PLANNING AND PROGRAMMING COMMITTEE Metropolitan …boardarchives.metro.net/Items/2001/10_October/Item_2_321.pdfMeasurement Program (TPM). The TPM data is used by MTA to allocate transit

Metropolitan

Transportation

Authority

One Gateway Plaza

LosAngeles, CA

90012-2952

31

SUBJECT:

ACTION:

PLANNING AND PROGRAMMING COMMITTEEOctober 18, 2001

FISCAL YEAR 1998-2000 TRIENNIAL PERFORMANCEAUDIT REPORT OF TRANSIT OPERATORS AND MTAOPERATIONS

RECEIVE AND FILE FISCAL YEAR 1998-2000 TRIENNIALAUDIT OF THE TRANSIT OPERATORS AND MTAOPERATIONS

RECOMMENDATION

Receive and file this report on the FY 1998-2000 Triennial Audits of the LosAngeles County Municipal Transit Operators and MTA Operations.

ISSUE

Preparation of a triennial audit is a statutory requirement under the TransportationDevelopment Act (TDA).

DISCUSSION

The MTA is required by state statute (Public Utilities Code Section §99246)included in the Transportation Development Act (TDA) to conduct an independentperformance audit off all L.A. County Transit Operators receiving TDA Article 4and 8 funds, as well as operators receiving Proposition A funds in lieu of TDAfunds. This audit is conducted every three years and a Certificate of Completionmust be sent by MTA to the California Department of Transportation (Caltrans) order for MTA to receive and allocate TDA and State Transit Assistance (STA)funds. The audits for fiscal years 1998, 1999, and 2000 have been completed.

Under direction of the MTA Board, the firm Booz, Allen & Hamilton was contractedto conduct the FY 1998-2000 performance audit of the Transit Operators. Thefollowing Transit Operator’s were included in this audit:

¯ Arcadia¯ Claremont¯ Commerce¯ Culver City Municipal Bus Lines

Fiscal Year 1998-2000 Triennial Performance Audit Report of Transit Operator and MTA Operations 1

¯ Gardena Municipal Bus Lines¯ La Mirada Transit¯ Long Beach Public Transportation Company¯ Montebello Bus Line¯ Norwalk Transit¯ City of Redondo Beach¯ Santa Monica Municipal Bus Line¯ Torrance Transit¯ Foothill Transit¯ Antelope Valley Transit Authority¯ Los Angeles Department of Transportation¯ Santa Clarita Transit¯ Access Services, Inc.¯ MTA Operations

The FY 1998-2000 performance audit reviewed all areas as mandated by the State. Areasaudited were:

¯ Verification of Transportation Development Act (TDA) data collection and reportingrequirements

¯ Compliance with Public Utilities Code (PUC) requirements¯ Progress to implement prior audit recommendations¯ Review of TDA performance indicator trend analysis¯ High level functional area performance review

In addition, the audit reviewed operators’ data submitted for the MTA’s Transit PerformanceMeasurement Program (TPM). The TPM data is used by MTA to allocate transit subsidy fundsto the Operators and MTA Operations. The recommendations and key findings of the FY 1998-2000 Transit Operator’s Triennial Performance Audit are included in the attached ExecutiveSummary.

Implementation of Prior Year Audit Recommendations

Section 6754(b) of the California Code of Regulations states that formula subsidies may allocated to a public transit operator only if the operator has made reasonable effort to irnplementthe productivity improvements recommended by the Triennial Performance Audit. MTA’splanning process requires all operators to address their progress in implementing the priorperformance audit’s recommendations in a quarterly update to the MTA. MTA compiles theoperator’s progress into a quarterly report describing the status of the operator’s implementationof the prior year recommendations. This quarterly report is reviewed by the MTA Board.

The MTA monitors each operator’s progress before approving their formula subsidy funds. If itis determined that an operator has made insufficient progress, MTA cannot approve a TDAallocation for the next fiscal year in excess of the operator’s current allocation (PUC Section99244).

Fiscal Year 1998-2000 Triennial Performance Audit Report of Transit Operator and MTA Operations 2

MTA will continue to monitor and report to the Board Operator progress through quarterlyupdates. The recommendations and key finding of the FY 1998-2000 transit performance auditare included in the attached Executive Summary.

NEXTSTEPS

For the last Triennial Audit period, the Board requested quarterly updates on the implementationof the recommendations. The Board received three such reports. The last update is included inthe Executive Summary of this report.

