executive management and audit committee …

E X E C U T I V E M A N A G E M E N T A N D

A U D I T C O M M I T T E E

S E P T E M B E R 2 3 , 2 0 1 6

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

ROSTER EXECUTIVE MANAGEMENT AND AUDIT COMMITTEE

COUNTY MEMBER

OCTA: 1 vote

Shawn Nelson (Chair) Supervisor, 4th District

RCTC: 1 vote

Daryl Busch (Vice-Chair) Mayor City of Perris

VCTC: 1 vote

Keith Millhouse (2nd Vice-Chair) Council Member City of Moorpark

METRO: 1 vote

Michael Antonovich Supervisor, 5th District County of Los Angeles

SANBAG: 1 vote

Larry McCallon Mayor City of Highland



EXECUTIVE MANAGEMENT AND AUDIT COMMITTEE MEETING

FRIDAY, SEPTEMBER 23, 2016 – 9:00 A.M. LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY (METRO) BOARD ROOM ONE GATEWAY PLAZA, 3RD FLOOR LOS ANGELES, CALIFORNIA 90012

AGENDA DESCRIPTIONS The agenda descriptions are intended to give notice to members of the public of a brief general description of items of business to be transacted or discussed. The posting of the recommended actions does not indicate what action will be taken. The Committee may take any action that it deems to be appropriate on the agenda item and is not limited in any way by the notice of the recommended action. The Chair reserves the right to discuss the items listed on the agenda in any order. A person with a disability may contact the Committee Secretary’s office at (213) 452-0255 or via email [email protected] at least 72-hours before the scheduled meeting to request receipt of an agenda in an alternative format or to request disability-related accommodations, including auxiliary aids or services, in order to participate in the public meeting. Later requests will be accommodated to the extent feasible. SUPPORTING DOCUMENTATION The agenda, staff reports and supporting documentation are available from the Board Secretary, located at One Gateway Plaza, 12th Floor, Los Angeles, CA 90012, and on the Metrolink website at www.metrolinktrains.com under the Agenda link. PUBLIC COMMENTS ON AGENDA ITEMS AND ITEMS NOT ON THE AGENDA Members of the public wishing to address the Board of Directors regarding any item appearing on the agenda or any item not on the agenda, but within the subject matter jurisdiction of the Board, may do so by completing a Speaker’s Form and submitting it to the Board Secretary. All speakers will be recognized by the Chairman and will be considered under Item 4 (Public Comment). When addressing the Board, please state your name for the record. Please address the Board as a whole through the Chair. Please note comments to individual Board members or staff are not permitted when addressing the Board. A speaker’s comments shall be limited to three (3) minutes. 1. Call to Order

2. Pledge of Allegiance

3. Roll Call

4. Public Comment

Executive Management and Audit Committee Agenda Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 2

REGULAR CALENDAR 5. Approval of Minutes – July 22, 2016 Executive Management and Audit Committee

Meeting Minutes It is recommended that the Executive Management and Audit Committee approve the Minutes of the July 22, 2016 Committee Meeting.

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6. Review and Reallocation of Current Vacant Senior Auditor Position

Staff will present and provide information regarding the review and possible reallocation of a recently vacated Senior Auditor position. The Executive Management and Audit Committee will make a determination on the appropriate level of the classification.

7. Request for Salary Increase for Selected Candidate - Program Manager, Fleet At its June 12, 2015 meeting, the Board of Directors amended Human Resources Policy 2.1 to require staff to have advance approval from the Board when the base salary of an employee will increase by more than five percent. It is recommended that the Executive Management and Audit Committee approve and recommend the Board approve: 1) Increase the base annual salary for the Program Manager, Fleet by 15% to

adequately compensate a current employee for taking on new responsibilities which include technical leadership and oversight for rail vehicle procurement, engineering and equipment overhaul for Tier 4 locomotives.

2) Upon Board approval issue retroactive pay effective September 23, 2016.

The increase in salary will be covered by salaries for current vacant positions and will be absorbed in the labor line item for FY2016-17.

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8. Voluntary Benefits for Authority Employees

Approval is needed to enter into an agreement for voluntary benefits for Authority employees. Voluntary benefits are 100 percent employee-paid. Therefore, offering these benefits to employees would help to enhance the benefits program with no direct cost to the Authority. It is recommended that the Executive Management and Audit Committee approve and recommend the Board authorize the Chief Executive Officer to enter into an agreement with Aflac Group (“Aflac”) for Critical Illness, Accident and Hospital Indemnity insurance for Authority employees under the terms and for the reasons described in the staff report. There is no budgetary impact associated with approval of this item. The voluntary benefits are 100 percent employee-paid.

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Executive Management and Audit Committee Agenda Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 3

9. Fiscal Year 2015-16 Comprehensive Annual Financial Report and Single Audit Report Timeline Moss Adams LLP is providing an update on the timeline for the FY2015-16 comprehensive annual financial report and single audit. The Executive Management and Audit Committee may receive and file this report. There is no immediate budget impact resulting from this status report.

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10. Internal Audit Department Update The following status of audit activities of the Internal Audit Department (Internal Audit) at the Authority is for informational purposes. The Executive Management and Audit Committee may receive and file this report. There is no immediate budget impact resulting from this status report.

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11. Ticket Vending Machine Availability and Performance Staff is providing an update on ticket vending machine (TVM) availability and performance. The Executive Management and Audit Committee may receive and file this report. There is no budgetary impact as a result of this update.

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12. Chief Executive Officer’s Update

13. Chair’s Comments

14. Committee Member Comments

15. ADJOURNMENT

NEXT MEETING: Friday, November 18, 2016



MINUTES OF THE EXECUTIVE MANAGEMENT AND AUDIT COMMITTEE MEETING July 22, 2016

ITEM 5 COMMITTEE MEMBERS IN ATTENDANCE: VOTES OCTA: SHAWN NELSON (Chair) 1 RCTC: DARYL BUSCH (Vice-Chair) 1 VCTC: KEITH MILLHOUSE (2ND Vice-Chair) 1 METRO: MICHAEL ANTONOVICH1 1 SANBAG: LARRY McCALLON 1 STAFF: ARTHUR T. LEAHY, Chief Executive Officer ELISSA KONOVE, Deputy Chief Executive Officer PATRICIA TORRES BRUNO, Chief of External Affairs DON O. DEL RIO, General Counsel PATRICIA FRANCISCO, Director, Human Resources GEOFFERY FORGIONE, Associate General Counsel DOLLY HWONG, Principal Planner ELISSA K. KONOVE, Deputy Chief Executive Officer ELISABETH LAZUARDI, Senior Auditor ANDY LY, Manager, Special Projects (Fare Collections) LIA McNEIL-KAKARIS, Assistant Director, Contracts and Procurement DAVID ROGERS, Senior Auditor ARACELI BARAJAS, Executive Secretary to the Board Secretary KARI HOLMAN, Assistant to the CEO/Board Secretary Meeting minutes are presented in a format that corresponds with the Executive Committee Meeting Agenda, which is incorporated by reference with these minutes. Executive Committee meeting packets are available from the Metrolink Website (www.metrolinktrains.com) or by calling the Board Secretary at 213-452-0255. 1. Call to Order

The July 22, 2016 meeting of the Executive Management and Audit Committee was called to order by Chair Nelson, who presided over the meeting, at 9:07 a.m. at the Metro Board Room, One Gateway Plaza, 3rd Floor, Los Angeles, CA 90012.

