June 2, 2005 SANTA CLARA VALLEY TRANSPORTATION AUTHORITY ADOPTED BIENNIAL BUDGET FISCAL YEARS 2006 and 2007 July 1, 2005 through June 30, 2006 and July 1, 2006 through June 30, 2007 2005 Board of Directors: Joe Pirzynski, Chairperson, VTA Board of Directors, Council Member, Town of Los Gatos Cindy Chavez, Vice Chairperson, VTA Board of Directors, Vice Mayor, City of San Jose Nora Campos, Council Member, City of San Jose David Casas, Mayor, City of Los Altos Dean J. Chu, Mayor, City of Sunnyvale David Cortese, Council Member, City of San Jose Don Gage, Supervisor, County of Santa Clara Ron Gonzales, Mayor, City of San Jose Liz Kniss, Chairperson, Board of Supervisors, County of Santa Clara Robert Livengood, Council Member, City of Milpitas Jamie L. Matthews, Council Member, City of Santa Clara Forrest Williams, Council Member, City of San Jose Board Member Alternates Dennis Kennedy, Mayor, City of Morgan Hill Breene Kerr, Mayor Pro Tem, Town of Los Altos Hills Pete McHugh, Supervisor, County of Santa Clara, Board of Supervisors Dolly Sandoval, Council Member, City of Cupertino Ken Yeager, Council Member, City of San Jose Ex-Officio James Beall, Jr., Supervisor, County of Santa Clara, Commissioner, Metropolitan Transportation, Commission (MTC) John McLemore, Vice Chairperson, Metropolitan Transportation, Commission (MTC) Fiscal Resources Staff Chief Financial Officer, Roger Contreras Controller, Susan M. Stark Budget Manager, Jim McCutchen Christine Huynh Pauline Man Linda Schwartz Jessica Tran Vannak Uong SANTA CLARA VALLEY TRANSPORTATION AUTHORITY ADOPTEDBIENNIAL BUDGET ~ FISCAL YEARS 2006 and 2007 SANTA CLARA VALLEY TRANSPORTATION AUTHORITY ADOPTEDBIENNIAL BUDGET ~ FISCAL YEARS 2006 and 2007 TABLE OF CONTENTS 1. General Manager's Budget Message 2. Budget Resolution 3. Section 1, Introduction Vision & Mission Current Operations Executive Summary Schedules 4. Section 2, Operating Budget Statement of Revenues & Expense Summary of Budget Assumptions 5. Section 3, Operating Budget By Division Major Accomplishments (Fiscal Year 2004 & Fiscal Year 2005) Goals, Projects, & Major Efforts (Fiscal Year 2006 & Fiscal Year 2007) Budget Summary for Office of the General Manager Budget Summary for Office of the General Counsel Budget Summary for Administrative Services Division Budget Summary for Construction Division Budget Summary for Development & Congestion Management Division Budget Summary for Fiscal Resources Division Budget Summary for Operations Division 6. Section 4, Capital Budget Introduction VTA Enterprise Capital Projects 2000 Measure A Transportation Improvement Program ~ Introduction 2000 Measure A Capital Projects VTA Enterprise & Measure A New & Carryover Summary Schedule VTA Enterprise & Measure A New & Carryover Detail Schedule 1996 Measure B Transportation Improvement Program Introduction & Projects 7. Section 5, Appendices Appendix A, Employee Classifications by Division and Pay Ranges Appendix B, Budgeted Positions by Division Appendix C, Population Data for Santa Clara County by City Appendix D, Ten Year Summary of Santa Clara county Employment Information Appendix E, ATU Pension Fund Expenditure Plan for FY2006 and FY2007 Appendix F, Basic Fare Structure for Bus, Light Rail, and Paratransit Services Appendix G, Santa Clara Valley Transportation Authority Fee Schedule Appendix H, Congestion Management Program Member Assessments 8. Section 6, Glossary GENERAL MANAGER'S BUDGET MESSAGE We are extremely pleased to present VTA's FY2006/FY2007 Biennial Budget. After nearly three years of facing one financial crisis after another, through the monumental effort of our employees, cooperation of our labor leadership, our Board of Directors and the understanding of our loyal passengers, we have regained the financial stability necessary to support our current level of operations now and in the foreseeable future. As many will recall, we entered this past two year budget cycle with Board authorization to issue up to $80 million in bonds against the 2000 Measure A Sales Tax Revenue (to be implemented in April 2006) to support operations and prevent any further major service reductions. Perhaps the greatest accomplishment by VTA and our employees these past two years was not having to issue these bonds, retaining service levels while reducing our overall costs and actually ending this period making significant contributions to replenish VTA's reserves. While most will recall the difficulties VTA faced these past few years, there were many significant accomplishments. System performance made giant improvements...99.35% of scheduled service was delivered. While overall system ridership remains down from VTA's peak years, light rail ridership continues to grow at a double-digit pace month after month, particularly after the highly successful opening of Tasman East and Capitol Extensions. Efforts