Staff will develop an implementation plan of the audit recommendations for Board review within90 days. Further, staff will continuously monitor and report quarterly progress on therecommendations.

ATTACHMENT(S)

A. FY98-FY00 Performance Audit Executive Summary

Prepared by: Nalini Ahuja, Project Manager

K~en Helt ,~ o /\oDeputy Executive Officer, Countyw~,de

Services and Coordination

~,:(ec~t~e Officer, Countywide Planningt~m"Development

Allan ~. Lipsky ~ g~Office of the Chief Executive Officer

Fiscal Year t998-2000 Triennial Performance Audit Report of Transit Operator and MTA Operations 3

EXECUTIVE SUMMARY

presented to

Los Angeles County Metropolitan Transportation AuthorityBus Operators Subcommittee

FY98-FY00 Triennial PerformanceAudits of the Los Angeles County

Transit Operators

presented by

Booz-Allen & Hamilton Inc.in association with

O’Melia Consulting

September 28, 2001

TABLE OF CONTENTS

¯ Introduction

¯ MTA Findings

¯ ASI Findings

¯ Systemwide Findings & Conclusions

September 28, 2001

INTRODUCTION

September 28, 2001

TDA Triennial Performance Audits Are a StateRequirement

Booz.Allen & Hamilton Inc., in association with O’Melia Consulting, wasretained by MTA to conduct the State required transit operator performanceaudits

The following operators were audited:Access Services, Inc.Antelope Valley Transit AuthorityCity of ArcadiaCity of ClaremontCity of CommerceCulver City Municipal Bus LinesFoothill Transit

Gardena Municipal Bus LinesCity of La Mirada

-- Long Beach Transit

-- City of Los Angeles (LADOT)

-- LACMTA (operations)-- Montebello Bus Lines-- Norwalk Transit

-- City of Redondo Beach-- City of Santa Clarita-- Santa Monica Municipal Bus Lines

-- Torrance Transit

Separate reports have been prepared for each transit operator, and forLACMTA, This presentation discusses audit findings and recommendations forall of the operators

September 28, 2001 1 Introduction

,Performance Audits Are Intended to Provide Useful andObjective Assessments

The scope of the Los Angeles Performance Audit Program wasdesigned to meet State requirements as well as LACMTA TPM programrequirements

The audit period includes Fiscal Years 1998, 1999, and 2000 - theperiod from July 1, 1997 through June 30, 2000 - with Fiscal Year 1997used as a base year for comparison

¯ Performance audit reports are intended to provide a useful internalmanagement tool for each operator

LACMTA should be able to use the performance audits to satisfy Staterequirements, verify that each transit operator is making satisfactoryprogress to implement prior audit recommendations, to verify thatoperator productivity is improving

Typically, audits are conducted every three years. However, the FY97audits were conducted a year late leaving operators only two years torespond to recommendations in the FY97 audit for compliancefindings in these FY00 audits

September 28, 2001 2 Introduction

MTA FINDINGS

September 28, 2001

Compliance Findings for MTA are Generally Positive,with Only a Few Areas of Non-Compliance

Data Collection and Reporting: MTA is compliant with the collectionand reporting of service-related data (e.g., passengers, miles, andhours). The reporting of employee FTEs and local subsidies andauxiliary revenues are data items found to be in non-compliance

Compliance with PUC Requirements: MTA is in full compliance withall PUC requirements

Pro_qress to Implement Prior Audit Recommendation_~: MTA fullyimplemented three of seven prior audit recommendations. Onerecommendation was found to be no longer relevant. Tworecommendations relating to data reporting and workers’compensation costs were not adequately addressed and are continuedas recommendations for this audit period. MTA deferred action on thefinal recommendation calling for simplification of the TPM program asthis action must be initiated through MTA Countywide Planning

September 28, 2001 3 MTA Findings

MTA’s Cost Effectiveness, Cost Efficiency, and Safetymproved Dunng the Audit Period but Service

Productivity Declined Slightly

The focus across MTA operations of reducing costs is evident inMTA’s performance indicators. Despite an increase in service levels of11%, MTA’s operating costs increased only 6.7 % resulting in areduction in both cost per passenger and cost per hour

Verified TDA Statistics &Performance Indicators

Operating Costs (a)Unlinked PassengersVehicle Service HoursVehicle Service MilesCollision AccidentsCost EffectivenessOp. Cost Per PassengerCost EfficiencyOp. Cost Per Vehicle Service Hour

Base YearFY97

Percentage ChangeConsumer Price Index (CPI-W)