1 Director Antonovich arrived during the discussion of Item No. 14.

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Executive Management and Audit Committee Meeting Minutes – July 22, 2016 Transmittal Date: September 16, 2016 Page 2

2. Pledge of Allegiance Vice-Chair Busch led the group in the Pledge of Allegiance.

3. Roll Call The Board Secretary called roll to confirm a quorum of the Committee was present.

4. Public Comment At this time, Chair Nelson inquired if any members of the public wished to address the Committee. With there being no requests to speak, the Public Comment period was formally closed.

REGULAR CALENDAR 5. Approval of Minutes – May 13, 2016 Executive Management and Audit Committee

Meeting Minutes Upon a motion by Director McCallon and seconded by Vice-Chair Busch, the Committee approved staff’s recommendation. There was no opposition and the motion passed unanimously. ACTION: The Executive Management and Audit Committee approved the Minutes of the May 13, 2016 Committee Meeting.

6. Renewal of Agreements for Supplemental Benefits for Authority Employees Patricia Francisco, Director, Human Resources provided a brief background on this item as detailed in the staff report. Upon a motion by Director McCallon and seconded by Vice-Chair Busch, the Committee approved staff’s recommendation. There was no opposition and the motion passed unanimously. ACTION: The Executive Management and Audit Committee approved and recommended the Board authorize the Chief Executive Officer to renew agreements with Delta Dental for dental insurance and Vision Service Plan for vision insurance under the terms and for the reasons described in the staff report.

7. Reallocation of Vacant Senior Auditor Position and Authorization for Acting Pay Assignment Arthur T. Leahy, Chief Executive Officer made a few opening remarks regarding this item. He indicated that David Rogers, Senior Auditor had recently submitted his resignation which allowed for consideration to post this position at a higher management level to enable a single person to oversee the department. He reminded the Committee that

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currently the two senior auditors were “co-managing” the department. As this position reports both to the Board and the Chief Executive Officer, this item would allow for the Executive Management and Audit Committee and Board members to discuss options for reallocation of the newly vacant position. Arthur T. Leahy noted that the senior auditors had a varied perspective than that which was proposed by Human Resources. David Roger, Senior Auditor stated that under the guidance and oversight of the department, Jim Kenan, Consultant and Elisabeth Lazuardi, Senior Auditor disagreed with staff’s recommendation. He stated that this vacancy should be elevated to a Director level position and provided the following reasons for his comments: Any level lower than a Director could prove ineffective and lead to possible

turnover A strong leader would be needed to execute the Audit Plan that is proposed later

in the agenda Los Angeles County Metropolitan Transportation Authority and Orange County

Transportation Authority have Director level audit positions Association of Local Government Auditors (ALGA) addresses key elements

necessary for an effective Internal Audit function and identifies an effective Internal Audit department. One such element is:

o Competent Leadership: “The Lead Audit Executive should be classified at a sufficiently senior level to be able to discuss and negotiate with senior management on equal footing”.

The Internal Audit department did not believe that a manager level position would rise to a sufficiently senior level person.

Director McCallon thanked the Internal Audit team for their work and questioned if they experienced any issues when interacting with senior staff. David Rogers responded that there had not been; however, he noted that the Audit Plan shows many areas of potential high risk and felt that a person with a higher position would be needed. He did note that as quoted earlier per the ALGA that the Internal Audit department did not feel that they were on equal footing. 2nd Vice-Chair Millhouse inquired as to the difference between a manager and director position on a day-to-day basis. Arthur T. Leahy stated that the two major differences would be salary and title status. He suggested returning to the Committee at its September 2016 meeting with organizational charts and employment comparisons to validate the recommendation. Arthur T. Leahy stressed that if the Internal Audit department ever felt suppressed they have a responsibility to inform the Board. 2nd Vice-Chair Millhouse agreed to return with alternatives and remarked that a strong audit function was needed. Arthur T. Leahy commented that the executive leadership team (ELT) and staff fully cooperate with the Internal Audit department in a timely manner. David Rogers stated that Arthur T. Leahy was supportive but noted that he would not be the Chief Executive Officer for years to come. He explained that the internal audit world was unique from a hierarchy perspective.

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Vice-Chair Busch asked if the Internal Audit department reported to the Deputy Chief Executive Officer. Arthur T. Leahy indicated that the Internal Audit department had a dual reporting structure to both the Board and himself as the Chief Executive Officer. Chair Nelson suggested that this item be deferred and inquired if it was urgent. Arthur T. Leahy stated that this item could come back to the Committee in September which would allow staff to speak with the Technical Advisory Committee as well as provide additional documents including an organizational chart and classification findings. Chair Nelson responded that it would be helpful to understand if there is a valid issue surrounding the title. He noted that the Authority has to be competitive. He also requested that David Rogers provide a parting memo for consideration. David Rogers confirmed that he would do so. ACTION: As directed by the Committee, this item was deferred to the next Executive Management and Audit Committee meeting and would include requested information of classification review and organizational charts with the report.

8. Compensation Report – FY2015-16 – 4th Quarter Final (April 1, 2016 through June 30, 2016)

Patricia Francisco, Director, Human Resources provided a brief background on this item as detailed in the staff report. ACTION: The Executive Management and Audit Committee received and filed this report.

9. Internal Audit Department Update

David Rogers, Senior Auditor provided a brief background on this item as detailed in the staff report. Director McCallon asked if management staff had been identified for each of the Federal Transit Administration (FTA) findings. David Rogers confirmed that staff had been identified. ACTION: The Executive Management and Audit Committee received and filed this report.

10. Advisory Services on the Operating Statement Actual vs Budget for the Month and

Six Months Ended December 31, 2016 (Report #2015-05e-SR) David Rogers, Senior Auditor provided a brief background on this item as detailed in the staff report. One recommendation to establish thresholds. Management agreed to establish process to address the comments. ACTION: The Executive Management and Audit Committee received and filed this report.

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11. Internal Audit Department – Fiscal Years 2017 and 2018 Proposed Audit Plan

Elisabeth Lazuardi, Senior Auditor provided a brief background on this item as detailed in the staff report. Director McCallon thanked the team for producing the Audit Plan and wanted to confirm that management was in agreement with the items listed. Elisabeth Lazuardi replied that the development of the Plan was a collaborative effort. 2nd Vice-Chair Millhouse commented that with the identification of these high risk areas, although important to prioritize, he wanted to ensure that staff would not be removed from their focus of safety when these audits are conducted. Elisabeth Lazuardi responded that the Audit department would be sensitive to the daily operational needs. ACTION: The Executive Management and Audit Committee approved and recommended the Board adopt the Proposed Audit Plan for fiscal years 2017 and 2018.

12. Request for Proposal No. H1657-15-Procurement of Fare Collection Systems (Kiosk/Ticket Vending Machines) Update Lia McNeil-Kakaris, Assistant Director, Contracts and Procurement introduced Andy Ly, Manager, Special Projects (Fare Collection Systems). Andy Ly provided a brief background on this item as detailed in the staff report and highlighted that after reviewing the scope and evaluation criteria of the previous procurement they proved inconsistent with the recently Board approved strategy. 2nd Vice-Chair Millhouse inquired if cash or cashless machines would be decided prior to the issuance of the new Request for Proposal (RFP). Andy Ly responded that the Title VI analysis was underway and the results would be presented to the Board in September. 2nd Vice-Chair Millhouse wondered if the old ticket vending machines (TVMs) would be auctioned off. Chair Nelson asked how staff envisioned the new RFP to be structured and questioned if it would be interchangeable and allow for price by unit with various options. Andy Ly stated that it would depend but that the goal was to be able to purchase cash and/or cashless machines. Chair Nelson mentioned that it was important to understand the Authority’s footprint and the various machines options required. ACTION: The Executive Management and Audit Committee received and filed this report.