to revisit "how" several elements of our service are delivered began in earnest with the adoption of a formal Service Management Plan, the focus on Enhanced Bus and Bus Rapid Transit and the soon-to-be implemented Community Bus Service. Most recently, in partnership with SamTrans, VTA introduced three Zero Emission Buses for actual in-service testing. VTA's construction efforts and accomplishments remain the example those in the industry point to as "the format to follow to do it right". Tasman East and Capitol Light Rail Extensions were completed not only on time, but $18 million under budget and with no construction claims. This is an outstanding accomplishment by both VTA staff and our consultant teams. The completion of VTA managed highway projects including Hwy. 101, I880, 85/101 South, Bailey/101 Interchange (where VTA was able to prevent the potential loss of highway funds) further reflect the capabilities this organization has refined over the past several years. VTA's current fiscal stability was enhanced by utilizing creative financial transactions when appropriate. Among them were the completion of two lease to service transactions for our low-floor light rail vehicles and the sub-leasing transactions for VTA's older light rail vehicles to Sacramento and Salt Lake City. Working closely with State officials, VTA was able to facilitate the issuance of Garvee Bonds for Hwy. 87 improvements. Many other actions we took the past two years help set the stage for improving VTA's financial stability in the future. The adoption of a formal Fare Policy and its implementation has helped improve VTA's farebox recovery ratio and set the stage for further improvements in the future. Certainly one of the more exciting efforts was the adoption and implementation of a formal Joint Development Policy and Program supported by a professional staff with development expertise. This will not only enhance VTA's transit utilization with complementary developments, but will also provide VTA with a much-needed revenue stream that is not directly tied to sales tax or fares. The following pages offer details of the many and significant accomplishments by each of VTA's Divisions. I encourage you to take a few moments to read through them and reflect on the significant and positive impacts VTA has on this community and the region. While VTA is currently financially stable, the months and years ahead are filled with significant challenges in an ever-changing financial environment. When developing this FY2006-FY2007 Budget our primary goal was to present a fiscally sound plan with ample flexibility to adjust to a variety of conditions and issues VTA will need to be prepared to address. We believe we have accomplished this goal. There should be no doubt in anyone's mind that VTA must have an additional and significant permanent revenue stream if the organization is expected to grow and provide the services conceived in the 2000 Measure A Program of Projects. Grappling with that issue, the question of how much is needed versus palatable, reaching a consensus on form and format will occupy a great deal of VTA's Board of Director's and staff's efforts over the coming months. Key elements of this budget are included to assist the Board in this endeavor ranging from financial analysis to seeking public input to the process. The budget is designed to continue VTA's efforts to maximize cost efficiencies while still delivering quality service. Many on-going service contracts are scheduled to be revisited and re-bid, a necessary step to maintaining fiscal stability. Operations will be conducting a system-wide Comprehensive Operational Analysis to help VTA determine the best methods of service delivery for each area of our community, especially as we expand the Community Bus Program. Several efforts to improve our ridership while enhancing service to our customers are included in this budget. Among them is a special Summer Youth Pass Program. We are also recommending FREE Fares to all Senior Citizens age 67 or older and the Disabled currently not qualified for ADA/Paratransit Service during off-peak hours, Saturdays, Sundays and Holidays. As VTA completes its Tenth Anniversary Year and moves into its second decade, a myriad of exciting events and challenges are on the immediate horizon. This Summer, of course, the Vasona Light Rail Extension will open and be supported by VTA's first efforts into the Community Bus Program. On the highway side, before the end of the year, the Board will be presented with recommendations resulting from VTA's High Occupancy Toll Lane Study. And before the end of the following year, VTA staff will be presenting recommendations resulting from the Measure A Rail Corridor Studies. This will be preceded by the Board adoption of formal standards and criteria for future project prioritization. Certainly