for Arizona Avenue HCT analysis is to be funded from existing cash reserve. * City of Peoria funding for Transit Oriented Development is to be funded from existing cash reserve. * City of Phoenix funding provides local match for South Central Corridor study, and includes reimbursement from PTF for Phoenix West Alternative Analysis. Note: Future Project Development includes expenditures funded by the Public Transportation Fund for the development of capital projects as listed in the Regional Transportation Plan. These expenditures include environmental and alternatives analysis studies necessary to qualify the capital projects for federal funding. Adopted FY 2011-2012 Operating and Capital Budget METRO 13 May 2011 FY 2011-12 Adopted Agency Operating Budget 2011/2012 Adopted Budget Sources of Funds Chandler Glendale Mesa Peoria Phoenix Tempe $ $ Expenditures Salaries and Fringe Benefits RPTA Overhead Consultants - Other Conferences Business Travel Advertising Printing Public meetings & information Other direct expenditures LRT audit and accounting costs Agency Overhead Allocation $ $ Adopted FY 2011-2012 Operating and Capital Budget METRO 14 2010/11 Amended Budget 32,512 32,512 86,698 32,512 541,860 357,628 1,083,720 $ 402,898 104,195 219,000 10,500 38,500 500 3,750 38,000 92,850 50,000 123,527 1,083,720 $ $ $ Amount Increase/ (Decrease) 30,355 30,355 80,946 30,355 505,915 333,904 1,011,829 $ 423,433 30,683 234,000 16,670 11,950 250 2,000 33,000 85,600 33,500 140,743 1,011,829 $ $ $ 2,157 2,157 5,751 2,157 35,946 23,724 71,891 (20,535) 73,512 (15,000) (6,170) 26,550 250 1,750 5,000 7,250 16,500 (17,216) 71,891 May 2011 FY 2011-12 Adopted Agency Overhead Allocation 2011/2012 Adopted Budget Allocation of Costs Agency Overhead Allocation: Revenue Operations CP/EV Central Mesa Tempe South Agency Operating Future Projects NPR Utilities ARRA FUNDING RPTA Bus Capital FUNDING $ $ Expenditures Salaries & Fringes RPTA Overhead Agency Overhead Building Rent Building Rent Sublease Parking IT Services and Consultants Equipment Leases Equipment Maintenance Office Supplies Telecommunication Services Employee Development Vehilce Related Other Office Expense LRT project capital outlay $ $ Adopted FY 2011-2012 Operating and Capital Budget METRO 15 2010/11 Amended Budget 284,994 265,203 125,764 123,527 714,357 13,992 1,527,838 $ 69,000 5,000 1,368,000 (552,593) 193,000 60,000 30,000 30,000 40,000 82,250 9,000 1,000 193,181 1,527,838 $ $ $ Amount Increase/ (Decrease) 358,074 80,311 324,805 140,743 762,185 7,258 68,915 1,742,291 $ 38,113 2,762 1,281,237 (269,558) 21,564 366,402 45,874 5,779 58,050 37,140 6,000 148,928 1,742,291 $ $ $ (73,080) (80,311) (59,602) 125,764 (17,216) (47,828) 6,734 (68,915) (214,453) 30,887 2,238 86,763 (283,035) (21,564) (173,401) 14,126 24,221 (28,050) 2,860 76,250 9,000 1,000 44,253 (214,453) May 2011 FY 2011-12 Adopted 20-Mile METRO Initial Segment Budget 2011/2012 Adopted Budget Sources of Funds FTA - Section 5309 FTA - CMAQ Local Match - Mesa Local Match - Phoenix Local Match - Tempe PTF Revenue - Sales Tax $ $ Expenditures Salaries and Fringe Benefits RPTA Overhead Consultants - General/Prelim Engineering Consultants - Construction Admin. Consultants - Art Design Consultants - Planning/Environmental Consultants - Other Facilities construction Light rail vehicles Systems Real estate acquisition Printing LRT legal services Travel expenses Interest expense LRT project capital outlay Agency Overhead Allocation $ $ 2010/11 Amended Budget Amount Increase/ (Decrease) $ (232,911) 1,614,330 (1,335,069) 5,255,000 5,301,350 $ 61,249,903 $ (3,784,200) (47,711,075) (27,251,325) 37,000,000 19,503,303 $ (61,249,903) 3,551,289 49,325,405 25,916,256 (31,745,000) (14,201,953) - $ 275,000 4,809,350 17,000 200,000 5,301,350 $ 282,225 $ 16,797 101,566 191,393 134,769 94,623 92,658 10,090,109 656,669 858,007 3,770,239 50,000 240 3,016,597 67,100 80,311 19,503,303 $ (282,225) (16,797) (101,566) (191,393) (134,769) 180,377 (92,658) (10,090,109) (656,669) (858,007) 1,039,111 17,000 150,000 (240) (3,016,597) (67,100) (80,311) (14,201,953) Note: Negative Sources of Funds reflect reimbursements to Member Cities for the CPEV 20 Mile Initial Segment Capital Project. Source of funding is PTF revenue to fund Regional Assets. Adopted FY 2011-2012 Operating and Capital Budget METRO 16 May 2011 FY 2011-12 Adopted Northwest Extension Phase I Budget 2011/2012 Adopted Budget Sources of Funds PTF Revenue Bonds Phoenix - T2000 $ $ 11,428,000 (2,854,721) 8,573,279 $ 25,000 8,548,279 8,573,279 Expenditures Consulting COP Liaison City management & administration Consultants - General/Prelim Engineering Consultants - Other Real estate acquisition Adopted FY 2011-2012 Operating and Capital Budget METRO 17 2010/11 Amended Budget $ $ 5,798,286 5,798,286 $ 79,560 510,416 25,711 182,599 5,000,000 5,798,286 Amount Increase/ (Decrease) $ $ 11,428,000 (8,653,007) 2,774,993 $ (54,560) (510,416) (25,711) (182,599) 3,548,279 2,774,993 May 2011 FY 2011-12 Adopted Central Mesa HCT Capital Project 2011/2012 Adopted Budget Sources of Funds PTF Revenue Bonds FTA Section 5309 CMAQ $ $ Expenditures Salaries and Fringe Benefits RPTA Overhead City management & administration Consultants - General/Final Engineering Consultants - Construction Admin. Consultants - Planning/Environmental/PE Consultants - Art Design Consultants - Other (7200) Pothole Program NPR Utility Relocations Facilities construction Real estate acquisition Training & seminars Advertising Printing Postage Public meetings & information Other direct expenditures LRT project office expense Local meetings & mileage Business Travel Vehicle Related Expense LRT project capital outlay Agency Overhead Allocation $ $ Adopted FY 2011-2012 Operating and Capital Budget METRO 18 2010/11 Amended Budget 2,225,384 3,300,000 11,000,000 16,525,384 $ 944,719 68,458 400,000 7,485,000 465,000 250,000 464,750 250,000 5,700,000 6,000 17,500 5,500 7,500 17,500 139,100 1,000 13,000 25,155 265,203 16,525,384 $ $ $ Amount Increase/ (Decrease) 2,055,444 8,221,776 10,277,220 $ 594,959 31,623 200,000 6,701,333 125,000 65,000 200,000 600,000 250,000 250,000 670,000 3,000 10,000 10,000 1,500 6,000 12,000 100,000 2,000 5,000 15,000 100,000 324,805 10,277,220 $ $ $ 169,940 3,300,000 2,778,224 6,248,164 349,760 36,835 200,000 783,667 465,000 (125,000) 185,000 264,750 (350,000) (250,000) (250,000) 5,030,000 (3,000) (4,000) 7,500 4,000 1,500 5,500 39,100 (1,000) 8,000 (15,000) (74,845) (59,602) 6,248,164 May 2011 FY 2011-12 Adopted South Tempe HCT Capital Project 2011/2012 Adopted Budget 2010/11 Amended Budget Amount Increase/ (Decrease) Sources of Funds PTF Revenue Bonds CMAQ $ $ Expenditures Salaries and Fringe Benefits RPTA Overhead Consultants - General/Prelim Engineering Consultants - Art Design Consultants - Other (7200) Pothole Program LRT project capital outlay Business Travel Other direct expenditures Allocated OH $ $ Adopted FY 2011-2012 Operating and Capital Budget METRO 19 852,457 3,409,828 4,262,284 $ 462,277 33,498 2,600,250 150,000 336,195 400,000 130,000 7,800 16,500 125,764 4,262,284 $ - $ $ - $ - $ - $ $ 852,457 3,409,828 4,262,284 462,277 33,498 2,600,250 150,000 336,195 400,000 130,000 7,800 16,500 125,764 4,262,284 May 2011 FY 2011-12 Adopted Non-Prior Rights Utilities Relocation Budget 2011/2012 Adopted Budget Sources of Funds PTF Revenue Sales Tax Expenditures Salaries and Fringe Benefits RPTA Overhead CP/EV NPR Utilities Northwest Extension NPR Utilities Mesa Extension NPR Utilities Agency Overhead Allocation 2010/11 Amended Budget Amount Increase/ (Decrease) $ $ 2,637,937 2,637,937 $ $ 246,030 246,030 $ $ 2,391,907 2,391,907 $ 45,638 3,307 575,000 2,000,000 13,992 2,637,937 $ 15,663 906 (377,797) 600,000 7,258 246,030 $ 29,975 2,401 377,797 (25,000) 2,000,000 6,734 2,391,907 $ $ $ FY 2011-12 Adopted Systemwide Improvements 2011/2012 Adopted Budget Sources of Funds City of Phoenix T 2000 PTF Revenue Bonds