13. Ticket Vending Machine Availability and Performance Update

Dolly Hwong, Principal Planner, Fare Collection Services provided a brief background on this item as detailed in the staff report.

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Chair Nelson questioned the slight decrease in performance and asked for the cause. Dolly Hwong stated that during the month of June 2016 there were paper stock and paper jam issues which had been resolved. Vice-Chair Busch inquired what could help the Fare Collections department in future. Dolly Hwong replied that she believed it was critical to move forward with a new RFP to comply with the Board’s strategy and to review the current vendor contracts for accountability and performance purposes. Arthur T. Leahy commented that a year ago the TVMs were not in a good performing state which has since been corrected which has allowed staff to refine the scope and RFP needs to ensure the best business case is presented to the Board in the future. ACTION: The Executive Management and Audit Committee received and filed this report.

14. Chief Executive Officer’s Update – Arthur T. Leahy commented on the following: North County Transit District (NCTD) Visit – a few members of the executive team

and himself met with members of NCTD to discuss how service disruptions are handled. He reported that currently the NCTD has a one-hour response time when incidents occur. Vice-Chair Busch inquired what about their system and Metrolink’s would match. Arthur T. Leahy replied that NCTD has their own bus fleet and their Sheriff takes the lead and handles all incidents. He noted that the Authority needs higher priorities from the Coroner, Sheriff’s department and bus bridge support. Vice-Chair Busch asked if the NCTD was faced with the same number of fatalities that the Authority faced. Arthur T. Leahy replied that they did not.

Assessment of Law Enforcement Deployment2 – Ed Pederson, Deputy Chief Operating Officer (System Safety, Security & Compliance) reported that after conducting an assessment on activities of the Antelope Valley Line, staff had decided to move resources to the San Bernardino Line. He noted that staff would assess the system needs every four months and make any adjustments accordingly.

16. Committee Member Comments Director McCallon recommended that the new TVMs include multi-language functionality as many people from other parts of the work visit Los Angeles.

15. Chair’s Comments

Chairman Nelson announced that the Tier 4 event on Monday, July 18 was successful. He mentioned that Past Chair Mayor Patrick J. Morris was in attendance and the locomotive was dedicated to him.

2 A copy of the deployment schedule is included as Attachment A to these minutes.

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17. ADJOURNMENT There being no further business for consideration by the Committee, the meeting was adjourned at 9:46 a.m.

Respectfully Submitted, Kari Holman Assistant to the CEO/Board Secretary

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LASD Dasboard July 8‐14, 2016

Fare Enforcement Operations(Number of Trains Ridden By Line)

6

63

27

13

4 26

0

VENTURA

COUNTY LINE

ANTELOPE

VALLEY LINE

SAN

BERNARDINO

LINE

RIVERSIDE LINE 91 LINE ORANGE

COUNTY LINEIE/OC LINE PERRIS VALLEY

1

12

Law Enforcement Arrest and Citations(Number of Arrest and Citations by Line)

25

0 1 20 0

3 3

0

5

2

5

Grade Crossing ‐ Trespasser Events(Number of Grade Crossing Details by Line)

8

Attachment A


SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY TRANSMITTAL DATE: September 16, 2016 MEETING DATE: September 23, 2016 ITEM 7 TO: Executive Management and Audit Committee

FROM: Arthur T. Leahy SUBJECT: Request for Salary Increase for Selected Candidate –

Program Manager, Fleet Issue At its June 12, 2015 meeting, the Board of Directors amended Human Resources Policy 2.1 to require staff to have advance approval from the Board when the base salary of an employee will increase by more than five percent. Recommendation It is recommended that the Executive Management and Audit Committee approve and recommend the Board approve: 1) Increase the base annual salary for the Program Manager, Fleet by 15% to adequately

compensate a current employee for taking on new responsibilities which include technical leadership and oversight for rail vehicle procurement, engineering and equipment overhaul for Tier 4 locomotives.

2) Upon Board approval issue retroactive pay effective September 23, 2016. Alternative The Executive Management and Audit Committee may reject or modify staff’s recommendation. Strategic Goal Alignment This report aligns with the strategic goal to invest in our people and assets as the Program Manager position will oversee the Tier 4 locomotive project and ensure adherence to the Authority’s technical specifications and Fleet Management plan. Background The Tier 4 Locomotive program requires continuous technical and project management oversight to ensure the locomotive builder, EMD/Progress Rail, and the Authority’s engineering contractor, meet the provisions of the technical specification and contract through the completion of the project.

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Request for Salary Increase for Selected Candidate – Program Manager, Fleet Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 2

In addition, the Program Manager needs to provide technical leadership for the Tier 4 locomotive procurement which includes interfacing with other departments and vendors to resolve locomotive, equipment engineering and system issues. As such, staff conducted an extensive recruitment process starting in early 2016 to hire the Planning Manager, Fleet to serve as its Program Manager. A total of eight candidates were interviewed. After conducting several rounds of interviews and restarting the recruitment process to generate a greater pool of qualified candidates, one internal candidate was selected for the position. See Attachments A and B for successful candidate’s resume and the posted job description, respectively. In order to provide a reasonable compensation to the most qualified internal candidate, staff is bringing this item for Committee consideration. The current position is in Salary Grade M ($91,866 to $143,541). The selected internal candidate, Mr. Anthony Neil Brown, currently occupies a position in Grade M as Manager, On-Board PTC Systems; therefore his selection results in a lateral reassignment. However, since the duties and responsibilities in managing and overseeing the procurement of Tier 4 locomotives are significantly more complex than his current position, staff recommends that a 15% increase in salary would be more appropriate. Based on the recommended 15% increase, the annual salary is being proposed to be placed at $141,463. This is within the range of the Salary Grade M. Mr. Brown’s current salary is $123,011. Staff also reached out to several transit agencies (including Orange County Transportation Authority [OCTA], Los Angeles County Metropolitan Transportation Authority [Metro] and Bay Area Rapid Transit [BART]) and compared the responsibilities and compensation of similar positions. The average range of these positions varied from $118,315 to $179,500. Mr. Brown possesses 15 years of related experience and has worked for the Authority since 2009. Prior to this, he worked for Bombardier at the Authority’s Central Maintenance Facility (CMF) in a leadership capacity for two years, and at General Motors for six years, where he acquired necessary technical expertise in GETS and EMD (AC and DC) locomotives. Mr. Brown holds a Bachelor of Science in Mechanical Engineering from Mercer University. This recommendation is being made in accordance with HR Policy 2.1, Section 1.1, “Under no circumstances shall the base salary of an employee increase by more than five percent (5%) without advance approval of the Board of Directors, excluding promotions.” Budget Impact The increase in salary will be covered by salaries for current vacant positions and will be absorbed in the labor line item for FY2016-17. Prepared by: Rick Tripoli, Director, Maintenance of Equipment

Kimberly Yu, Deputy Chief Operating Officer, Planning and Project Delivery Aggie Nesh, Manager, Human Resources

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Request for Salary Increase for Selected Candidate – Program Manager, Fleet Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 3