one of next year's highlights will be VTA's hosting of the 2006 American Public Transportation Association's Annual Meeting in October. This will present a unique opportunity for VTA and the community to expose thousands of transportation professionals to our many transportation accomplishments and our very special community. As I indicated at the outset, I am very pleased to present this budget to the Board of Directors and very proud of the VTA employees and their efforts in developing a fiscally sound plan. Michael T. Burns General Manager April 5, 2005 Resolution No. 05.06.08 RESOLUTION OF THE BOARD OF DIRECTORS OF THE SANTA CLARA VALLEY TRANSPORTATION AUTHORITY (VTA) ADOPTING A BIENNIAL BUDGET OF VTA FOR THE PERIOD JULY 1, 2005 THROUGH JUNE 30, 2007 (FY2006 AND FY2007) WHEREAS, on or before April 22, 2005, the General Manager presented the Santa Clara Valley Transportation Authority FY2006 and FY2007 ADOPTED Budget to the Board of Directors and mailed a copy to each City Manager and Mayor in the County of Santa Clara and to the County Executive; and WHEREAS, additional copies of the Recommended Budget were distributed to VTA's Advisory Committee membership, libraries in Santa Clara County, Santa Clara County's state and federal legislative delegation, senior and disabled groups, professional community organizations, and the news media, and were available for review on VTA's website www.vta.org and at VTA's Downtown Customer Service Center, as well as libraries and city halls throughout the County; and WHEREAS, the Recommended Budget includes all administrative, operational and capital expenses for the Congestion Management Program together with the apportionment of Congestion Management Program expenses by levy against the Managing Agency and each Member Agency to the extent necessary to fund the Congestion Management Program; and WHEREAS, the Recommended Budget was reviewed by the Administration and Finance Committee on May 19, 2005, and by the Board of Directors on April 22 and June 2, 2005, and at public meetings conducted throughout the County; WHEREAS, a list of employee position classifications and pay ranges is included in the recommended budget as Appendix A, and the amount of funds budgeted for wages, salaries and benefits for FY2006 and FY2007 is based upon VTA's position classification and pay plan and is set forth in the Statement of Revenues and Expenses in the Recommended Budget; and WHEREAS, the Board of Directors desires to adopt a biennial budget for the period of July 1, 2005 through June 30, 2007 (FY2006 and FY2007); NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Santa Clara Valley Transportation Authority that the attached recommended budget for the Santa Clara Valley Transportation Authority (marked "Exhibit A" and incorporated herein as though set forth at length), is hereby adopted as VTA's budget for FY2006 and FY2007. BE IT FURTHER RESOLVED that, effective July 1, 2005, positions may be authorized and filled, as required, by the General Manager and General Counsel, as appropriate, provided that total VTA-wide budgeted wages, salaries and benefits account is not exceeded. BE IT FURTHER RESOLVED, that, as necessary for efficient administration, position classifications may be added, modified, or deleted and salary ranges adjusted with the approval of the General Manager or General Counsel, as appropriate, provided that the changes are in accordance with applicable VTA personnel policies and procedures and are consistent with pay practices in the transportation industry. Such changes shall include pay and classification adjustments arising from agreements between VTA and its recognized labor organizations. BE IT FURTHER RESOLVED, that capital appropriations, which are not expended during the fiscal year, shall carry over to successive fiscal years until the projects are completed or otherwise terminated. BE IT FURTHER RESOLVED, that the budget shall consist of five Funds: the Transit Enterprise Fund, the Congestion Management Program Fund, the 1996 Measure B Transportation Improvement Program Fund, the 2000 Measure A Transit Program Fund and the Highway Improvement Fund. The General Manager may reallocate appropriations between budget units and cost groups within each Fund up to the limits of each Fund's annual appropriation. Any net increase in authorized appropriations to any Fund (including an allocation from reserves) shall require an affirmative vote of at least eight Directors. BE IT FURTHER RESOLVED, that the Recommended Assessments of member agencies for the Congestion Management Program are hereby approved. PASSED AND ADOPTED by the Santa Clara Valley Transportation Authority Board of Directors on June 3, 2005, by the following vote: AYES: DIRECTORS: CAMPOS, CASAS, CHAVEZ, CHU, GAGE, GONZALES, KNISS, LIVENGOOD, MATTHEWS, WILLIAMS, YAEGER, PIRZYNSKI