PTF Revenue Sales Tax CMAQ $ Expenditures 14 Light Rail Vehicles - Phoenix Systemwide Capital - CIF less LRV Doors (10,000,000) 10,675,296 2010/11 Amended Budget $ $ 675,296 $ $ 675,296 675,296 $ $ $ Amount Increase/ (Decrease) (9,554,485) 10,125,000 600,000 1,170,515 445,515 725,000 1,170,515 $ $ $ $ (445,515) (10,125,000) 10,675,296 (600,000) (495,219) (445,515) (49,704) (495,219) FY 2011-12 Scheduled Capital Debt Service 2011/2012 Adopted Budget Sources of Funds PTF Revenue Sales Tax Expenditures Debt Service - Interest Debt Service -Principal $ 5,413,585 $ 5,413,585 $ $ 2,750,000 2,663,585 5,413,585 $ $ Adopted FY 2011-2012 Operating and Capital Budget METRO 20 2010/11 Amended Budget $ Amount Increase/ (Decrease) $ 5,413,585 - $ 5,413,585 2,750,000 2,750,000 $ 2,663,585 2,663,585 $ May 2011 CPEV LRT Project Project Budget Overview FY 2012 and Total Project Adjusted March 2011 Cash Flow Forecast FFGA Original March 2011 Projected Remaining March 11 PBS Expenditures Forecasted Report Description Project Budget Project Budget Through FY 11 Management/Administration Real Estate/Right of Way Engineering Owner Furnished Materials Light Rail Vehicles Facilities Systems Construction Administration Archeology / HAZMAT removal Testing & Startup Arts Program Contingency Unallocated Project Reserve $ 133,745,867 $ 136,295,150 122,445,027 29,671,419 121,276,824 422,341,688 119,790,902 53,003,749 $ Subtotal Finance Costs Total CP/EV LRT Project 31,000,000 6,283,133 7,575,241 69,829,000 138,679,721 141,893,055 133,666,940 33,195,541 116,941,301 546,774,942 112,830,373 57,316,747 7,372,689 21,729,200 6,283,133 3,596,502 1,253,258,000 1,320,280,144 158,867,346 91,845,202 $ 1,412,125,346 $ 1,412,125,346 - Adopted FY 2011-2012 Operating and Capital Budget METRO FY 12 Budget Expenditures 138,140,972 $ 137,083,705 132,366,940 33,195,541 116,941,301 548,047,604 112,776,141 57,311,079 7,322,689 21,729,200 6,283,133 5,863,039 1,317,061,344 90,016,604 $ 1,407,077,948 $ 21 442,000 $ 4,809,350 50,000 - - 5,301,350 - 5,301,350 5,301,350 $ - Total Forecast $ $ 138,582,972 $ 141,893,055 132,366,940 33,195,541 116,941,301 548,047,604 112,776,141 57,311,079 7,372,689 21,609,890 6,076,287 5,935,243 Forecast 138,582,972 141,893,055 132,366,940 33,195,541 116,941,301 548,047,604 112,776,141 57,311,079 7,372,689 21,609,890 6,076,287 5,935,243 1,322,108,742 1,322,108,742 90,016,604 1,412,125,346 90,016,604 1,412,125,346 May 2011 Funds Flow Fiscal Year 2012 $ Thousands Central Phoenix/East Valley LRT Project Funding Sources Fare Revenue: Phoenix Tempe Mesa Advertising Revenue: Phoenix Tempe Mesa Phoenix Tempe Mesa Glendale Chandler Peoria Costs Funded Currently Federal/Regional Reimbursements $ $ - 5,139 138 24 Federal 5309 Federal 5339 Federal CMAQ Federal 5307 PM Federal FG PM Regional PTF Sales Tax Regional PTF Revenue Bonds RPTA MAG Arranged Funding Other Funding TOTAL FUNDING Adopted FY 2011-2012 Operating and Capital Budget METRO - Other Costs Funded in Current FY Net CPEV Sources $ - (3,525) (1,473) (257) 1,614 (1,335) (233) - - - - 5,255 5,255 Central Mesa $ - Other Capital $ - Operations Total Funding $ $ (12,855) - 2,859 934 6,241 201 84 15 14,993 7,177 1,338 33 131 88 201 84 15 3,752 5,842 1,105 33 131 88 1,380 100 324 996 6,422 500 500 3,300 1,380 14,510 324 996 30,404 14,505 500 500 - 3,300 11,000 3,410 2,225 18,727 12,280 $ 5,301 $ - $ 5,301 22 $ 16,525 $ 21,562 $ 2,859 934 6,241 44,315 $ 87,704 May 2011 FY 2012 Pay Grades and Ranges Grade Pay Range RPTA Position Titles III Administrative Support Assistant $27,626 - $41,439 IV Accounting Technician Administrative Assistant Lead Document Control Clerk Materials Handler $30,696 $30,696 $30,696 $30,696 - $46,043 $46,043 $46,043 $46,043 VI Paralegal Track Maintainer $37,142 $37,142 - $55,712 $55,712 VII Accountant I Executive Assistant Help Desk Support Specialist Signal/Comm Maintainer Utility Relocation Specialist $40,856 $40,856 $40,856 $40,856 $40,856 - $61,284 $61,284 $61,284 $61,284 $61,284 VIII Engineering Technician Executive Administrative Coordinator Information Technology Systems Specialist Materials/Warranty Coordinator Signal/Comm Systems Technician Traction Power Systems Technician $44,942 $44,942 $44,942 $44,942 $44,942 $44,942 - $67,413 $67,413 $67,413 $67,413 $67,413 $67,413 IX Area Coordinator Budget Analyst Contract Administrator Facilities Maintenance Supervisor Public Information Specialist Track Maintenance Supervisor $49,435 $49,435 $49,435 $49,435 $49,435 $49,435 - $74,154 $74,154 $74,154 $74,154 $74,154 $74,154 X Network Systems Engineer Program Control Specialist Senior Contracts Administrator Signal & Comm Systems Supervisor Traction & Electrification Supervisor $54,380 $54,380 $54,380 $54,380 $54,380 - $81,569 $81,569 $81,569 $81,569 $81,569 Adopted FY 2011-2012 Operating and Capital Budget METRO 23 May 2011 FY 2012 Pay Grades and Ranges Grade Pay Range RPTA Position Titles XI Accountant III Planner III Public Arts Administrator Public Information Officer Senior Construction Project Coordinator $59,818 $59,818 $59,818 $59,818 $59,818 - $89,726 $89,726 $89,726 $89,726 $89,726 XII Public Involvement Manager Rail Utility Manager Senior Transportation Engineer $65,799 $65,799 $65,799 - $98,698 $98,698 $98,698 XIII Manager, Procurement & Risk Schedule & Capital Projects Manager Transit Planning Manager $72,379 $72,379 $72,379 - $108,568 $108,568 $108,568 XIV Chief Maintenance Engineer Chief, Rail Safety & Security Manager, Construction and Utilities Manager, Design Systems Engineering Manager $81,992 $81,992 $81,992 $81,992 $81,992 - $122,987 $122,987 $122,987 $122,987 $122,987 XV Chief Operations Officer Community Relations Director Finance & Administration Director $100,202 $100,202 $100,202 - $150,304 $150,304 $150,304 XVI Director, Planning and Development $112,627 - $168,941 GC General Counsel $117,246 - $175,870 ED Chief Executive Officer Adopted FY 2011-2012 Operating and Capital Budget METRO Salary Negotiated 24 May 2011 Adopted FY 2011-2012 Operating and Capital Budget METRO 25 May 2011 Five – Year Operating Forecast and Capital Program FY 2012 – FY 2016 METRO SERVICES METRO was formed to plan, design, construct, and operate the METRO Light Rail Transit System. The Approved Light Rail Alignment (the initial 20-mile segment) was completed on time and commenced serving passengers in Phoenix, Tempe, and Mesa in December 2008. An additional 37 miles of High Capacity Transit, to be funded by local taxes, Proposition 400 revenues, and Federal Funds, is planned for future years. See “Future Projects” for further information. FY 2012-2016 26 Five – Year Operating Forecast and Capital Program METRO May 2011 METRO SERVICES (continued) Operations & Maintenance: METRO is responsible for overseeing the day-to-day operations of the METRO system with the ultimate goal of providing a safe, reliable and customer focused transit system. In December of 2008, revenue operations began and METRO commenced comprehensive management of rail passenger services including safety, security, public information and marketing, risk management, fare collection, finance, transportation service delivery and LRT systems maintenance. METRO is self-performing core systems maintenance including track, power, signals and communication systems. During FY 2011, METRO staff analyzed the delivery of maintenance and transportation services to ensure they are being delivered in a way that focuses on the customer and is efficient from a cost perspective. As a result of that analysis, METRO will transition performance of vehicle maintenance from contracted to in-house staff. METRO will continue to manage contracted services for transportation operations and facilities maintenance, while maintaining system maintenance in-house. The transition of vehicle maintenance to in-house staff will begin in the first half of FY 2012 and will be reflected as part of the FY 2012 mid-year budget adjustment. Planning