Gary Lettengarver Chief Operating Officer

Patricia Francisco Director, Human Resources

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ATTACHMENT A

A. NEIL BROWN [email protected]

Address: 1824 Vistillas Rd. Altadena, Ca 91001 (626) 798-4835 Education: Bachelor of Science Mechanical Engineering (BMSE) Mercer University - Macon, Georgia. Software capabilities: Microsoft Excel, Word, PowerPoint, Maximus Work Order Management Work Experience: Southern California Regional Rail Authority SCRRA (Metrolink) Manager PTC Onboard Systems (July 2014 – Present) Outfitting all Locomotives and cab cars with PTC Develop 4 new hire On-board engineers to build PTC department PTC Mechanical Systems Integrator (July 2010-July 2014) Positive Train Control – Equipment Department Representative for PTC Locomotive Fleet Plan (Fleet Replacement Analysis) Project Manager Tier 4 Locomotive Mechanical Compliance Officer (July 2009-July 2010) Project Manager – MP36 Loco Procurement, administered contract EP161-06 Project Manager – F59PH Repower Loco Overhaul, administered SP247-08 Six Sigma Black-belt certification w SCRRA MP36 locomotive reliability project Bombardier Transportation (Metrolink CMF) Metrolink CMF – Locomotive Shop Electrical Technician (6/2007 – 7/2009) Relief Supervisor, Locomotive Shop ISO 9001 Lead Auditor certification Member Quality Audit team General Electric Company (GETS Locomotive) Locomotive Technical Advisor – GE Contract Maint. UP Account (7/2000 – 6/2007) AC and DC Locomotives – all models Member of leadership team & Six Sigma Greenbelt Certification Duties: Oversaw work & safety of contractors on customer property Coordinated work on Field Modifications Interacted with the FRA to improve maintenance procedures General Motors Corporation (EMD Locomotive) AC and DC Locomotives – All models (6/1994- 7/2000) Reliability Analyst, Contract Maintenance (1/2000 -7/2000) Field Service Engineer, (6/1996 –1/2000) Product Delivery / Field Engineer (6/1994-6/1996) Duties: Warranty Administration, Coordination of Service Activities on customer property Document and submit Performance & Reliability Guarantee Penalties Liaison to EMD engineering & coordinate with suppliers on product issues.

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invites applications for the position of:

Program Manager, Fleet

SALARY: $43.51 - $67.99 Hourly

$3,481.08 - $5,439.23 Biweekly

$90,508.08 - $141,419.98 Annually

OPENING DATE: 12/17/15

CLOSING DATE: Continuous

SUMMARY:

The Southern California Regional Rail Authority, operator of the Metrolink Commuter Rail System, is

seeking a Program Manager to oversee the fleet management program, including vehicle acquisition

and rehabilitation.

The Program Manager will be expected to manage all aspects of a major acquisition project, including

drafting and reviewing policies, assisting in the development of the program budget, negotiating

contracts, conducting investigations, making presentations, preparing evaluations and reports, writing

technical specifications related to rolling stock or other transportation related vehicles and

collaborating with other departments to ensure established processes are followed.

The ideal candidate for this position will be an effective team player and communicator. The candidate

must be flexible and able to combine technical expertise with superb analytical and organizational

skills. They should also demonstrate knowledge in the purchase and maintenance of rolling stock

equipment, full-cycle project management and contract management.

TO APPLY: This is a continuous recruiting and may close at any time. Interested applicants should

apply immediately.

ESSENTIAL DUTIES AND RESPONSIBILITIES:

The Program Manager, will plan, direct, coordinate and schedule activities of designated programs to

ensure that goals or objectives of program or project are accomplished within prescribed time frame

and funding parameters by performing the following duties personally and/or through subordinate

supervisors.

Establish work priorities and programs in the assigned area.

Coordinate the purchase of safe, reliable rolling stock equipment and maintain compliance with

Federal, State and local regulations governing compliance with the requirements of Transit Asset

Management, Condition Based and Life Cycle Maintenance, CFR Title 49 Rail Vehicle

Maintenance, Crash Energy Management and EPA locomotive emissions.

Coordinate the activities of the assigned program with other departments, agencies, utilities,

vendors and the general public.

Review project estimate or plan to determine schedule, estimated job cost, procedures for

accomplishing project, staffing requirements, and allotment of available resources to various

phases of project

Ensure completeness and accuracy of projects.

Develop and administer contracts for various services.

Develop and implement Lifecycle and Condition Based Maintenance programs and objectives

Conduct a variety of analytical and operational studies regarding program activities; evaluate

alternatives; makes recommendations; implement procedural, administrative and/or operational

changes; identify and resolve problems and potential problems taking appropriate action to

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Attachment B

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remedy situations.

Assist in the development and implementation of Departmental and program policies, goals and

objectives.

Negotiate matters related to cost, schedule and contract with vendors.

Represent the Department with other Authority departments, agencies, utilities, vendors and the

general public by answering questions and preparing and presenting oral and written reports.

Receive and respond to inquiries, requests for assistance and complaints; investigate complaints

and recommend corrective action as necessary to resolve complaints.

Represent the Department on committees and at meetings, as appropriate.

Prepare, review, control and analyze the program's annual operating budget.

Manage the issuing of requisitions for the purchase of supplies, equipment and services; oversee

periodic billings and maintenance of files and records.

Review changes in laws, regulations and guidelines for their effect on program activities;

evaluate the effect of such changes; and recommend and implement changes to policies and

procedures as required for compliance.

Develop record maintenance systems, procedures and training necessary for maintaining

effective liaison with other departments.

Establish and maintain a variety of paper and electronic records.

Contribute to or writes staff reports for the Board of Directors.

Confer with superiors to discuss work projects and establish priorities.

Assist the Chief, Deputy Chief or Director in evaluating cost-effective methods of service delivery

within the Department.

Perform general administrative work as necessary, including preparing reports and

correspondence, reviewing correspondence, copying and filing documents, entering computer

data and preparing spreadsheets, etc.

Maintain knowledge of SCRRA's strategic plan, policies and procedures.

Must represent the SCRRA in a professional and courteous manner when dealing with, but not

limited to, contractors, vendors, consultants and Metrolink employees.

May perform the work of other programs under unusual or emergency circumstances.

Performs related duties and responsibilities as assigned.

MINIMUM REQUIREMENTS TO PERFORM ESSENTIAL JOB FUNCTIONS:

Must possess a high school diploma or GED equivalency certificate.

Eight years experience in rolling stock maintenance with emphasis on locomotives both DC and

AC propulsion.

Five years experience in project management.

Six years experience in cost/scheduling utilizing an automated project management system.

Valid Class C Driver's License with a satisfactory driving record of no more than three moving

violations and no DUI's within the last three years.

In addition to the requirements above, candidates for this current vacancy should also have:

Knowledge of commuter railroad operations.

Previous experience with the manufacturing and delivery of and rehabilitation of rail vehicle

fleets.

Demonstrated experience in contract administration.

Experience performing complex statistical, mathematical and comparative analysis on vehicle

performance.

Strong and effective communication skills both verbally and in writing.

Demonstrated strong and effective organizational and time management skills.

Expert in Microsoft Office.

SUPPLEMENTAL INFORMATION:

Selection Process:

Following a review of resumes and/or applications, only the most highly qualified applicants will be

invited to continue in the selection process. Eligible applicants will be notified of the exact time and

place of assessments and interview. Candidates will be interviewed to determine their relative

knowledge, skills and ability in job related areas. Offers of employment may be contingent upon

successful completion of a reference check, including degree verification and criminal records check

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provided through SCRRA.

In compliance with the Americans with Disabilities Act, the SCRRA will provide reasonable

accommodations to qualified individuals with disabilities and encourages both prospective and current

employees to discuss potential accommodations with the employer. If you believe you possess a

disability that requires accommodation for the testing process, please provide notice with your

application materials or call the Human Resources Department at (213) 452-0417. Proper supporting

documentation may be requested by SCRRA in order to accommodate special needs of candidates.