NOES: DIRECTORS: NONE ABSENT: DIRECTORS: CORTESE Joe Pirzynski, Chairperson Board of Directors ATTEST: SANDRA WEYMOUTH, Secretary Board of Directors APPROVED AS TO FORM: SUZANNE GIFFORD, General Counsel Section I INTRODUCTION Vision & Mission VISION AND MISSION In September 1995, the Board of Directors adopted a vision and mission statement for the Santa Clara Valley Transportation Authority (VTA). This statement provides a framework for making future policy, planning and budgetary decisions. VISION STATEMENT The vision of the Santa Clara Valley Transportation Authority (VTA) is to provide a transportation system that allows anyone to go anywhere in the region easily and efficiently. This statement contains the long-range vision for VTA and portrays the desired future VTA seeks to achieve. The vision is regional, including both the immediate areas of Santa Clara County and the bordering Bay Area to which the County is linked economically, socially, and culturally. MISSION STATEMENT The mission of the Santa Clara Valley Transportation Authority (VTA) is to provide the public with a safe and efficient countywide transportation system. The system increases access and mobility, reduces congestion, improves the environment, and supports economic development, thereby enhancing quality of life. The mission or core purpose of VTA is to provide a "safe and efficient countywide transportation system." The emphasis is on an integrated transportation system that comprises the full range of mobility options, from cars, buses, and rail systems to walking and bicycle trips. The system will allow members of the public to travel easily and comfortably to their destination by the most appropriate means. POLICY DIRECTIONS In adopting the vision and mission in 1995, the Board of Directors specified four key policy directions for VTA. In March 1999, the Board adopted a fifth policy direction related to the 1996 Measure A transportation program of projects. Integrate transportation and land use Use all transportation options Create a safe, convenient, reliable and high-quality bus/rail operation Build a regional perspective In partnership with the County of Santa Clara, implement the 1996 Measure A transportation program of projects Section I INTRODUCTION Current Operations CURRENT OPERATIONS The Santa Clara Valley Transportation Authority (VTA) is an independent public agency responsible for bus and light rail operation, regional commuter and inter-city rail service, ADA paratransit service, congestion management, specific highway improvement projects, and countywide transportation planning. As such, VTA is both an accessible transit provider and a multi-modal transportation planning and implementation organization involved with transit, roadways, bikeways, and pedestrian facilities. VTA provides transit services to the 326 square mile urbanized portion of Santa Clara County that is comprised of 15 cities and the County of Santa Clara with a total population of more than 1.7 million residents. A historical summary of the county population by city is presented in Appendix C. VTA operates 69 bus routes and three light rail transit (LRT) lines within this service area. In addition, VTA funds paratransit and privately operated shuttle services in the County and participates in providing inter-regional commuter rail and express bus services. All of the bus and rail vehicles are accessible for individuals with disabilities. Map of Santa Clara County Transit Service Area -- Description The map depicts the urbanized area of Santa Clara County. It shows the locations of the following cities: Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga and Sunnyvale. This map shows the location of the existing VTA Light Rail lines and inter-modal stations, as well as the Caltrain line. In addition, it shows the major highways such as 17, 85, 87, 101, 237, 280, 680, and 880 traversing the County and some major surface streets in the County. In January 1995, VTA was designated as the Congestion Management Agency and changed from being exclusively a transit provider to an organization responsible for countywide transportation planning, funding and congestion management within the County. VTA, in partnership with the County of Santa Clara, assumed the responsibility for implementing the 1996 Measure B Transportation Improvement Program of transit and highway improvement projects. In addition, VTA is responsible for implementing the latest voter-approved transportation improvement measure - the 2000 Measure A, an essential element of VTP 2030. The following section provides a summary of VTA's services: BUS OPERATIONS VTA has an active bus fleet of 430 buses powered by clean diesel fuel, which includes 237 low-floor buses. The average age of the active fleet is about 5.7 years with the buses ranging between 1 to 13 years