and Development: The proposed light rail/ high capacity transit system will include over 57 miles of high capacity transit service in four cities within the next 20 years. Before any specific transit corridor is initiated, METRO will study and configure the system to better understand how corridors connect, determine facility requirements, and define operating parameters. System planning is the first step in developing the high capacity transit. It is followed by the corridor planning for individual corridors. Once technologies and alignments are determined in each corridor, preliminary engineering is engaged. A key objective during project development is to define all aspects of each high capacity transit corridor project, identify the appropriate transit technology, the alignment, stations, park-and-rides, maintenance facilities, traction power substations, and bus interface. METRO staff is committed to working closely with policy makers, public agencies, businesses, community stakeholders, utility companies to assure an early and complete understanding of their needs and issues, before design begins. METRO is responsible to assure that adequate funding is in place to implement, maintain and operate the light rail program. METRO staff works closely with federal, state, regional and local agencies that provide present and future funding for the light rail system. METRO, in coordination with all affected agencies, annually updates the HCT element of the Transit Life Cycle Program, which defines light rail projects, funding, and schedule. FY 2012-2016 27 Five – Year Operating Forecast and Capital Program METRO May 2011 Finally, METRO assists with light rail station area planning by actively engaging to support member cities’ efforts to facilitate Transit Oriented Development (TOD). METRO is responsible for the design and construction of regional rail transit system. Efforts include design for guideway, passenger stations, LRV traction power, signals and communications systems and maintenance facilities. METRO coordinates right-ofway acquisitions and public and private utility relocations to make way for construction. Construction contract specifications are developed and competitive procurements executed. Construction is managed to meet planned budget and schedule requirements. Emphasis is placed on delivering a high quality product focused on meeting the long-term needs to operate and maintain systems for rail passenger services. Goals (FY 2012 through FY 2016) Planning & Development Division Goals:  Complete close-out for the initial 20-mile LRT project and provide capital support to system operations.  Advance HCT/LRT corridor projects per the schedules and budgets identified in the Transit Life Cycle Program (TLCP).  Emphasize quality and safety during design and construction of all capital projects.  Actively seek ways to accelerate projects in the TLCP.  Conduct planning studies for member agencies that support future expansion of the HCT/LRT system in coordination with MAG.  Support city efforts to encourage transit oriented development.  Regularly analyze LRT rider characteristics to identify opportunities to improve operations and to support future planning efforts.  Develop and implement an agency sustainability program.  Continue the implementation, administration and utilization of an effective agency-wide Geographic Information System FY 2012-2016 28 Five – Year Operating Forecast and Capital Program METRO May 2011 Operations & Maintenance Division Goals:  Deliver rail operational service within budget.  Achieve or exceed LRV mean-distance-between-failures’ objective.  Maintain on-time performance at 93% or above.  Preventative maintenance inspections and tasks will be performed on-time. (includes systems and vehicle)  Perform all corrective maintenance tasks and implement capital improvement program to ensure system remains in state of good repair.  Continue to search for creative operating practices that improve the customer’s experience. Safety & Security Division Goals:  Create opportunities for the METRO system to expand and enhance safety for METRO passengers, employees, autos and bicyclists.  FTA compliant Drug & Alcohol Testing Program for all Operations and Maintenance Employees.  Continually strive to exceed the federal, state, internal and external audit provisions and accepted industry standards for safety and security.  Develop strategies to manage risks by performing analysis and initiating improvements to enhance safety and security throughout METRO.  Continue to explore new methods of enhancing safe interaction with the driving public and pedestrians. Community and Government Relations Division Goals:  Ensure that customer service is paramount in METRO activities.  Implement marketing strategies, safety campaigns, customer education for future light rail projects and revenue operations. FY 2012-2016 29 Five – Year Operating Forecast and Capital Program METRO May 2011  Continue to foster relationships with the business and residential communities related to future projects and revenue operations.  Ensure cooperative relationships are maintained with METRO member cities and regional stakeholders.  Work effectively with the FTA and Congress to maximize federal funding for rail extensions.  Maintain positive relationships with the media resulting in objective news coverage. Legal Services Division Goals:  Maintain lawful, fair and cost-efficient procurement practices to support METRO’s passenger operations, future planning, business and construction needs.  Provide on-going legal advice to senior METRO management in the areas of risk management, litigation avoidance, statutory compliance and corporate governance.  Manage and fine-tune the Owner Controlled Insurance Program as METRO’s operational experience develops.  Streamline the delivery of in-house legal services so as to reduce the overall cost to METRO.  Strengthen internal controls; respond promptly to audit oversight findings.  Maintain compliance with FTA requirements and best practices in order to better position METRO for future funding opportunities. Finance and Administration Division Goals:  Manage fare revenue and ridership accounting controls.  Manage financial aspects of rail operations costs.  Develop annual budget and five-year capital and operating forecasts integrated with Member City objectives and funding, Transit Life Cycle Plan and Regional Transportation Plan. FY 2012-2016 30 Five – Year Operating Forecast and Capital Program METRO May 2011  Manage financial reporting and project controls systems to deliver the Central Mesa, Tempe Streetcar and Phoenix West projects on-time and within budget.  Manage IT systems to maximize user computer capabilities.  