The SCRRA is an Equal Opportunity Employer. EEO/ADA

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TRANSMITTAL DATE: September 16, 2016 MEETING DATE: September 23, 2016 ITEM 8 TO: Executive Management and Audit Committee

FROM: Arthur T. Leahy SUBJECT: Voluntary Benefits for Authority Employees Issue Approval is needed to enter into an agreement for voluntary benefits for Authority employees. Recommendation It is recommended that the Executive Management and Audit Committee approve and recommend the Board authorize the Chief Executive Officer to enter into an agreement with Aflac Group (“Aflac”) for Critical Illness, Accident and Hospital Indemnity insurance for Authority employees under the terms and for the reasons described in the staff report. Alternative The Board may direct staff to: 1) Select another carrier for voluntary benefits;

2) Obtain proposals from other voluntary benefits carriers;

3) Not offer voluntary benefits to Authority employees.

Strategic Goal Alignment This report aligns with the strategic goal to invest in our people and assets. Staff’s recommendations contribute to this goal by ensuring that the Authority provides a competitive and comprehensive benefits package to recruit and retain a qualified and diverse workforce.

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Voluntary Benefits for Authority Employees Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 2

Background Voluntary benefits are insurance plans that pay cash benefits to individuals who experience a critical illness, accident or hospitalization, regardless of any other insurance coverage they may have. This supplemental insurance works hand-in-hand with medical plans to help ensure employees have the funds needed to pay health-related costs their medical insurance may not cover, including deductibles, copayments and treatment costs. They provide employees with an additional level of financial protection for themselves and their families. Voluntary benefits are 100 percent employee-paid. Therefore, offering these benefits to employees would help to enhance the benefits program with no direct cost to the Authority. Staff requested that Mercer Health and Benefits (“Mercer”), the Authority’s benefits consultant, obtain proposals from carriers for voluntary benefits, including Critical Illness, Accident and Hospital Indemnity insurance. Mercer requested proposals from four carriers: Aflac, Allstate, Humana, and MetLife. Humana declined to submit a proposal due to our industry and their limited plan design availability. The results of Mercer’s negotiations are below. Critical Illness Critical Illness insurance pays a lump-sum benefit if an insured is diagnosed with a covered illness, including heart attack, stroke and cancer. Spouse and dependent child coverage is also available at 50 percent of the employee coverage amount. Aflac’s Critical Illness insurance plan is the most competitive for the following reasons:

• Covers more conditions at 100 percent than other carriers; • Best benefit for recurrence of same condition; • Offers waiver of premium for up to 24 months if employee becomes disabled; • Can offer two employee benefit levels: $10,000 and $20,000; • Lowest premium rates for employees age 45 and over, which is 55 percent of the

Authority’s employee population. Accident Accident Insurance pays benefits to an insured who experiences an unforeseen and unexpected traumatic event resulting in bodily injury. Benefits can be used to help cover out-of-pocket expenses that are not covered by medical insurance. Aflac’s Accident insurance plan is the most competitive for the following reasons:

• Hospital admission benefit provided is twice the benefit of the other carriers; • Best overall payout for a catastrophic injury; • Lowest premium rates.

Hospital Indemnity Hospital Indemnity insurance pays benefits if an insured is confined in a hospital. Aflac’s Hospital Indemnity insurance plan is the most competitive for the following reasons:

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Voluntary Benefits for Authority Employees Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 3

• Only carrier that pays both the Intensive Care Unit (ICU) and hospital benefit when an insured is in the ICU;

• Pays up to 31 days per confinement; • No benefit reduction at age 65 and over; • Lowest premium rates.

The industry’s best practice is to retain one carrier for all voluntary benefits. Therefore, staff recommends entering into an agreement with Aflac for Critical Illness, Accident and Hospital Indemnity insurance. Overall, Aflac offers the best benefits and lowest premiums of the three carriers. Aflac requires a total of 25 insured employees to establish group billing. They also offer a three-year rate guarantee for all three plans. Attachment A, Voluntary Benefits Market Analysis, shows plan design highlights and premium rates for all three plans. Budget Impact There is no budgetary impact associated with approval of this item. The voluntary benefits are 100 percent employee-paid. Prepared by: Roxanne Randolph, Assistant Manager, Human Resources

Elissa K. Konove Deputy Chief Executive Officer

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H E A L T H W E A L T H C A R E E R

Mercer Health & Benefits Administration LLC

V O L U N TA R Y B E N E F I T S M A R K E T A N A LY S I S

S O U T H E R N C A L I F O R N I A R E G I O N A L R A I L A U T H O R I T Y ( M E T R O L I N K )JULY 2016

ATTACHMENT A

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Mercer Health & Benefits Administration LLCConfidential and Proprietary Copyright 2016 Mercer LLC. All rights reserved. 1

C R I T I C A L I L L N E S S I N S U R A N C EP L A N D E S I G N C O M P A R I S O N H I G H L I G H T S

Upon Metrolink’s authorization, Mercer Voluntary Benefits examined Critical Illness insurance product features and availability in the market with the following insurers

Criteria Aflac Group Allstate MetLife

Guaranteed Issue (GI)

• Employee: $20,000• Spouse: $10,000• Child: $10,000• Spouse and dependent

coverage is 50% of the employee benefit





Participation Requirement

• Minimum of 25 insured employees to establish group billing (Critical Illness, and hospital indemnity insureds)

• Perpetual guaranteed issue for all employees during the first three years if at least 15% participation at year 3 for guaranteed issue

• Waived with active enrollment

Benefit Payout Method

• Each condition payable 1 time (13 conditions at 100%; 2 conditions at 25%, one at $250)

• Each condition payable 1 time (10 conditions at 100%; 3 conditions at 25%)

• Total benefit amount payable up to 300% of the initial benefit amount (7 conditions at 100%; 23 conditions at 25%)

Additional Benefit (payment for multiple conditions)

• Separate diagnosis benefit includes 180-day separation period; if insured is treatment-free for 180 days and illness is not caused or contributed by a previously covered illness

• Subsequent diagnosis has 90-day separation period between conditions

• Subsequent diagnosis has 0-day separation period between conditions

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Reoccurrence Benefit (payment for same condition)

• Benefit for the same illness can be paid twice if diagnosis is separated by 180 days or if insured is treatment-free from cancer for at least 365 days

• 100% benefit for subsequent diagnosis has 365-day separation requirement or treatment-free from cancer for at least 365 days

• 50% recurrence benefit for cancer, heart attack, stroke, coronary artery bypass graft; 365-day separation period and 180-days cancer treatment free

Pre-existing Conditions • None • None • None

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Heart Attack • 100% • 100% • 100%

Stroke • 100% • 100% • 100%

Cancer • 100% • 100% • 100%

Additional Benefits

• Major Organ Transplant, End Stage Renal Failure, Bone Marrow Transplant, Sudden Cardiac Arrest, Coma, Severe Burns, Paralysis, Loss of Sight, Loss of Speech, Loss of Hearing —100%

• Carcinoma in Situ, Coronary Bypass Surgery — 25%

• Skin cancer— $250 • Mammography — $200 • Waiver of premium benefit;

90-day waiting period; up to 24 months

• Major Organ Transplant, End Stage Renal Failure, Benign Brian Tumor, Coma, Blindness, Loss of Hearing, Paralysis — 100%

• Transient Ischemic Attack (TIA), Carcinoma in Situ, Coronary Bypass Surgery —25%

• Waiver of premium benefit; 90-day waiting period; up to 24 months

• Major Organ Transplant, End Stage Renal Failure, Coronary Bypass Surgery, Alzheimer's Disease — 100%

• Partial benefit cancer, 22 listed conditions — 25%

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C R I T I C A L I L L N E S S I N S U R A N C EM O N T H L Y R A T E H I G H L I G H T S ( N O N - S M O K E R )

• $10,000 lump-sum benefit

• Rate guarantee is three years for all carriers

• Portability is offered by all carriers; master policy contingency with Aflac Group and Allstate

• Recurrence is offered by Aflac Group and Allstate at 100% of the standard benefit; MetLife at 50%

• Pre-existing condition limitation is waived by all carriers

• Attained age pricing increases in carrier specific age bands

Bold denotes lowest rate from the bidding carriers.Please note that the bidding carriers may have varying age bands.