old. There are approximately 4,400 bus stops and 730 shelters along the bus routes. VTA also maintains nine bus park & ride lots -- five owned by VTA and four provided under a lease, permit, or joint use agreement with other agencies. Buses are operated and maintained from three operating divisions and an Overhaul and Repair (O&R) facility: Cerone Operating Division, Don Pedro Chaboya Operating Division, North Operating Division and Cerone O&R Division. LIGHT RAIL TRANSIT (LRT) VTA operates a 42-mile LRT system connecting the Silicon Valley industrial areas of Mountain View, Sunnyvale, Santa Clara, North San Jose and Milpitas to residential areas in East and South San Jose and Campbell. The LRT system has a total of 54 stations and 19 park & ride lots. It operates on three alignments: service between Santa Teresa in South San Jose and Alum Rock in East San Jose service between Mountain View and the Baypointe Station, and shuttle service between Almaden and Ohlone-Chynoweth Stations in South San Jose. A fleet of 100 new Kinkisharyo low floor light rail vehicles operates on these three routes and will be deployed on the new Vasona route, scheduled to open in Summer 2005. All 100 Kinkisharyo light rail vehicles are stored and maintained at the Guadalupe Operating Division near downtown San Jose. PARATRANSIT SERVICES VTA contracts with Outreach and Escort, Inc. to serve as a broker and provide the paratransit service through contracts with private transportation providers. Eligible riders call Outreach to schedule their trips. Outreach then assigns the trips based on the most appropriate mode that can meet the riders' needs: taxi, sedan, accessible van, or transfer to or from fixed-route. VTA is in full compliance with the Americans with Disabilities Act (ADA). CONTRACTED AND INTERAGENCY TRANSIT SERVICES VTA is also a partner in various ventures that expand the transportation options for our customers. These relationships include commuter rail, inter-county express bus lines, and rail feeder services. They are operated either by contract or through cooperative agreements. The following is a description of these services: Peninsula Corridor Joint Powers Board (PCJPB aka Caltrain) Caltrain is the commuter rail service provided by the PCJPB, which is governed by representatives from San Francisco, San Mateo and Santa Clara counties. It operates between Gilroy and San Francisco. Eighty-six trains operate between San Jose Diridon Station and San Francisco each weekday, with 53 of these trains extended to the Tamien Station in San Jose where a connection can be made to the Light Rail Transit (LRT) system. Connection to the LRT system can also be made at the Mountain View Caltrain Station. Eight peak-hour weekday trains (four northbound in the morning and four southbound in the evening) extend Caltrain from Tamien station to Gilroy. There are 32 stations along the line; 15 are located in Santa Clara County. The system uses diesel-powered locomotives. The funding share of the operating costs apportioned to each member agency is based upon morning peak period boardings that occur in each county. Altamont Commuter Express Rail Service The Altamont Commuter Express (ACE) is an 85 mile weekday commuter rail service from Stockton to San Jose via the Tri-Valley area of Alameda County. Operating on the Union Pacific railroad track, ACE service consists of two morning trains originating in Stockton and one morning train originating in Lathrop providing service to San Jose Diridon Station. Three afternoon trains provide return trip service from San Jose. Two of these trains return to Stockton and one terminates in Lathrop. ACE service began in October 1998. The San Joaquin Regional Rail Commission is the owner, operator, and policy making body for ACE service. The Santa Clara Valley Transportation Authority (VTA), San Joaquin Regional Rail Commission (SJRRC), and the Alameda County Congestion management Agency provide funding of ACE service under the terms of a cooperative service agreement. Capitol Corridor Intercity Rail Service The Capitol Corridor Intercity Rail service is a 170-mile train corridor from Auburn and Sacramento to San Jose, through Placer, Sacramento, Yolo, Solano, Contra Costa, Alameda and Santa Clara Counties. Operating on the Union Pacific railroad tracks, Capitol Corridor service consists of four daily round trips from Sacramento to San Jose and six daily round trips from Sacramento to Oakland with connecting bus service to and from San Jose. One round trip per day extends beyond Sacramento to Auburn. The train service parallels the Interstate 80 corridor between Sacramento and Oakland, and Interstate 880 between Oakland and San Jose. Service includes stops in Roseville, Sacramento, Davis, Suisun/Fairfield, Martinez, Richmond, Berkeley, Emeryville, Oakland, Hayward, Fremont, Santa Clara at Great