$724,871,167385,576,767

6,575,96884,298,036

851

$1.88

Audit Review PeriodFY98 FY99

$717,372,293 $802,114,085404,066,463 398,730,791

6,700,263 6,909,29484,249,798 88,196,269

1,398 907

$1.78 $2.01

FY00$773,292,737417,414,595

7,302,34493,770,974

721

$1.85

% ChangeFY97-FY00

6.7%8.3%

11.0%11.2%

-15.3%

-1.5%

2.7% 5.6%

$110.23 $107.07 $116.09 $105.90 -3.9%Service ProductivityPassengers Per Vehicle Service Hour 58.6 60.3 57.7 57.2 -2.5%Passengers Per Vehicle Service Mile 4.57 4.80 4.52 4.45 -2.7%SafetyCollision Accidents per Million VSM 10.1 16.6 10.3i 7.7 -23.8%

1 °2% 1.7%

¯ MTA’s service productivity performance over the audit period reflectsthe significant efforts made by the agency to reduce overcrowding byincreasing service levels. Both ridership and service levels are upover the audit period

September 28, 2001 4 MTA Findings

Three Recommendations are Offered for Considerationby MTA

¯ Examine financial and performance data collection and reportingprocesses to ensure consistency among reports (continued from prioraudit)

¯ Expand monitoring and control efforts of workers’ compensation costsand claims (continued from prior audit)

Upon completion of the draft MTA Short Range Transit Plan, MTAshould complete work to develop a regional plan with the municipaloperators

September 28, 2001 5 MTA Findings

ASI FINDINGS

September 28, 2001

There are No Negative Compliance Findings for ASI

Data Collection and Reporting: ASI does not receive TDA funds andtherefore does not provide operating and financial data to the StateController, nor is ASI required to submit TPM data to MTA. ASI doesreport information to the FTA and this information may be used byMTA to assess performance

¯ Compliance with PUC Requirements: ASI is in full compliance withapplicable PUC requirements

Pro_clress to Implement Prior Audit Recommendations: ASI has fullyimplemented five prior recommendations and has made reasonableeffort to implement a sixth. The seventh recommendation (i.e., verifyattainment of objectives for the Steady/Ready service concept prior toapplication Countywide) was not implemented

September 28, 2001 6 ASI Findings

ASI Service Quality, Safety and Cost EffectivenessImproved Over the Audit Period but Service ProductivityDeclined

Through FY99, ASI was successful in reducing both purchasedtransportation and internal ASI costs per passenger. In FY00,purchased transportation costs per passenger increased dramaticallyas a result of the job market becoming more competitive andimpacting wage rates, and implementation of the Steady/Readyconcept in 80% of ASI service areas

Summary Performance Indicators

Unlinke d PassengersCost Effectiveness :Purch. Transp. Costs PerPassengerAllOther AS ICosts PerPassengerTotalOperatingCosts PerPassengerAllOther AS IFunctions As % ofYotalCostsService Productivity: Passengers PerHr.Safety & Reliability:Percent Requests DeniedOn-Time PerformanceMiles Between Collison AccidentsInjuries Per 1,000 PassengersConsumer Price Index (CPI-W)

Base Yr.FY97

864,429

$21.78$7.11

$28.9025%2.7

0.9%91.7%

62,2400.07

Audit Review PeriodFY98 FY991,178,277 1,577,041

$20.62 $18.44$5.19 $4.51

$25.8I $22.9520% 20%3.0 3.0

0.5% 0.6%91.6% 91.0%

77,701 52,5470.06 0.061.2% 1.7%

FY001,603,566

$21.03$5.03

$26.0519%2.6

0.7%92.0%

85,3760.032.7%

% ChangeFY97-FY00

85.5%

-3.5%-29.3%

-9.8%-21.6 %-2.4%

-24.1%0.3%

37.2%-63.5%

5.6%

¯ Productivity improved through FY99, then declined in FY00. Servicequality and safety have improved - on-time performance is up, tripdenials are down, miles between accidents are up

September 28, 2001 7 ASI Findings

Four Recommendations are Offered for Consideration byASI

Separate ADA mandated service from other CTSA service andactivities and broaden the definition of CTSA activities, duties andservices to include those items that are not specifically mandated byADA requirements

¯ Implement strategies to reduce costs (e.g., re-evaluate contractingrequirements)

¯ Reduce certification costs and the number of denials overturnedduring the appeals process

¯ Include regional coordination issues of the ASI Business Plan in theCountywide Short Range Transit Plan