Attained Age

Aflac Group Allstate MetLife

EMPLOYEE1 FAMILY2 EMPLOYEE1 FAMILY2 EMPLOYEE FAMILY3

25 $3.30 $4.96 $2.30 $3.44 $3.10 $6.1030 $4.75 $7.13 $3.41 $5.12 $5.30 $9.2035 $5.68 $8.53 $4.53 $6.80 $9.10 $15.0040 $7.75 $11.63 $6.70 $10.05 $16.00 $25.2045 $9.59 $14.39 $9.59 $14.40 $25.10 $38.5050 $11.67 $17.52 $12.95 $19.43 $39.30 $59.3055 $18.70 $28.06 $18.49 $27.73 $55.60 $82.9060 $18.18 $27.28 $29.22 $43.82 $80.90 $119.3065 $38.89 $58.34 $44.31 $66.47 $122.60 $179.00

1Employee + Child rates match the Employee Only rates2Employee + Spouse rates match the Family rates

3Employee + Spouse and Employee + Child rates available upon request

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A C C I D E N T I N S U R A N C EP L A N D E S I G N C O M P A R I S O N H I G H L I G H T S

Upon Metrolink’s authorization, Mercer Voluntary Benefits examined Accident insurance product features and availability in the market with the following insurers


Coverage • 24-hour • 24-hour • 24-hour

Participation Requirement• Minimum of 25 insured

employees to establish group billing

• 15% by year 3 • Waived with active enrollment

Hospital Admission

• Low: $1,000• High: $2,000

• Low: $500• High: $1,000• Additional $500 second

coverage year

• Low: $500• High: $1,000

Daily Hospital Limit• Low: $100 per day • High: $200 per day

• Low: $100 per day • High: $200 per day

• Low: $100 per day• High: $200 per day

Emergency Room• Low: $100• High: $200

• Low: $250• High: $500• Medical expense benefit

• Low: $50• High: $100

Dislocation• Low: up to $4,000• High: up to $6,000

• Low: up to $2,000• High: up to $4,000


Fracture• Low: up to $5,000• High: up to $8,000



Accident Follow-up• Low: $25• High: $50

• Low: $50• High: $50

• Low: $50• High: $100

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A C C I D E N T I N S U R A N C EO T H E R C O V E R E D B E N E F I T S

Aflac Group Allstate MetLife

• Ambulance — air and ground• Blood, plasma• Burns • Coma • Concussion• Emergency dental work• Emergency room observation• Exploratory surgery • Eye injury • Family lodging• Hospital, ICU admission, confinement• Internal injuries• Lacerations• Major diagnostic testing• Medical appliance• Medical fees• Paralysis• Physical therapy • Post-traumatic stress disorder diagnosis• Prosthesis• Rehabilitation unit• Ruptured disc, tendon, ligament, or knee

cartilage surgery benefit

• AD&D• Ambulance; air or ground• Appliance• Blood, plasma• Brain injury• Burns, skin graft• Coma • Eye injury • Family lodging• General anesthesia• ICU admission, confinement• Lacerations• Major diagnostic testing• Medical supplies• Medicine benefit• Non-local transportation• Open abdominal or thoracic surgery• Outpatient physicians treatment• Paralysis• Physical therapy • Prosthesis• Rehabilitation unit• Tendon, ligament, rotator cuff, ruptured disc

• Ambulance - ground and air• Blood, plasma, platelets• Broken tooth• Burns, skin graft• Coma• Concussion• Eye injury• Hospital, ICU admission, confinement• Hospital rehabilitation• Inpatient surgery• Lacerations• Lodging• Medical appliance• Medical testing• Non-emergency care benefit• Outpatient ambulatory surgery• Pain management• Prosthetic device• Ruptured disc, tendon, ligament, rotator cuff,

or knee cartilage surgery • Therapy services• Transportation• Urgent care

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A C C I D E N T I N S U R A N C EM O N T H L Y R A T E H I G H L I G H T S

• Rate guarantee is three years for all carriers


• Benefit reduction is 25% at age 65 and 50% at age 70 for MetLife

• Allstate and MetLife allow Metrolink to offer both a high and low plan option

Bold denotes lowest rate from the bidding carriers.

TierAflac Group Allstate MetLife

Low High Low High Low High

Employee $8.64 $14.75 $11.68 $18.36 $10.18 $19.42

Employee + Spouse

$13.54 $23.14 $21.60 $35.75 $16.21 $30.93

Employee + Child

$18.07 $30.66 $25.81 $43.63 $19.38 $36.98

Family $22.97 $39.05 $31.44 $53.92 $25.70 $49.04

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H O S P I T A L I N D E M N I T Y I N S U R A N C EP L A N D E S I G N C O M P A R I S O N H I G H L I G H T S

Upon Metrolink’s authorization, Mercer Voluntary Benefits examined Hospital Indemnity insurance product features and availability in the market with the following insurers


Participation Requirement• Minimum of 25 insured

employees to establish group billing

• Minimum of 10 applications

• None

Hospital Admission

• Low: $500• High: $1,000• Per person per covered

accident or sickness





Daily Hospital Limit

• Low: $100 per day• High: $100 per day• Up to 31 days per

confinement


confinement

• Low: $100 per day• High: $200 per day• Up to 31 days

Daily ICU Benefit


confinement


confinement

• Low: $100 per day• High: $200 per day• Up to 31 days

Additional Benefits

• Pregnancy (normal and complications)

• Intermediate intensive care step-down unit (low/high): $50/$100; up to 10 days

• Mammography benefit: $50 per calendar year

• Pregnancy (normal and complications)

• Drug addiction and alcoholism included conditions

• Pregnancy; complications and emergence Cesarean section

• Inpatient Rehabilitation (low/high): $100/$200 per day

• Up to 30 days per year

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H O S P I T A L I N D E M N I T Y I N S U R A N C EM O N T H L Y R A T E H I G H L I G H T S

• Rate guarantee is three years for Aflac and MetLife, Allstate two years with 10% participation


• Benefit reduction is 25% at age 65 and 50% at age 70 for MetLife

• Allstate and MetLife allow Metrolink to offer both a high and low plan option

Bold denotes lowest rate from the bidding carriers.