America, and San Jose Diridon Station. The Capitol Corridor Joint Powers Authority (CCJPA), which is comprised of representatives from the eight counties served by the corridor, is responsible for managing the service. Under contract with the CCJPA, the Bay Area Rapid Transit District (BART) manages the service and Amtrak operates the service on tracks owned by Union Pacific Railroad. The funding is provided by the State of California. Inter-county Bus Services VTA sponsors two inter-county bus services through cooperative arrangements with other transit systems: The Dumbarton Express is a transbay express route operating between the Union City BART Station and the Stanford Research Park in Palo Alto. It provides the only regularly scheduled public transit service over the Dumbarton Bridge. A consortium comprised of representatives from the Alameda-Contra Costa Transit District (AC Transit), the San Francisco Bay Area Rapid Transit District (BART), the City of Union City, the San Mateo County Transit District (SamTrans) and VTA underwrite the net operating costs of the service. SamTrans and VTA are responsible for 50% of the net operating costs and AC Transit, BART and the City of Union City are responsible for the rest. The Highway 17 Express provides direct bus service from Santa Cruz to Downtown San Jose. The service is managed and operated by Santa Cruz Metro Transit District (Metro) under a Joint Powers Authority Agreement with VTA. In 2004, Caltrans and the Capitol Corridor Joint Powers Authority (CCJPA) joined as service partners by merging their connector bus service with the Highway 17 Express. This consolidation added new weekend and holiday service, more weekday trips and extended the route to the Downtown Santa Cruz Metro Center. These improvements are fully funded by Caltrans and CCJPA. VTA and Metro continue to share the operating subsidy for the remainder of the weekday service on a 50/50 basis. Rail Shuttle Program Under this program, VTA offers financial assistance to employers and entities that wish to operate shuttle bus service between LIGHT RAIL TRANSIT (LRT) stations and nearby employment/activity centers. The service is operated through a private contractor provided by VTA or sponsoring agency. Funding to operate this program is provided by the sponsoring agency, VTA, and grants from the Transportation Fund for Clean Air Act (AB434). Downtown Area Shuttle (DASH) and HP Pavilion Shuttle Programs VTA operates a free shuttle (DASH) on weekdays between the downtown San Jose Transit Mall, San Jose State University and the San Jose Diridon Train Station. VTA, the Transportation Fund for Clean Air Act, the City of San Jose, and the San Jose Downtown Association fund this service. San Jose Airport Flyer Service VTA, in partnership with the City of San Jose, provides free Airport Flyer bus service connecting San Jose International Airport terminals and airport employee parking lots with VTA's Metro/Airport Light Rail Station and the Santa Clara Caltrain Station. The City of San Jose and VTA equally share the operating costs for this service. CONGESTION MANAGEMENT VTA, as the Congestion Management Agency for Santa Clara County, is responsible for coordinating and prioritizing projects for state and federal transportation funds, administering the Transportation Fund for Clean Air Program, and coordinating land use and other transportation planning. 1996 MEASURE B TRANSPORTATION IMPROVEMENT PROGRAM (MBTIP) In November 1996, the voters in Santa Clara County approved Measure A, an advisory measure listing an ambitious program of transportation improvements for Santa Clara County. Also approved on the same ballot, Measure B authorized the County Board of Supervisors to collect a nine-year half-cent sales tax for general county purposes. Subsequently, the County Board of Supervisors adopted a resolution dedicating the tax for Measure A projects. Collection of the tax began in April 1997; however, use of the revenue was delayed pending the outcome of litigation challenging the legality of the sales tax. In August 1998, the California courts upheld the tax allowing the implementation of the Measure A transportation projects to move forward. In February 2000, the VTA Board of Directors approved a Master Agreement formalizing the partnership with the County of Santa Clara to implement the 1996 Measure B Transportation Improvement Program. With this partnership in place, the County and VTA are in a position to complete a transportation program valued at over $1.4 billion. VTA is responsible for project implementation and management of the transit and highway projects and assists in the administration of the pavement management and bicycle elements of the program. A more detailed description of the program elements can be found in Section IV of this document. To monitor the progress of