Work with regional transit partner’s staff to facilitate administrative efficiencies and reduce costs. Five-Year Plan Summary Uses of Funds: The cumulative uses of funds, FY 2012 through FY 2016, may be summarized as follows: Uses of Funds Five Year Total LRT Operations & Maintenance Project Development Planning Agency Operating Budget YOE ($,000) $ Subtotal - Operations and Project Development CP/EV LRT Project Northwest Extension Phase 1 Central Mesa Tempe South Phx West 14 LRV's Non-Prior Rights Utilities Systemwide Improvements PTF Debt Service 223,731 5,301 8,573 221,967 129,625 136,389 15,897 47,803 22,424 49,174 Subtotal - Capital Total Uses FY 2012-2016 31 Five – Year Operating Forecast and Capital Program METRO 188,363 29,615 5,753 637,154 $ 860,884 May 2011 Sources of Funds: The cumulative sources of funds, FY 2012 through FY 2016, may be summarized as follows: Sources of Funds Five Year Total LRT Fares ($,000) $ Member City Contributions: Phoenix Tempe Mesa Glendale Chandler Peoria 54,697 38,182 5,838 173 271 228 MAG / RPTA PTF Sales Tax Revenue PTF (Reserve) / Borrowing Federal Funding: FTA Section 5309 FTA Section 5339 CMAQ / STP Federal 5307 PM Federal FGPM Total Sources FY 2012-2016 32 Five – Year Operating Forecast and Capital Program METRO 53,276 5,000 233,047 126,137 $ 231,088 7,440 99,806 4,706 996 860,884 May 2011 Table 1 – Five-Year Capital Program and Operating Forecast Summary ($000) 2012 2013 2014 2015 2016 Cumulative 2012 - 2016 USES OF FUNDS LRT Operations & Maintenance Project Development Planning Agency Operating Budget Subtotal - Operations and Proj Dev CP/EV LRT Project Northwest Extension Phase 1 Central Mesa Tempe South Phx West 14 LRV's Non-Prior Rights Utilities Systemwide Improvements PTF Debt Service 35,086 8,146 1,084 $ Subtotal - Capital 44,315 5,301 8,573 16,525 4,262 2,638 675 5,414 36,515 5,815 1,117 $ 43,447 53,206 17,097 15,785 10,855 737 5,821 37,361 4,723 1,150 $ 43,234 66,432 42,558 35,543 15,897 7,161 2,502 12,078 37,776 5,432 1,184 $ 44,392 47,695 43,041 45,978 8,756 6,452 12,218 41,626 5,499 1,218 $ 48,343 38,108 22,667 39,083 18,392 12,058 13,643 188,363 29,615 5,753 $ 223,731 5,301 8,573 221,967 129,625 136,389 15,897 47,803 22,424 49,174 43,389 103,501 182,172 164,140 143,951 637,154 87,704 146,948 225,405 208,532 192,294 860,884 3,954 5,926 1,120 33 131 88 1,000 - 7,530 7,749 1,134 34 34 34 1,000 - 5,580 7,857 1,145 35 35 35 1,000 - 17,740 7,849 1,132 36 36 36 1,000 - 19,894 8,802 1,307 37 37 37 1,000 - $ 54,697 38,182 5,838 173 271 228 5,000 - 30,403 14,506 47,132 16,911 50,288 62,245 53,877 16,961 57,769 9,092 $ LRT Fares 10,035 10,336 10,646 10,965 11,294 FTA Section 5309 FTA Section 5339 CMAQ / STP Federal 5307 PM Federal FGPM 3,300 1,380 14,510 324 996 20,510 87,704 29,138 1,217 23,919 783 55,057 $ 146,948 66,051 1,218 18,278 995 86,542 $ 225,405 73,049 1,786 22,900 1,167 98,902 $ 208,532 59,549 1,839 20,200 1,437 83,025 192,294 239,469 119,715 53,276 231,088 7,440 99,806 4,706 996 344,036 860,884 Total Uses SOURCES OF FUNDS Phoenix Tempe Mesa Glendale Chandler Peoria MAG / RPTA All Others PTF Sales Tax Revenue PTF (Reserve) / Borrowing Subtotal Total Sources $ $ $ Note: Cost and revenues reported on accrual basis. PTF Sales Tax Revenues are forecasted in accordance with ADOT projections published in October 2010. The Rail PTF (Reserve) / Borrowing represents forecasted expenditures from bond proceeds. FY 2012-2016 33 Five – Year Operating Forecast and Capital Program METRO May 2011 Five-Year Operating Forecast The Operations & Maintenance (O&M) costs are projected based on current cost history with a general inflation escalation factor of 3.0%. Anticipated structural changes to staffing, contract and materials expenses are forecasted to meet customer demand and maintain the system in a state of good repair. System-wide and specific corridor LRT Project Development Planning activities are included in the operating budget. Once a project has been approved for preliminary engineering, the costs are thereafter capital in nature. Agency Operating costs include those costs not directly allocable to capital projects or to passenger operations. Included are costs of annual audit, federal and state legislative representation, memberships to transportation related organizations. Five-Year Operating Uses and Sources of Funds: Operating costs and funding planned for the FY 2012 through FY 2016 planning horizon may be summarized as follows (See Table 2, Five-Year Operating Forecast): Uses of Funds - Operating Budget Operations & Maintenance Project Development Planning Support Agency Operating Budget Total Uses Sources of Funds - Operating Budget Fare Revenues Member Support Phoenix Tempe Mesa Glendale Chandler Peoria Subtotal Capital Planning Funds - PTF Federal 5307 PM Federal FGPM FTA 5339 RPTA/MAG/ CMAQ / STP Total Sources FY 2012-2016 34 Five – Year Operating Forecast and Capital Program METRO $ ($,000) 188,363 29,615 5,753 223,731 $ ($,000) 53,276 $ 88,123 39,518 6,071 173 271 228 134,383 $ 17,831 4,706 996 7,440 5,100 223,731 May 2011 Table 2 – Five-Year Operating Forecast - - - - - - - - - - - - - - - - - - - -Year of Expenditure ($,000) - - - - - - - - - - 2012 USES OF FUNDS Operations and Maintenance Project Development Planning Support Agency Operating Budget Total Uses 2013 2014 2015 2016 TOTAL 35,086 8,146 1,084 44,315 36,515 5,815 1,117 43,447 37,361 4,723 1,150 43,234 37,776 5,432 1,184 44,392 41,626 5,499 1,218 48,343 188,363 29,615 5,753 223,731 6,241 2,859 934 10,035 6,429 2,945 962 10,336 6,621 3,033 991 10,646 6,820 3,124 1,021 10,965 7,025 3,218 1,051 11,294 33,136 15,179 4,960 53,276 15,194 7,261 1,353 33 131 88 17,530 7,750 1,134 34 34 34 17,765 7,857 1,145 35 35 35 17,740 7,849 1,132 36 36 36 19,894 8,802 1,307 37 37 37 88,123 39,518 6,071 173 271 228 Subtotal Local Revenues 24,058 26,514 26,870 26,827 30,113 134,383 Capital Planning Funds - PTF 6,422 3,598 2,505 2,646 2,660 17,831 500 500 324 996 1,380 100 44,315 500 500 783 500 500 995 500 500 1,167 500 500 1,437 1,217 43,447 1,218 43,234 1,786 44,392 1,839 48,343 2,500 2,500 4,706 996 7,440 100 223,731 SOURCES OF FUNDS LRT Fares: Phoenix Tempe Mesa Subtotal Fares Other Revenues Phoenix Tempe Mesa Glendale Chandler Peoria MAG RPTA Federal 5307 PM Federal FGPM FTA 5339 CMAQ Total Sources FY 2012-2016 35 Five – Year Operating Forecast and Capital Program METRO May 2011 Passenger Operations & Maintenance Rail Transportation Service Delivery: Rail Transportation is responsible for ensuring the overall safety and reliability of the METRO system. This includes the Rail Control Center, Field Supervision and Train Operators. Rail Transportation will be responsible for monitoring the METRO system on a 24/7 basis. LRV Maintenance: LRV Maintenance will be responsible for the preventive and corrective maintenance required to ensure a high level of LRV availability and reliability. In addition, each LRV will be cleaned on a daily basis. As a cost containment measure, In January 2012, maintenance will be performed by in-house METRO staff in lieu of contracted services. System Maintenance: Systems Maintenance is responsible for maintaining all METRO systems and facilities, including: track, communications, signals, stations, traction power distribution and overhead centenary systems. Administration: Rail transportation and maintenance operations will be supported by administrative activities including public safety and security, marketing and customer service, legal and procurement, finance and accounting, risk management, and information systems. Fares: Effective July 2009, the current Regional Fare Policy is as follows: Reduced - ADA Certified, Youth (6-18) and Seniors (age 65 and over) FY 2012-2016 36 Five – Year Operating Forecast and Capital Program METRO May 2011 Table 3 – Rail Operations and Maintenance Cost Forecast FY 2012 through 2016 - - - - - - - - - - - - -Year of Expenditure Dollars - - - - - - - - - Annual Cost Projection Extended Cost Transportation Labor and Materials $ 9,849,722 Labor - Fare Inspection & Security 3,567,841 Propulsion Power 2,594,381 Emergency Contingency (Bus Bridges, etc.) 196,000 Transportation Total Vehicle Maintenance Labor and Materials $ 5,850,921 Preventative Maintenance Overhauls 170,427 Maintenance Other (270,749) Vehicle Maintenance Total Systems and Facilities Maintenance Track/Station/Facility Maintenance $ 2,256,317 Traction Power System Maintenance 977,046 Signals/Communications/TVMs 1,275,740 Material/Supplies/Other Direct Costs 1,954,485 Utilities 1,295,397 Fare Collection Material & Security 276,000 Systems and Facilities Maintenance Total Administration Property and General Liability Insurance $ 1,351,378 VMR Management 1,589,288 General & Administrative Costs 1,633,983 Contingency Reserve 517,413 Administration Total FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 $ 16,207,944 $ 16,694,182 $ 17,195,008 $ 17,710,858 $ 18,242,184 4,872,326 5,167,659 1,114,794 748,869 (278,871) (287,237) $ 5,750,600 $ 5,708,250 $ 5,629,291 $ 5,322,689 65,405 (295,854) 5,092,240 $ 5,482,369 2,784,588 (304,730) 