TierAflac Group Allstate MetLife

Low High Low High Low High

Employee $14.64 $19.84 $12.87 $25.74 $20.98 $41.97

Employee + Spouse

$25.30 $36.10 $34.58 $69.29 $34.67 $69.34

Employee + Child

$21.02 $28.82 $22.23 $44.59 $34.67 $69.34

Family $31.68 $45.08 $37.44 $74.88 $50.41 $100.81

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TRANSMITTAL DATE: September 16, 2016 MEETING DATE: September 23, 2016 ITEM 9 TO: Executive Management and Audit Committee

FROM: Arthur T. Leahy SUBJECT: Fiscal Year 2015-16 Comprehensive Annual Financial

Report and Single Audit Report Timeline Issue Moss Adams LLP is providing an update on the timeline for the FY2015-16 comprehensive annual financial report and single audit. Recommendation The Executive Management and Audit Committee may receive and file this report. Strategic Goal Alignment This report aligns with the strategic plan to maintain fiscal sustainability and improve organizational efficiency. Background Moss Adams LLP (Moss Adams) is an independent public accounting firm engaged by the Authority under Contract No. QM145-45 to perform external audit services for three years. This will be the third year of audit services as outlined by the contract. The Comprehensive Annual Financial Report (CAFR) presents the audited basic financial statements of the Authority, management discussion and analysis, supporting footnotes, required supplementary information and statistical information. The Single Audit is an audit of the Authority’s compliance with the requirements of law, regulations, contracts, and grants applicable to its federal programs. The Authority’s target for the completion of the FY2015-16 audit reports is December 31, 2016. On August 24, 2016 staff met with the Moss Adams audit team to discuss specific tasks for audit preparation. A more detailed timeline was developed collaboratively to ensure timely

29

Fiscal Year 2015-16 Comprehensive Annual Financial Report and Single Audit Report Timeline Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 2

issuance of the audit report by the targeted December 31, 2016 date and it was agreed to meet periodically throughout the process to monitor the progress toward this objective. Budget Impact There is no immediate budget impact resulting from this status report. Prepared by: Ronnie Campbell, Chief Financial Officer

Ronnie Campbell Chief Financial Officer

30



TRANSMITTAL DATE: September 16, 2016 MEETING DATE: September 23, 2016 ITEM 10 TO: Executive Management and Audit Committee FROM: Internal Audit Department SUBJECT: Internal Audit Department Update Issue The following status of audit activities of the Internal Audit Department (Internal Audit) at the Authority is for informational purposes. Recommendation The Executive Management and Audit Committee may receive and file this report. Strategic Goal Alignment This report aligns with the strategic plan to achieve fiscal sustainability and improve organizational efficiency. Background

I. Internal Audit Activities:

A. Chief Executive Officer (CEO) Request to review Corporate Credit Card activity and determine if usage is in compliance with governing policies and procedures. The review is for the nine (9) months ended June 30, 2016 and currently is in the final stage.

B. Pre-award cost analysis for Contract No. E743-16 – Engineering and Technical

Support for Rolling Stock Acquisition, Maintenance, and Overhaul Activities for three prime contractors (E743A-16, E743B-16, and E743C-16). Internal Audit engaged an external firm to perform the analysis. All three reports have been finalized and delivered to Contracts and Procurement.

C. Pre-award cost analysis for Contract No. E742-16 – PTC Communication & Signal Systems Design & Engineering Services for three prime contractors (E742A-16, E742B-16, E742C-16). Internal Audit engaged an external firm to perform the analysis, which is currently in progress.

31

Internal Audit Department Update Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 2

D. Performance Audit Fare Revenue Ticket Inventory Controls. The audit is included in the Board approved Internal Audit Plan Fiscal Years 2017 - 2018 and is currently in progress.

E. Contract Audit H1636-10 – Positive Train Control System – Parsons Transportation Group Inc. The audit is included in the Board approved Internal Audit Plan Fiscal Years 2017 – 2018 and is currently in progress. Internal Audit engaged a consultant to perform this audit.

F. Agreed Upon Procedures to verify a receivable of $2,329,603 due from Orange County Transportation Authority (OCTA) for the rolling stock procurement in 2006. The engagement was requested by OCTA through the SCRRA Finance Department. The work to be performed will cover the period of July 1, 2004 through December 31, 2014. The agreed upon procedures for the receivable between SCRRA Internal Audit Department and SCRRA Finance Department has been approved by the CEO.

G. Internal Audit Activities Report FY2016-17 as of August 2016 is attached (see

Attachment A).

H. Corrective Action Matrix for Audit of Pay Rates and Paid-Time Off (PTO) Transfers is attached (see Attachment B). The audit was completed and presented to Executive Management and Audit Committee (EMAC) in May 2016. Internal Audit is tracking the implementation of the corrective action plan.

II. External Audits A. The Federal Transit Administration (FTA) 2016 Triennial Review – Corrective Action.

Please see below for the deadline to submit the corrective action documentation for the identified deficiencies. Internal Audit is following up with management on the status of the corrective action.

Review Areas

Deficiency

Corrective Action

Response

Date Technical Capacity

Progress reports lack required information

Milestone Progress Reports (MPRs) for next two consecutive quarters must include all required information. Submit procedures for ensuring that future MPRs are complete.

9/28/2016

Technical Capacity

Incorrect FFR reporting

Federal Financial Reports (FFRs) for next two consecutive quarters must include complete indirect expense information. Submit procedures to ensure correct FFR reporting and validate FFR data.

9/28/2016

Technical Capacity

Inactive grants/untimely closeouts*

Work with the FTA regional office to revise grant budgets if necessary so that funds can be spent and drawn for inactive grants or close the grant and deobligate the remaining funds. Submit a realistic closeout plan. Submit revised grants closeout procedures that comply with FTA requirements.

9/28/2016

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Internal Audit Department Update Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 3

Maintenance Facility/equipment maintenance plan lacking or inadequate*

Submit documentation to demonstrate that the SCRRA’s equipment maintenance module is in operation and is properly recording preventive maintenance inspection intervals.

11/30/2016

Satisfactory Continuing Control

Failure to comply with property disposal requirements

Submit documentation identifying FTA equipment damaged in the Oxnard incident and follow FTA guidance on reimbursing the FTA share or applying insurance proceeds, as appropriate. Submit procedures for notifying FTA of any premature removal of equipment from service.

9/28/2016

Drug-Free Workplace/ Drug and Alcohol Program

FTA drug and alcohol testing program not applied to all safety sensitive employees

SCRRA to submit documentation, such as a summary of completed tests, that the AlliedBarton Security Services policy has been implemented.

9/28/2016

* Repeat deficiency

B. Member Agency Memorandum of Understanding (MOU) Audit with Los Angeles County Metropolitan Transportation Authority (LACMTA) for the FY2014-15 is currently in the final stage.

C. FY2015-16 Comprehensive Annual Financial Report (CAFR) and Single Audit. Entrance meeting with Moss Adams LLP, the external auditor, has been conducted.

D. Engagement to Perform Agreed Upon Procedures of Common Area Maintenance

Expense at Los Angeles Union Station for the calendar years ended 2012, 2013 and 2014 has been completed and a final report has been received. Metrolink management is currently in the process of reviewing the results of the report with Los Angeles County Metropolitan Transportation Authority (LACMTA) and its management company, Morlin Asset Management, Inc.

E. Caltrans Prop 1B Audit. The Authority recently received a notification of the audit

which is scheduled to start in November 2016. Budget Impact There is no immediate budget impact resulting from this status report. Prepared by: Elisabeth Lazuardi, Senior Auditor

Elisabeth Lazuardi Senior Auditor

33

ATTACHMENT A

Audit Activity Department Audit Name Status

CEO Request FinanceAdvisory Service on Timely Invoice Payment - Architectural/Engineering, Maintenance, and Public Works/Construction Contracts (2015-06-SR)

Completed - Corrective Action Tracking

Internal AuditFare Collections/Finance/ Marketing & Communications

Performance Audit Fare Revenue Reconciliation Processes and Data Integrity (Phase I) Audit (2014-03A-IA)


Internal Audit Human Resources/PayrollAudit of Employee Pay Rates and Paid Time-Off Donations (2015-04-IA)


CEO Request FinanceAdvisory Services on the Operating Statements Actual vs Budget for the Month and the Six Months Ended December 2015 (2015-05e-SR)

Completed

Pre-Award AUP ContractsPre-Award Cost Analysis of Request for Proposals E743A-16- LTK Engineering Services

Completed

Pre-Award AUP ContractsPre-Award Cost Analysis of Request for Proposals E743B-16- STV Inc.