the program, VTA and County staff update the Measure B Program Revenue and Expenditure Plan for each upcoming fiscal year in June. Any scope, schedule or budget changes are formally requested through this document, upon which the VTA Board of Directors and the County Board of Supervisors take action during a joint workshop. In December, VTA and County staff prepare the Measure B Program Status Report, which describes the status of each project within the program. The report is also presented to the VTA Board of Directors and the County Board of Supervisors for review and acceptance. The Measure B tax will expire on March 31, 2006. Some deferred projects may be continued with any residual funds. VTA will close-out the program during FY2006. 2000 MEASURE A TRANSIT IMPROVEMENT PROGRAM In August 2000, the VTA Board of Directors approved placing a measure on the November 7, 2000, General Election ballot allowing Santa Clara County voters the opportunity to vote on transportation improvements funded by a 30 year half-cent sales tax to take effect after the 1996 Measure B sales tax expires (March 31, 2006) in the county. More than 70% of the voters approved the 2000 Measure A. We are currently estimating projected Measure A Sales Tax Revenue of $9.9 billion in year of expenditure dollars over the thirty year term. The revenue from this Measure may be used to finance the transit projects and operations specified in 2000 Measure A and listed in VTA's VTP 2030 Transportation Plan. A draft Long-Term Transit Capital Investment Program and Expenditure Plan is currently under review, and will be updated on an annual basis to reflect actual revenues/expenditures, revised projections, and if necessary, revised priorities of the Board of Directors. VTP 2030 provides for a balanced transportation system consisting of transit, roadway, bicycle and pedestrian improvements. A more detailed description of the program elements can be found in Section IV. Section I INTRODUCTION Executive Summary Schedules The following chart is a Summary of VTA Enterprise Sources and Uses of Funds for Fiscal Year 2005 and Fiscal Year 2007. The numbers are expressed in thousand dollars. Fiscal Year 2005 Approved Total Revenues are $354,831, Total Operating expenses are $349,574, and Operating Revenues Over (under) Expenses are $5,257 Fiscal Year 2005 Approved Total VTA Enterprise Capital Expenditures are $12,048, Capital Funding is $0, Grants & Other Sources are $3,889,and VTA Enterprise Share, drawn from Reserves is $8,159. Fiscal Year 2005 Approved Beginning Reserves are $35,332, Operating Revenues Over Expenses are $5,257, Total VTA Funds for Capital Program are -$8,159, Net Local Capital Program Savings are $0, Additional Grants for Carryover Projects are $0, Ending Reserves are $32,430, and Operating Reserve Percentage is 9.28% Fiscal Year 2005 Revised Total Revenues are 335,972, Total Operating Expenses are $327,415, and Operating Revenues Over Expenses are $8,557. Fiscal Year 2005 Revised Total VTA Enterprise Capital Expenditures are $13,579, Capital Funding is $0, Grants & Other Sources are $3,889, and VTA Enterprise Share, drawn from Reserves is $9,690 Fiscal Year 2005 Revised Beginning Reserves are $65,367, Operating Revenues Over Expenses are $8,557, Total VTA Funds for Capital Program are -$9,690, Net Local Capital Program Savings are $3,225, Additional Grants for Carryover Projects are $0, Ending Reserves are $67,459, and Operating Reserve Percentage is 20.60% Fiscal Year 2006 Adopted Total Revenues are $325,487, Total Operating Expenses are $338,693, and Operating Revenues Under Expenses are -$13,206 Fiscal Year 2006 Adopted Total VTA Enterprise Capital Expenditures are $10,742, Capital Funding is $0, Grants & Other Sources are $1,184, and VTA Enterprise Share, drawn from Reserves is $9,558 Fiscal Year 2006 Adopted Beginning Reserves are $67,459, Operating Revenues Over (under) Expenses are -$13,206, Total VTA Funds for Capital Program are -$9,558, Net Local Capital Program Savings are $0, Additional Grants for Carryover Projects are $4,040, Ending Reserves are $48,735, and Operating Reserve Percentage is 14.39% Fiscal Year 2007 Adopted Total Revenues are $358,857, Total Operating Expenses are $348,657, and the Operating Revenues Over Expenses are $10,200. Fiscal Year 2007 Adopted Total VTA Enterprise Capital Expenditures are $14,957, Capital Funding is $0, Grants & Other Sources are $6,327, and VTA Enterprise Share, drawn from Reserves is $8,630 Fiscal Year 2007 Adopted Beginning Reserves are $48,735, Operating Revenues Over Expenses are $10,200, Total VTA Funds for Capital Program are -$8,630, Net Local Capital Program Savings are $0, Additional Grants for Carryover Projects are $1,513, Ending Reserves are $51,818, and Operating Reserve Percentage is 14.86% Note: Fiscal Year 2005 Approved information is for Revenue