7,962,227 $ 8,034,986 $ 8,634,499 $ 8,893,534 $ 9,160,340 $ 9,435,151 $ 5,092,062 $ 5,478,494 $ 5,642,849 $ 5,812,135 $ 5,986,499 $ 35,085,591 $ 36,515,426 $ 37,360,682 $ 37,775,573 $ 41,626,060 In the five year plan, the FY12 deferred maintenance staff positions are forecasted to be restored in FY13. In addition, commencing in FY13 and continuing in FY14, significant cost increases to perform preventative maintenance are scheduled. For vehicle maintenance, commencing in January 2012, in-house staff will replace contractor staff as a cost containment measure. FY 2012-2016 37 Five – Year Operating Forecast and Capital Program METRO May 2011 Table 4 – Rail Operations Fares and Member City Funding FY 2012 to FY 2016 Fiscal Year FY 2012 Annual Ridership / Fares Baseline Rides Weekday Saturday Sunday Total Baseline Rides TOTALS 9,835,506 1,457,888 1,249,982 12,543,376 $ $ $ 12,543,376 $ OPERATING REVENUES Fare Revenues Phoenix Tempe Mesa Total Fare Revenues FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Fare Assumption $ $ $ $ 7,868,405 1,166,310 999,986 6,647,680 $ $ $ 7,868,405 $ 1,166,310 $ 999,986 $ 10,034,701 8,104,457 $ 1,201,300 $ 1,029,985 $ 10,335,742 8,347,591 $ 1,237,339 $ 1,060,885 $ 10,645,814 8,598,018 $ 1,274,459 $ 1,092,711 $ 10,965,189 8,855,959 1,312,693 1,125,493 11,294,144 0.80 $ 6,647,680 $ 10,034,701 $ 10,335,742 $ 103.0% 10,645,814 $ 103.0% 10,965,189 $ 103.0% 11,294,144 103.0% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 $6,241,382 $2,859,098 $934,221 $10,034,701 $6,428,623 $2,944,871 $962,247 $10,335,742 $6,621,482 $3,033,217 $991,115 $10,645,814 $6,820,126 $3,124,214 $1,020,848 $10,965,189 $7,024,730 $3,217,940 $1,051,474 $11,294,144 29% 28% 28% 29% 27% $300,000 $201,240 $84,090 $14,670 $309,000 $207,277 $86,613 $15,110 $318,270 $213,496 $89,211 $15,563 $327,818 $219,900 $91,887 $16,030 $337,653 $226,497 $94,644 $16,511 $324,298 $217,539 $90,901 $15,858 $782,892 $525,164 $219,445 $38,283 $994,738 $667,270 $278,825 $48,643 $1,167,047 $782,855 $327,123 $57,069 $1,436,896 $963,870 $402,762 $70,264 $23,925,170 $10,545,226 $2,045,029 $36,515,426 $24,478,988 $10,789,326 $2,092,367 $37,360,682 $24,750,828 $10,909,142 $2,115,603 $37,775,573 $27,273,695 $12,021,118 $2,331,248 $41,626,060 0.80 0.80 0.80 62.1980% 28.4921% 9.3099% Fare Recovery Ratio Advertising Revenue Phoenix Tempe Mesa Federal 5307 PM Phoenix Tempe Mesa Federal Fixed Guideway Preventative Maintenance Phoenix Tempe Mesa Gross Operating Costs Phoenix Tempe Mesa Total Operating Costs Member City Funding Phoenix Tempe Mesa Total Member City Funding 67.0800% 28.0300% 4.8900% 67.0800% 28.0300% 4.8900% $996,108 $668,189 $279,209 $48,710 67.0800% 28.0300% 4.8900% $22,988,332 $10,132,307 $1,964,952 $35,085,591 65.5207% 28.8788% 5.6005% TOTAL OPERATING REVENUE $ $ $ 15,659,982 $ 16,764,106 $ 16,976,741 $ 16,927,946 $ 19,058,597 6,819,009 $ 7,294,298 $ 7,388,073 $ 7,365,917 $ 8,305,771 951,493 $ 1,029,388 $ 1,037,047 $ 1,021,656 $ 1,192,999 $23,430,484 $25,087,792 $25,401,860 $25,315,519 $28,557,368 $35,085,591 $36,515,426 $37,360,682 $37,775,573 $41,626,060 Fare revenue is forecasted to grow from FY12 through FY16 at an average rate of 3% per year. It is anticipated that in July 2012 a regional fare increase will be implemented which is estimated to increase average fare per ride to $1.01. Project Development Planning Project development planning consists of the following subcategories of System Planning and Corridor Planning activities:  Light rail/high capacity transit system planning.  Alternatives analysis, environmental analysis, and conceptual engineering for future light rail/high capacity transit corridors.  Developing and updating LRT design criteria, standards and specifications. FY 2012-2016 38 Five – Year Operating Forecast and Capital Program METRO May 2011  Working with the Maricopa Association of Governments and the Regional Public Transportation Authority to participate in their regional transit planning studies and to update regional project programming documents.  Support of Transit Oriented Development initiatives by Member Cities.  Development of a comprehensive Geographic Information System (GIS) for the agency. The projected uses and sources of funds in connection with Capital Project Development over the next five years are summarized as follows: Table 5 – Capital Project Development FY 2012 to FY 2016 - - - - - - - - - - - - - - - - - - - - - (YOE $,000) - - - - - - - - - - - - - - - - - - - - - 2012 2013 2014 2015 2016 Total USES OF FUNDS CPDA Tempe South AA / DEA / CE / PD (Pre-NEPA) Phoenix West AA / DEIS / CE / Early Action Glendale AA Northeast Phoenix AA / DEIS / CE South Central Central Mesa Phase II (Gilbert Road) System Studies Design Criteria Project Development Total Uses $ 1,600 1,000 1,828 100 475 300 818 107 1,917 8,146 $ 98 55 (1,209) 300 1,380 100 6,422 500 500 8,146 $ 1,579 1,094 1,521 750 50 821 5,815 $ 1,217 3,598 500 500 5,815 $ 1,626 1,523 750 50 774 4,723 $ 1,218 2,505 500 500 4,723 $ 1,674 2,232 750 50 726 5,432 $ 1,724 2,299 750 50 676 5,499 $ 1,839 2,660 500 500 5,499 $ $ 8,203 1,000 2,922 3,144 4,531 475 300 3,818 307 4,914 29,615 $ 98 55 (1,209) 300 7,440 100 17,831 2,500 2,500 29,615 SOURCES OF FUNDS Chandler Peoria Phoenix Mesa FTA 5339 CMAQ PTF RPTA MAG Glendale Total Sources FY 2012-2016 39 Five – Year Operating Forecast and Capital Program METRO 1,786 2,646 500 500 $ 5,432 May 2011 FIVE-YEAR CAPITAL PROGRAM – FY 2012 THROUGH FY 2016 Capital projects included in the five year program include:      Central Phoenix / East Valley (CP/EV) – the initial 20-mile METRO light rail spanning Phoenix, Tempe and Mesa. Northwest Extension – 5 mile alignment in Phoenix with 3.2 mile Phase I proceeding north and terminating in the vicinity of Dunlap and 19th Avenue. Central Mesa – 3.1 mile alignment extending eastbound to downtown Mesa. Tempe Streetcar – 2.7 mile alignment extending southward along Mill Avenue in downtown Tempe from Rio Salado to Southern. Phoenix West – 11.0 mile alignment from downtown Phoenix westward to the vicinity of 79th Avenue. METRO is currently in Alternative Analysis for additional high capacity transit corridors (extensions to CP/EV), developing an overall systems configuration plan, and is exploring opportunities to advance all projects in the rail portion of the Regional Transportation Plan. The Capital Program report is a multiple year (five fiscal years) forecast of the capital projects managed by METRO. Costs and revenues are reported on an accrual basis. Actual cash flow impacts may lag pending receipt of contractor billings and receipt of federal funding. FY 2012-2016 40 Five – Year Operating Forecast and Capital Program METRO May 2011 All Capital Projects -- Uses of Funds: METRO currently has a number of transit projects in various stages of planning, design or construction. The overall uses of funds associated with these projects and activities are projected to be $622 million through the five-year planning horizon. These uses of funds are summarized as follows: Uses of Funds - Capital Projects CP/EV LRT Project NW Ext Phase 1 Central Mesa Tempe South Phx West YOE ($,000) $ 14 LRV's NPR Utilities Systemwide Improvements PTF Bond Debt Service: Principal Payments Interest Payments Total Capital Costs FY 2012-2016 41 Five – Year Operating Forecast and Capital Program METRO $ 5,301 8,573 221,967 129,625 136,389 15,897 47,803 22,424 26,560 22,614 637,154 May 2011 All Capital Projects -- Sources of Funds: Funding is derived from two primary sources: Regional Sales Taxes (Public Transportation Fund), and Federal Grants. These sources of funds are summarized as follows (see also Table 6, Five-Year Capital Program / All Projects): Sources of Funds - Capital Projects Phoenix Tempe Mesa All Others Public Transportation Funds YOE ($,000) $ (33,426) (1,335) (233) 341,354 Federal Revenues: FTA Sec 5309 CMAQ Other Federal Total Capital Revenues $ 231,088 99,706 