September 28, 2001 8 ASI Findings

SYSTEMWIDE FINDINGS & CONCLUSIONS

September 28, 2001

Cost Effectiveness and Service Productivity PerformanceVaried Greatly Across the County

OPERATOR

Access Services

Antelope Valley

City of Arcadia

City of Claremont I

City of Commerce

Culver City

Foothill Transit

Gardena

City of La Mirada

$52.64 (+)

$61.85 (+)

FIXED-ROUTE

Cost/Hour Passengers/Hour

25.7 (-)

$82.22 (-) 52.2 (-)

$76.84 (-) 47.0 (+)

27.8 (-)

55.8 (+)

41.0 (+)

41.7 (+)

52.0 (441.3 (-)

25.2 (+)

(-) 19.0 (+)

(-) 58.0 (-)(-) 28.9 (+)

$70.22 (+)

DEMAND RESPONSE

Cost/Hour Passengers/Hour

$68.53 (+) 2.6 (-)

$73.08 (+) 2.7 (-)

$37.06 (-) 5.6 (+)

S48.23 (+)

S77.36 (-)

$43.23 (+)

S62.31 (-)

S48.54 (-)

7.3 (-)

1.8 (+)

2.7 (-)7.4 (+)

Long Beach Transit $64.53 (-) $38.83 (+) 3.6 (+)City of Los Angeles $64.66 (+)

LACMTA $96.14 (+)

Montebello Bus Lines $56.66 (+) $47.07 (+) 3.8 (+)Norwalk Transit $69.23 (+) $87.77 (-) 3.5 (-)

Redondo Beach 6.2 (-)Santa Clarita $62.92 $70.57 (-) 2.7 (-)

Santa Monica $65.51

Torrance Transit $96.59 $18.71 (+) 3.7 (-)

Perform~n~’e (relati~ to ~1~1 f~r t-~f/h~r~. Im r^ ~+ ,,,,p,,,v,ng r~^ r ,- ~=c,in,ngData from Each Operator’s TDA indicators in the pe#ormance audit repod. Not all operator’ssewices are audited as pad of the TDA audits, and are not included in these Rumbers.

September 28, 2001 9 Systemwide Findings & Conclusions

All Operators are At Least Partially Compliant with PUCand Reporting Requirements

OPERATOR

~,ntelope Valley

City of Arcadia

City of Ciaremont

City of Commerce

DATA REPORTING

4

2

(repoding consistency)2

(reportingconsistency)2

(voucher program exclude(I)2

PUC COMPLIANCE

(late filing of SC report 2 years)

No. of PriorRecommendations Fully

Partially Implemented5 of 5 reasonable effort

2

(STA efficiency)

2 of 2 reasonable effort

41 of 1 reasonable effort

1 of 4 reasonable effort

t of 1 reasonable effortCulver City (ridersh[p counts) (STA efficiency, late filing of SC reports)2 2

0 of 2 reasonable effortFoothill Transit (FTEs) (late report submittal, STA efficiency)2 2

4 of 4 reasonable effortGardena (reporting consistency, peak vehicles) (budget growth)2

4 3 of 4 reasonable effortCity of La Mirada (FTEs)4 4 1 of 1 reasonable effort

riot applicable 2 of 3 reasonable effort

Long Beach Transit

City of Los Angeles

Montebello Bus Lines

2

(FTEs)2

(purchased transportation)2

Norwalk Transit (cost allocation)2

Redondo Beach (reporting consistency)

Santa Clarita

Santa Monica

Torrance Transit

2

(financial data, FTEs)2

(FTEs)2

(reporting consistency)4 Full Compliance 2 Areas of Non-Corr

4 3 of 3 reasonable effort

25 of 5 reasonable effort

(late fiiiog of SC report 1 year)

4 1 of 1 reasonable effort

1 of 3 reasonable effort2

(STA efficiency)2

(STA efficiency)2

(STA efficiency)

4 of 4 reasonable effort

3 of 4 reasonable effort,1 no longer relevant

;~liance, Notes indicate opportunity(ies) for improvement.

NOTES for PUC Compliance:¯ Late Filing of SC Report: StateController’s Reports must be filedwithin 90 days of the end of thefiscal year (110 days if filingelectronically). Fiscal andcompliance audits must be filedwithin 180 days of end of fiscalyear.

¯ STA Efficiency: Requires thatgrowth in cost per hour cannotexceed growth in CPI for eachyear, or the three year runningaverage of cost per hour cannotexceed CPI growth over theperiod.