Completed

Pre-Award AUP ContractsPre-Award Cost Analysis of Request for Proposals E743C-16- Jacobs Project Management Company

Completed

Annual Risk Assessment Entity-WideRisk Assessment and Annual Audit Plan for FY 2016/2017

Completed

CEO Request Entity-WideReview of Corporate Credit Card Activities (2017-01-SR)

In Progress

Pre-Award AUP ContractsPre-Award Cost Analysis of Request for Proposals E742A-16 - Pacific Railway Enterprises, Inc.

In Progress

Pre-Award AUP ContractsPre-Award Cost Analysis of Request for Proposals E742B-16 - SYSTRA-RailPros JV

In Progress

Pre-Award AUP ContractsPre-Award Cost Analysis of Request for Proposals E742C-16 - Xorail, Inc.

In Progress

Internal Audit Fare CollectionsPerformance Audit Fare Revenue Ticket Inventory Controls (2017-03-IA)

In Progress

Internal Audit Served as Liaison Finance 2014/15 CAFRCompleted - Corrective Action Tracking

Internal Audit Served as Liaison Finance 2014/15 Single AuditCompleted - Corrective Action Tracking

Internal Audit Served as Liaison Entity-Wide 2013/14/15 State Performance AuditCompleted - Compliance findings being tracked

Internal Audit Served as Liaison Entity-Wide SCO - Audit TCIF - Siding on AV Line

Completed Received Approval for Corrective Action Plan

Internal Audit Served as Liaison OperationsAgreed Upon Procedure of Common Area Maintenance (CAM) Expense of Los Angeles Union Station

Completed

Internal Audit Served as Liaison Operations & Finance Agreed Upon Procedure - Annual NTD report Completed

Internal Audit Served as Liaison Entity-Wide 2016 FTA Triennial ReviewCompleted- Corrective Action Tracking

Internal Audit Served as Liaison Finance 2015/16 CAFR In Progress

Internal Audit Served as Liaison Finance 2015/16 Single Audit In Progress

Internal Audit Served as Liaison Finance 2014/15 Metro MOU In Progress

INTERNAL AUDIT ACTIVITY

EXTERNAL AUDIT ACTIVITY

Southern California Regional Rail Authority Internal Audit Department

FY 2016/17 Audit Activities through 8/31/2016

34

ATTACHMENT B Southern California Regional Rail Authority

Internal Audit Department Recommendation Follow-up Status Update

As of September 12, 2016

1 | P a g e

Audit No.: 2015-04-IA Audit of Employee Pay Rates and Paid Time-Off Donations Recommendation / Corrective Action Plan

Status

Target Date

Recommendation 1 Human Resources – All documentations for pay rate increases should be filed in a timely manner.

Implemented

Immediately Implemented

Recommendation 2 Human Resources – Establish written procedures for removing separated employees’ administrative access in the ADP HR and Payroll systems immediately.

In progress

Immediately

Recommendation 3 – Advisory Comment Human Resources – Revisit HR Policy relating to the Introductory Period for appropriate changes or updates.

In progress

Pending completion of Classification and Compensation Study

Recommendation 4 – Advisory Comment Finance – Ensure Payroll Administrator receives formal training on ADP.

Implemented

Immediately Implemented

Recommendation 5 – Advisory Comment Finance & Human Resources- Evaluate staffing level for payroll administration function.

In progress

6/30/2016 Training of two accountants completed by 12/31/16

Recommendation 6 – Advisory Comment Finance – Assess the Payroll Administrator’s workspace to maintain confidential information secured.

Implemented Alternative solution in place to ensure confidential information is secured

6/30/2016 Implemented

35



TRANSMITTAL DATE: September 16, 2016

MEETING DATE: September 23, 2016 ITEM 11

TO: Executive Management and Audit Committee

FROM: Arthur T. Leahy SUBJECT: Ticket Vending Machine Availability and Performance Issue Staff is providing an update on ticket vending machine (TVM) availability and performance. Recommendation The Executive Management and Audit Committee may receive and file this report. Alternative The Executive Management and Audit Committee may request additional information. Strategic Goal Alignment This report aligns with the strategic goal to improve communications to customers and stakeholders. It provides updates related to legacy TVM availability and performance. Background TVM maintenance services have been provided by Xerox (formerly ACS Transport Solutions, Inc.) since the installation of the TVM fleet in 2001. The current fleet is programmed to dispense seven channels of ticket stock and is located at each of the 60 Metrolink stations. Overall, the fleet supports dispensing of tickets for over 30 ticketing programs. In recent years, the current TVM fleet was plagued with extremely high failure rates, failed ticket stock and numerous acts of vandalism. A TVM improvement project that upgraded database and operating system versions and applied several patches was completed in May 2015 and has helped stabilize the fleet until replacements can be procured. This upgrade cost approximately $736,000, and was funded by the Member Agencies with federal, state, and local funds. Additional mitigation steps have included a new performance-based contract for Xerox, with Xerox assuming the responsibility for ticket stock.

36

Ticket Vending Machine Availability and Performance Transmittal Date: September 16, 2016 Meeting Date: September 23, 2016 Page 2

All efforts have resulted in a reduction of overall service calls and increased TVM availability. A fare collection strategy was adopted on April 22, 2016 which included procurement and deployment of modern fare vending devices. On June 24, 2016 the Board approved the initiation of the public review process for the Title VI fare equity analysis. The results of the outreach efforts are scheduled to be presented to the Board on September 23, 2016. TVM Availability TVM availability is measured by the total number of TVMs in service, multiplied by the minutes in a month available for dispensing tickets, minus the unavailable minutes due to failures. Prior to the TVM upgrade, availability was averaging a low 60%. Since the upgrade was completed in May 2015, availability has been averaging 95% or higher. For July 2016, monthly availability was 98.44% (see Figure 1). This availability level is consistent with the levels compared to recent prior months and is primarily attributable to the gradual replacement of old ticket stock with new stock that will reduce paper jam issues. The old paper stock exhibited inconsistent thickness at the location of the Transit Access Pass (TAP) chip, whereas the printer head on the machines must be calibrated to a universal width on all TVMs. The variance in the thickness of the ticket stock created both printing errors and paper jams. As of September 1, 2016, approximately half of all TVMs have the new ticket stock. Also, 100% replacement of old credit card readers with new units, completed as of August 24, 2016, is expected to support the positive system availability trend since May 2015. Figure 1. TVM Monthly Availability

37


Monthly work orders for the month of July totaled 346 (see Figure 2). The main types of work orders reported were printer errors (67 work orders / 16% time unavailable), bill note acceptor errors (59 work orders / 21% time unavailable), and paper not inserted errors (56 work orders / 17% time unavailable). As the new ticket stock is installed into more TVMs, we anticipate printer errors will decline. Additionally, as a portion of the “paper not inserted” errors are associated with printer jams, we anticipate the new ticket stock will also reduce paper not inserted issues. Further, FCS staff have initiated a daily coordination call with Xerox maintenance staff, initiated on-site training sessions to acquire proficiency and familiarity with system hardware and software monitoring tools, and will be conducting ongoing data analytics to isolate systematic maintenance issues and assist Xerox staff in identifying preventative maintenance opportunities. The goal of these engagement and communications efforts is to enhance situational awareness of the fare collection system and continue to gradually improve system performance. Figure 2. Monthly Work Orders

Budget Impact There is no budgetary impact as a result of this update. Prepared by: Jason Gravitch, FCS Specialist, Fare Collection Services

Andy Ly, Manager, Special Projects, Fare Collections

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Kimberly Yu Deputy Chief Operating Officer (Planning and Project Delivery)

Gary Lettengarver Chief Operating Officer

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executive management and audit committee …

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