637,154 Note: Negative sources of funds reflect reimbursements to Member Cities for the CPEV 20 Mile Initial Segment Capital Project. Source of funding is Public Transportation Fund revenues to reimburse regional assets and 14 Light Rail Vehicles. FY 2012-2016 42 Five – Year Operating Forecast and Capital Program METRO May 2011 Table 6 – Five-Year Capital Program / All Projects ($000) Pre 2012 USES OF FUNDS CP/EV LRT Project Northwest Extension Phase 1 Central Mesa Tempe South Phx West Subtotal HCT Corridors 14 LRV's Non-Prior Rights Utilities Systemwide Improvements PTF Bond Debt Service: Principal Payments Interest Payments Total Capital Costs 2012 2013 2014 2015 2016 Total FY 2012-16 1,400,936 87,958 5,000 1,493,894 5,301 8,573 16,525 4,262 34,662 53,206 17,097 15,785 86,089 66,432 42,558 35,543 144,533 47,695 43,041 45,978 136,714 38,108 22,667 39,083 99,858 1,406,237 96,531 226,967 129,625 136,389 1,995,750 5,301 8,573 221,967 129,625 136,389 501,856 42,186 77,134 994 2,638 675 10,855 737 15,897 7,161 2,502 8,756 6,452 18,392 12,058 58,083 124,938 23,418 15,897 47,803 22,424 1,186 5,503 1,747,647 2,664 2,750 43,389 2,771 3,050 103,502 6,903 5,175 182,172 7,034 5,184 164,140 7,188 6,455 143,951 27,746 28,117 2,384,801 26,560 22,614 637,154 SOURCES OF FUNDS Phoenix Tempe Mesa All Others Subtotal 636,686 138,902 26,673 1,173 803,434 (11,240) (1,335) (233) (12,808) (10,000) (10,000) (12,186) (12,186) - - 603,260 137,567 26,440 1,173 768,440 (33,426) (1,335) (233) (34,994) Public Transportation Funds Sales Tax Proceeds Bond Proceeds 288,714 262,400 26,314 38,488 23,982 14,506 60,445 47,132 13,313 110,028 50,288 59,740 68,191 53,877 14,314 64,201 57,769 6,433 630,067 495,447 134,620 341,354 233,047 108,306 591,150 64,350 655,500 1,747,648 3,300 14,410 17,710 43,389 29,138 23,919 53,057 103,502 66,051 18,278 84,329 182,172 73,049 22,900 95,949 164,140 59,549 20,200 79,749 143,951 822,238 164,056 986,294 2,384,802 231,088 99,706 330,794 637,154 Federal Revenues: FTA CMAQ Other Federal Subtotal Federal Total Revenues FY 2012-2016 43 Five – Year Operating Forecast and Capital Program METRO May 2011 CP/EV LRT Project: The Central Phoenix/East Valley Light Rail Transit (CP/EV LRT) project, as defined in the Full Funding Grant Agreement (FFGA), is a 20 mile LRT project that will connect north central Phoenix, Tempe, and Mesa. The project was identified as the Minimum Operable Segment of the Locally Preferred Alternative selected in the Central Phoenix/East Valley Major Investment Study completed in 1998. As the initial starter segment, the CP/EV LRT project extends from 19th Avenue and Bethany Home Road in Phoenix to Main and Sycamore Road in Mesa. Phoenix, Tempe, and Mesa will share responsibility for funding the non-federal share of the capital costs and the ongoing operations and maintenance (O&M) costs of the project. Construction of the CP/EV LRT began in FY 2005, with revenue operation commencing in December 2008. The total capital costs of the CP/EV LRT project over the period in which funds would be received through the FFGA (FY 1999 to FY 2012) is $1.412 billion in year of expenditure dollars. FY 2012-2016 44 Five – Year Operating Forecast and Capital Program METRO May 2011 CP/EV LRT Sources and Uses of Funds: The total capital cost of the CP/EV LRT project over the FY 1999 to FY 2016 period is $1.401 billion in year of expenditure dollars. Remaining capital costs are primarily settlements of real estate acquisitions. Sources and funding are summarized as follows: CPEV Initial 20 mile Segment CAPITAL COSTS Project Costs Total Capital Costs CAPITAL REVENUES FTA Section 5309 CMAQ Total Federal Phoenix Tempe Mesa PTF Revenue Total Local Total Capital Revenue Pre-2012 2012 $1,400,936 $1,400,936 $ 5,301 $ 5,301 $ $ $ 587,200 59,750 646,950 $ $ 415,326 124,189 20,975 193,496 753,986 $1,400,936 - 1,614 (1,335) (233) 5,255 5,301 $ 5,301 FY 2012-2016 45 Five – Year Operating Forecast and Capital Program METRO 2014 2015 - - - - - ($,000) - - - 2016 TOTAL - $ $ - $$- $$- $ 1,406,237 $ 1,406,237 - $ - $- $- $ - - - - 416,941 122,854 20,742 198,751 759,288 - $ - $- $- $ 1,406,237 2013 $ 587,200 59,750 646,950 May 2011 High Capacity Transit Projects: The Regional Transportation Plan (RTP), adopted by the Maricopa Association of Governments (MAG) and financed under the one-half cent sales tax extension, identifies 57 miles of major light rail/high capacity transit corridors to be implemented by 2031. Currently the 3.2 mile Phase I extension to serve the Northwest area final design is complete and right of way acquisition is ongoing. Under the plan additional service areas are identified; a 3.1-mile light rail extension east into downtown Mesa which is in preliminary design, 2.6-miles into south Tempe, 5-miles west into Glendale, 11-miles into west Phoenix and 12-miles into northeast Phoenix. METRO is the agency charged with planning, designing, building and operating the light rail transit (LRT) system in the area. The timing of the projects in the program is depicted on the following schedule shown below: Planning was completed on the Central Mesa LRT Extension in FY 2010. Design commenced in early FY 2011 and construction activities will follow in FY 2012. Planning will be completed on the Tempe South corridor in FY 2011 with design commencing in FY 2012. Planning for the Phoenix West corridor is anticipated to complete in FY2012. The Glendale corridor will commence planning in FY 2012. Funding for future projects has two phases: 1) Planning Budget Phase: Alternative Analysis and the draft environmental document are funded from Federal Section 5339 funds, Member City contributions, and PTF. 2.) Capital Budget Phase: After entry into Preliminary Engineering, costs are included in the capital budget and funded by Federal, regional, and local sources. FY 2012-2016 46 Five – Year Operating Forecast and Capital Program METRO May 2011 Northwest Extension -- The Northwest area is a major employment and activity center located in northwest Phoenix. The corridor continues to experience significant growth in population with an expected growth of 24 percent by 2025. Along with this growth, Vehicle Miles of Travel (VMT) is expected to increase by 21 percent. Traffic congestion and capacity deficiencies are expected to increase despite planned transportation improvements. Inadequate transit service has hampered access to this area and to other Valley destinations. A Locally Preferred Alternative (LPA) was adopted by the Phoenix City Council and METRO Board of Directors in 2005. On March 6, 2007, the Council approved the Northwest Corridor Light Rail Transit (LRT) Extension as a phased project; the first 3.2mile phase, along 19th Avenue from Montebello Avenue to Dunlap Avenue, to be funded from local funds. As a result of the economic downturn, construction of the Northwest Extension will be completed in phases. Transit funding comes from sales tax revenue, of which collections have experienced a significant decrease. This decrease has caused the city of Phoenix to adjust the project schedule. The first phase will complete all right-of-way FY 2012-2016 47 Five – Year Operating Forecast and Capital Program METRO May 2011 real estate acquisition and construction of the planned landscaping elements to buffer the surrounding neighborhoods by the end of 2011. The second phase of construction is scheduled to commence in 2018, with a combination of local and federal funding. The economic situation will be closely monitored and light rail construction will begin as soon as it is financially feasible. Northwest Extension Sources and Uses of Funds: The total capital cost of the Northwest Extension project over the FY 2005 to FY 2016 period is budgeted to be approximately $101.0 million, excluding financing costs. Northwest Extension CAPITAL COSTS NPR Utilities Project Costs Total Capital Costs CAPITAL REVENUES Phoenix T 2000 Transit Tax PTF