¯ Budget Growth: STA limitsbudget growth at 15% per yearunless reasonable justification canbe provided.

September 28, 2001 10 Systemwide Findings & Conclusions

Categories of Recommendations Presented on theFollowing Page Include the Following

¯ Data Collection and Reporting: Recommendations relating to datareporting consistency and adherence to correct data definitions

¯ Performance Monitoring: Recommendations calling forimplementation of or improvements to performance monitoring ofdirectly operated or contracted service

¯ Cost Control Including Cost Allocation: Recommendations pertainingto cost control measures (e.g., extraboard sizing, workers’ comp) how costs are allocated to function and/or mode

¯ Operations, Service Delivery, Maintenance and Fleet:Recommendations covering service efficiency, scheduling,maintenance and vehicle concerns

¯ Contract Management and Oversight: Recommendations foroperators who contract for service, relating to control and oversight ofcontract operations

I IUIlllIII~ allU ~UIIIIIIIOLIGLIUII. ~ll A;~AVu.,~, ,u~u~.~u~uu~=~ not fittingother categories, relating to policy and management issues

September 28, 2001 11 Systemwide Findings & Conclusions

Recommendations Focus on C.ost Control and OperationsIssues as Well as Data~ Reporting

OPERATOR

Antelope Valley

City of Arcadia

City of Ciaremont

City of Commerce

Culver City

Foothill Transit

Gardena

City of La Mirada

Long Beach Transit

Total Number ofRecommendations i Data Collection

& ReportingPerformanceMonitoring

Type of Recommendation

Cost ControlIncluding Cost

Allocation

Operations,Serv ce Delivery,Maintenance &

Fleet

ContractManagement &

Oversight

City of Los Angeles 3 3Montebello Bus Lines 4 1 2 1Norwalk Transit 4 2 2Redondo Beach 2 1Santa Clarita 1 1Santa Monica 3 1 1Torrance Transit 2

Planning &Administration

September 28, 2001 12 Systemwide Findings & Conclusions

Countywide Cost per Hour Improved Over the AuditPeriod, but Service Productivity Also Fell

For all services provided by MTA, ASI, and the included operators,cost per hour was down 2.9 percent, but passengers per hour also fellby 3.2 percent. MTA’s cost control measures and service expansiondrove countywide trends

Bus

Municipal & Included Operators

MTA

TOTAL

Demand Response

Municipal & included Operators

TOTAL

Rail

Heavy Rail

..........L.!.g..h..t.. Rail

TOTAL

TOTAL SYSTEMCPi up 5.6% from FY97 to FY00.

Cost Per Hour

FY97 FY00 ~ % Change

$ 60.45 $ 65.85 8.9% 37.8 39.0

.$....9..8....2...0.,..$...e..6..j..,!..,..2.j..o./.,.., ...... 55.:.8.., .................5..2.:..0.$ 87.87

$ 29.06

$ 77.90

$ 55.32

$ 354.85

$ 387.00

$ 376.97

$ 93.28

$ 87.50

$ 35.17

$’ 68.53

$ 52.82

$ 250.84

$ 152.35

$ 282.87

$ 90.58

-0.4% 50.9 48.2

21.0%

-12.0%

-4.5%

-29.3%

-60.6%

-25.0%

-2.9%

Passengers Per Hour

FY97 FY00 % Change

3.2°/,

-6.9o/~

-5.2%

4.5 3.3 -26.0%

2.7 2.6 -2.4%3.g 3.0 -23.1%

131.3 150.7 14.7%

116.0 152.3 31.3%

120.8 151.5 25.4%

48.7 47.1 -3.2%

September 28, 2001 13 Systemwide Findings & Conclusions

In FY00, LA County Operators Served 528,000,000Passengers, a 10.4 Percent Increase over FY97

Data consistency and reporting generally improved over the period butsignificant issues still remain for many operators. MTA should workwith operators countywide to improve data reporting processes

Operators were generally in compliance with PUC requirements - theexception is the growth in Cost per Hour greater than CPI for severaloperators

With only two years since the last audits for FY97, operators had littletime to respond to prior audit recommendations but made excellentprogress in doing so

Cost per hour for the county as a whole went down, but this was dueto MTA trends. The overall increase in cost per hour for the includedoperators was 8.9% for fixed route service and 21% for demandresponse. ASI cost per hour did fall by 12%

Countywide service productivity fell. Overall demand response andfixed route service productivity fell (the included operators did see animprovement in fixed route service productivity). Rail productivityimproved

September 28, 2001 14 Systemwide Findings & Conclusions