Revenue Total Local Total Capital Revenue Pre-2012 $ 3,924 87,958 $91,882 87,958 3,924 91,883 $91,883 2012 $ 575 8,573 $ 9,148 2013 $ $ (2,855) 12,003 9,148 $ 9,148 - 2014 $ $ $ FY 2012-2016 48 Five – Year Operating Forecast and Capital Program METRO - $ 2015 - - - - - - - ($,000) - - - 2016 TOTAL - $ $ - $ $ - $ 4,499 96,531 $ 101,031 - - - 85,103 15,927 101,031 - $ - $ - $ 101,031 May 2011 Central Mesa LRT Extension -- The Central Mesa LRT Extension will improve mobility and provide additional capacity in the Main Street corridor in Mesa. In addition, the project will connect the Central Mesa corridor with major activity and employment centers located east and west of the project corridor, such as Downtown Phoenix, Downtown Tempe, Sky Harbor International Airport, Arizona State University, proposed Mesa Gateway Area, and the ASU East Polytechnic campus. The project will also enhance connectivity to the Mesa Link BRT (with in-street mixed traffic operations) that currently operates as a feeder to the end-of-line Sycamore LRT station in Mesa and serves East Mesa including Superstitions Spring Mall. Planning for the Central Mesa corridor began spring 2007 with an Alternatives Analysis (AA). The AA gathered technical data and community input to help determine which route and transit technology would best serve Mesa. Eight transit options were evaluated. Through analysis, the locally preferred alternative (LPA) was identified. The recommended alternative is to extend light rail on Main Street to Gilbert Road. Phase I implementation is to extend light rail east of Mesa Drive to LeSueur by 2016. Phase II is to extend to Gilbert Road at a future date. Currently, the extension to Gilbert Road is not financed or programmed in the Proposition 400 plan. The LPA was approved by the Mesa City Council, METRO Board of Directors and the Maricopa Association of Governments in mid 2009. This extension is part of the Regional Transportation Plan and funded by Proposition 400 regional sales tax and a federal grant that has been applied for by METRO. Design for the Central Mesa LRT Extension began in FY 2011. The Central Mesa LRT extension is scheduled to commence passenger operations in 2016. Central Mesa LRT Extension Alignment FY 2012-2016 49 Five – Year Operating Forecast and Capital Program METRO May 2011 Central Mesa Extension Sources and Uses of Funds: The capital cost of the Central Mesa Extension project over the FY 2012 to FY 2016 period is budgeted to be approximately $233.6 million, excluding financing costs. Inclusive of FY 2011 design costs, the inception to date cost forecast is shown below at $238.6 million - - - - - - - ($,000) - - - Central Mesa Extension CAPITAL COSTS NPR Utilities Project Costs Total Capital Costs CAPITAL REVENUES FTA Section 5309 CMAQ Total Federal PTF Revenue Total Local Total Capital Revenue Pre-2012 2012 2013 2014 5,000 $ 5,000 $ 2,063 16,525 $18,588 $ 6,711 53,206 $59,917 $ 2,895 66,432 $ 69,327 $ 47,695 $ 47,695 38,108 $ 38,108 $ $ 4,000 4,000 $ 3,300 11,000 14,300 $20,000 11,280 31,280 $ 24,999 7,300 32,299 $ 19,000 8,200 27,200 $ $ 1,000 1,000 4,288 4,288 28,637 28,637 37,028 37,028 20,495 20,495 27,665 27,665 119,114 119,114 $ 5,000 $18,588 $59,917 $ 69,327 $ 47,695 $ 38,108 $ 238,636 $ 2015 2016 $ 7,701 2,742 10,443 TOTAL 11,669 226,967 $ 238,636 75,000 44,522 119,522 Tempe Streetcar Project -- The 2.6-mile Tempe Streetcar project is located on Mill Avenue between Southern Avenue and downtown Tempe. A map of this, with a closeup of the downtown alignment, is shown in Figure 1. The Tempe Streetcar will run in a one-way loop between Rio Salado Parkway and University Drive, going north on Mill Avenue and south on Ash Avenue. It will continue to travel north/south on Mill Avenue between University Drive and Southern Avenue. The Tempe Streetcar will operate weekday trains at 10-minute intervals during peak hours and 15 to 20-minute intervals off-peak. Weekends do not require peak service trains and will operate at 15 to 30-minute headways. Service headways will be adjusted over time to accommodate growth and service patterns. Daily ridership estimates for the project are 1,100 – 1,600 in the opening year. This ridership forecast assumes service levels comparable to existing light rail, but does not include special event ridership. It also assumes a reconfigured background bus network optimized to serve the modern streetcar alternative. This extension is part of the Regional Transportation Plan and funded by Proposition 400 regional sales tax and federal grants. Design for the Tempe Streetcar project is scheduled to will begin in FY 2012, with construction to follow in 2013. Passenger operations are scheduled to commence in 2016. FY 2012-2016 50 Five – Year Operating Forecast and Capital Program METRO May 2011 Tempe Streetcar Sources and Uses of Funds: The total capital cost of the Tempe Streetcar project over the FY 2012 to FY 2016 period is budgeted to be approximately $138.0 million, excluding financing costs. - - - - - - ($,000) - - - Tempe South Extension Pre-2012 CAPITAL COSTS NPR Utilities Project Costs $ Total Capital Costs CAPITAL REVENUES FTA Section 5309 CMAQ $ $ 4,262 $ 4,262 $ - $ $ PTF Revenue Total Local $ $ 2013 - Total Federal Total Capital Revenue 2012 - 3,410 3,410 - 852 852 - $ 4,262 $ $ 2014 2015 $ 2016 4,144 17,097 21,241 $ 4,266 42,558 $ 46,824 43,041 $ 43,041 $ 8,549 7,561 16,110 $ 21,279 9,400 30,679 $ 21,521 8,750 30,271 $ 5,132 5,132 16,145 16,145 12,770 12,770 21,242 $ 46,824 $ 43,041 $ $ TOTAL 22,667 22,667 $ 8,411 129,625 $ 138,036 13,465 3,000 16,465 $ 64,813 32,121 96,933 6,202 6,202 41,102 41,102 22,667 $ 138,036 Phoenix West Extension -- The Phoenix West Extension will improve mobility and provide additional capacity in the I-10 corridor in West Phoenix. In addition, the project will connect the West valley with major activity and employment centers located near Downtown Phoenix, such as State Capitol, Maricopa County and City of Phoenix governmental mall. The project will also enhance regional connectivity by connecting with the METRO starter line. Planning for the Phoenix West corridor began spring 2007 with an Alternatives Analysis (AA). The AA is evaluating possible routes to connect the METRO starter line with 79 th Ave in the vicinity of I-10 and the type of transit mode (either Light Rail Transit or Bus Rapid Transit) to make that connection. In July 2008, MAG Regional Council approved the recommendation for high capacity transit improvements (BRT or LRT) in the median of I-10, west of I-17. METRO is currently evaluating the various LRT and BRT alternatives that would connect the alignment along I-10 freeway to Downtown Phoenix. This extension is part of the Regional Transportation Plan and funded by Proposition 400 regional sales tax and a federal grant that has been applied for by METRO. Locally Preferred Alternative is anticipated to occur in Fall 2010 which will identify a route, transit mode and some station locations. Following the formal adoption of the LPA, METRO will generate detailed engineering designs of the selected alignment and station layouts and begin the environmental evaluation phase in compliance with the National Environmental Policy Act. FY 2012-2016 51 Five – Year Operating Forecast and Capital Program METRO May 2011 Phoenix West LRT Extension Phoenix West Extension Sources and Uses of Funds: The total capital cost of the Phoenix West Extension project over the FY 2012 to FY 2016 period is budgeted to be approximately $163.5 million, excluding financing costs. Phoenix West Extension 2012 CAPITAL COSTS NPR Utilities Project Costs $ Total Capital Costs $ CAPITAL REVENUES FTA Section 5309 Other Federal CMAQ $ Total Federal PTF Revenue Total Local Total Capital Revenue $ 2013 2014 2015 - - - - - - ($,000) - - - 2016 TOTAL - $ 15,785 $15,785 $ 35,543 $ 35,543 $ 8,756 45,978 $ 54,734 $ 18,392 39,083 $ 57,475 $ - $ 5,078 5,078 $ 17,772 1,578 19,350 $ 27,367 5,950 33,317 $ 28,737 14,458 43,195 $ - 10,707 10,707 16,194 16,194 21,417 21,417 14,279 14,279 62,598 62,598 - $15,785 $ 35,543 $ 54,734 $ 57,475 $ 163,538 FY 2012-2016 52 Five – Year Operating Forecast and Capital Program METRO 27,148 136,389 $ 163,538 73,876 27,064 100,940 May 2011 Appendix A -- The Budget Process METRO’s continuing goal is to provide the highest quality services to our member communities in the most cost effective manner. The METRO budget process is a key piece of the strategy to achieve these results in a coordinated manner and to make fiscally responsible decisions that will ultimately produce a premier transit system in Maricopa County. METRO’s budget process serves two principal purposes. Within the Corporation, development of the budget provides a forum for joint planning of objectives and tasks, with managerial and board review of programs. It sets the expectations for performance in the coming year(s). For the Corporation’s Members and partner agencies, the budget reports on the status of projects and services, detailing the agency’s operational objectives, capital improvements, and funding plans. The annual budget is prepared on an accrual basis and adopted by the Board of Directors each fiscal year. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. METRO also develops a Five-Year Capital Program and Operating Forecast as part of the annual budget process. The five-year budget focuses on the capital improvements that are planned to occur within the planning horizon, and includes:    projected costs of LRT capital expenses, projected amounts to be paid by each Member to METRO, projected amounts to be paid directly for LRT expenses by each Member (for example, for acquiring rights-of-way), and projected revenues to be received from federal funds or other funding sources. The internal process is a collaborative and iterative one, with the agency’s senior management providing strategic direction and critical review, managers and project managers preparing resource proposals, and financial staff (Including the Financial Working Group) providing feedback and technical support for the process. A review by the Rail Staff Working Group and Rail Management Committee will precede drafting of the proposed budget. Once the proposed annual budget and five-year capital plan have been published, the METRO Board provides final review and adoption. FY 2012-2016 53 Five – Year Operating Forecast and Capital Program METRO May 2011 Budget Timelines: The 2011/2012 process is outlined below, with preliminary planning beginning in February and with budget adoption scheduled for May 2011. Major phases of this process are outlined below:    Oct 31, 2010 -- Preliminary Operating Budget to City Staff February – Member City inputs for Operations Revenue March 24th -- Draft Budget to Rail Staff Working Group, and Financial Working Group for Review. April 22nd – Comments due to METRO Budget Group May 4th – Budget Submitted to RMC May Board Meeting – Budget Adopted by Board    Members' Staff METRO Budget Group METRO Directors / Advisory Groups METRO Board st Feb 1 thru th Feb 15 Prepare Templates th Feb 15 thru th Mar 15 Revenue Forecast th Mar 15 thru st Mar 31 st Apr 1 thru nd April 22 st May 1 thru th May 7 th May 7 thru th May 15 Review and Comment Respond to Questions and Issues Raised Provide Input and Direction Compile Budget Information and Prepare Draft Budget Respond to Questions and Issues Raised and Provide Direction Respond to Questions and Issues Raised Review Draft Budget Package and Provide Feedback to METRO Budget Group Compile Revisions and Prepare Final Budget Review and Approve Budget for Submission to the Board Respond to Questions and Issues Raised May Board Meeting FY 2012-2016 54 Five – Year Operating Forecast and Capital Program METRO Review Budget Formally Adopted May 2011 Appendix B – Glossary of Terms and Acronyms TERM / ACRONYM DEFINITION 5309 A reference to FTA New Starts Program, Title 49 U.S.C., Section 5309 providing funding for the design and construction of transit systems including the CP/EV LRT METRO system. 5339 Section 5339 allows FTA to make grants and agreements, under criteria established by the Secretary, to States, authorities of the States, metropolitan planning organizations, and local governmental authorities to develop alternatives analyses as defined by section 5309(a)(1). Eligible study sponsors must be able to incorporate the results of this work into an ongoing alternatives analysis study or must commit to initiate an alternatives analysis study within 12 months of the grant approval. ADOT CADD CMAQ Arizona Department of Transportation Computer aided design and drafting Federal funding program intended for Congestion Mitigation and Air Quality improvement. CNPA CP/EV LRT Concurrent Non-Project Activities Central Phoenix/East Valley Light Rail Transit - the initial 20 mile project segment of light rail in Maricopa County - with scope definition provided as part of the Full Funding Grant Agreement dated January 24, 2005. DEIS Draft Environmental Impact Statement - Submitted in advance of application for the FFGA, the DEIS identifies impacts anticipated by the prospective construction and operation of an LRT system including impacts on traffic, noise, air quality, historic and archeological sites, as well as impacts to properties along the alignment. FEIS Final Environmental Impact Statement- Submitted in advance of application for the FFGA, the DEIS identifies impacts anticipated by the prospective construction and operation of an LRT system including impacts on traffic, noise, air quality, historic and archeological sites, as well as impacts to properties along the alignment. FFGA Full Funding Grant Agreement - Inter-Governmental Agreement between the F T A and the Grantee responsible for the design and construction of a transit project. In the case of the CP/EV project, the City of Phoenix is the Grantee and METRO is acting as a sub-recipient. FTA Headways Federal Transit Administration The time interval between arriving trains or busses along a transit route. (Service Frequency) HCT High Capacity Transit – includes heavy rail, Light Rail Transit, Bus Rapid Transit modes of urban transportation. FY 2012-2016 55 Five – Year Operating Forecast and Capital Program METRO May 2011 Appendix B – Glossary of Terms and Acronyms (Cont’d) TERM / ACRONYM DEFINITION LPA The Locally Preferred Alternative alignment for a transit route among a set of options which have been analyzed. LRT LRV MAG Member Cities METRO Light Rail Transit Light Rail Vehicle Maricopa Association of Governments METRO equity members, currently Phoenix, Tempe, Mesa and Glendale The light rail system to be designed, constructed and operated by METRO. O&M Proposition 400 Operations and Maintenance activities required for rail passenger service. Legislative initiative to create a Public Transportation Fund passed into Arizona law in November 2004 providing roadway and public transit improvements in accordance with the Regional Transportation Plan. PTF ROW RPTA Public Transportation Fund. See Proposition 400. Right-of-Way- real property required for the LRT alignment Regional Public Transportation Authority the designated agency to receive and distribute public transit improvement funding under Proposition 400 RTP Regional Transportation Plan - for Maricopa County, a comprehensive, performance-based, multi-modal and coordinated regional plan providing a blueprint for future regional transportation investments. TIP TOD Transportation Improvement Program Transit Oriented Development - real property development typically incorporating residential and commercial uses into the areas adjacent to a transit route. METRO VMT Valley Metro Rail, Inc. Vehicle Miles of Travel for each LRT vehicle operated FY 2012-2016 56 Five – Year Operating Forecast and Capital Program METRO May 2011