and Expenditure comparisons only Executive Summary for Santa Clara Valley Transportation Authority Fiscal year 2006 and fiscal year 2007 Budgets Ridership (In Thousand Trips) Bus: FISCAL YEAR 2004 Actual 32,902, FISCAL YEAR 2005 Adopted Budget 33,651, FISCAL YEAR 2005 Revised Budget 29,800, FISCAL YEAR 2006 Adopted Budget 30,790, and FISCAL YEAR 2007 Adopted Budget 30,810 Light Rail: FISCAL YEAR 2004 Actual 5,473, FISCAL YEAR 2005 Adopted Budget 5,909, FISCAL YEAR 2005 Revised Budget 6,600, FISCAL YEAR 2006 Adopted Budget 7,210, and FISCAL YEAR 2007 Adopted Budget 7,290 Total Ridership: FISCAL YEAR 2004 Actual 38,357, FISCAL YEAR 2005 Adopted Budget 39,560, FISCAL YEAR 2005 Revised Budget 36,400, FISCAL YEAR 2006 Adopted Budget 38,000, and FISCAL YEAR 2007 Adopted Budget 38,100 Service Miles (In Thousand Miles) Bus service miles: FISCAL YEAR 2004 Actual 18,682, FISCAL YEAR 2005 Adopted Budget 18,433, FISCAL YEAR 2005 Revised Budget 18,310, FISCAL YEAR 2006 Adopted Budget 18,758, and FISCAL YEAR 2007 Adopted Budget 18,732 Light Rail Train miles: FISCAL YEAR 2004 Actual 1,464, FISCAL YEAR 2005 Adopted Budget 1,789, FISCAL YEAR 2005 Revised Budget 1,795, FISCAL YEAR 2006 Adopted Budget 2,224, and FISCAL YEAR 2007 Adopted Budget 2,223 Total Service Miles: FISCAL YEAR 2004 Actual 20,146, FISCAL YEAR 2005 Adopted Budget 20,222, FISCAL YEAR 2005 Revised Budget 20,105, FISCAL YEAR 2006 Adopted Budget 20,982, and FISCAL YEAR 2007 Adopted Budget 20,955 Service Hours (In Thousand Hours) Bus Hours: FISCAL YEAR 2004 Actual 1,360, FISCAL YEAR 2005 Adopted Budget 1,352, FISCAL YEAR 2005 Revised Budget 1,349, FISCAL YEAR 2006 Adopted Budget 1,363, and FISCAL YEAR 2007 Adopted Budget 1,361 Light Rail Train Hours: FISCAL YEAR 2004 Actual 99, FISCAL YEAR 2005 Adopted Budget 117, FISCAL YEAR 2005 Revised Budget 117, FISCAL YEAR 2006 Adopted Budget 145, and FISCAL YEAR 2007 Adopted Budget 145 Total Service Hours: FISCAL YEAR 2003-04 Actual 1,459, FISCAL YEAR 2004-05 Adopted Budget 1,469, FISCAL YEAR 2004-05 Revised Budget 1,466, FISCAL YEAR 2005-06 Adopted Budget 1,508, and FISCAL YEAR 2006-07 Adopted Budget 1,506 Revenues (In Thousand Dollars) Total Revenue: FISCAL YEAR 2004 Actual $419,630, FISCAL YEAR 2005 Adopted Budget $354,831, FISCAL YEAR 2005 Revised Budget $335,972, FISCAL YEAR 2006 Adopted Budget $325,487, and FISCAL YEAR 2007 Adopted Budget $358,857 Major Revenue Components Half Cent Sales Tax: FISCAL YEAR 2004 Actual $138,917, FISCAL YEAR 2005 Adopted Budget $139,000, FISCAL YEAR 2005 Revised Budget $142,005, FISCAL YEAR 2006 Adopted Budget $148,865, and FISCAL YEAR 2007 Adopted Budget $156,120 TDA: FISCAL YEAR 2004 Actual $64,993, FISCAL YEAR 2005 Adopted Budget $67,098, FISCAL YEAR 2005 Revised Budget $67,098, FISCAL YEAR 2006 Adopted Budget $71,044, and FISCAL YEAR 2006-07 Adopted Budget $73,376 Fare: FISCAL YEAR 2004 Actual $30,625, FISCAL YEAR 2005 Adopted Budget $34,524, FISCAL YEAR 2005 Revised Budget $32,374, FISCAL YEAR 2006 Adopted Budget $36,732, and FISCAL YEAR 2007 Adopted Budget $36,857 Federal Operating Grants: FISCAL YEAR 2004 Actual $38,143, FISCAL YEAR 2005 Adopted Budget $37,134, FISCAL YEAR 2005 Revised Budget $34,429, FISCAL YEAR 2006 Adopted Budget $33,381, and FISCAL YEAR 2007 Adopted Budget $34,546 EXPENSES (In Thousand Dollars) Total Expense Excluding Contingency: FISCAL YEAR 2004 Actual $385,717, FISCAL YEAR 2005 Adopted Budget $347,574, FISCAL YEAR 2005 Revised Budget $325,705, FISCAL YEAR 2006 Adopted Budget $336,693, and FISCAL YEAR 2007 Adopted Budget $346,657 Major Expense Components are: Wages & Benefits: FISCAL YEAR 2004 Actual $222,722, FISCAL YEAR 2005 Adopted Budget $240,184, FISCAL YEAR 2005 Revised Budget $229,257, FISCAL YEAR 2006 Adopted Budget $238,863, and FISCAL YEAR 2007 Adopted Budget $238,757 ADA: FISCAL YEAR 2004 Actual $26,728, FISCAL YEAR 2005 Adopted Budget $29,533, FISCAL YEAR 2005 Revised Budget $25,837, FISCAL YEAR 2006 Adopted Budget $26,662, and FISCAL YEAR 2007 Adopted Budget $27,446 Debt Service: FISCAL YEAR 2004 Actual $104,199, FISCAL YEAR 2005 Adopted Budget $23,579, FISCAL YEAR 2005 Revised Budget $23,465, FISCAL YEAR 2006 Adopted Budget $23,336, and FISCAL YEAR 2007 Adopted Budget $23,593 Caltrain: FISCAL YEAR 2004 Actual $14,562, FISCAL YEAR 2005 Adopted Budget $15,025, FISCAL YEAR 2005 Revised Budget $15,025, FISCAL YEAR 2006 Adopted Budget $15,479, and FISCAL YEAR 2007 Adopted Budget $15,940 Materials & Supplies: FISCAL YEAR 2004 Actual $9,131, FISCAL YEAR 2005 Adopted Budget $14,978, FISCAL YEAR 2005 Revised Budget $10,975, FISCAL YEAR 2006 Adopted Budget $12,784, and FISCAL YEAR 2007 Adopted Budget $12,925 Security: FISCAL YEAR 2004 Actual $7,687, FISCAL YEAR 2005 Adopted Budget $8,499, FISCAL YEAR 2005 Revised Budget $7,993, FISCAL YEAR 2006 Adopted Budget $7,880, and FISCAL YEAR 2007 Adopted Budget $8,062 Other Services: FISCAL YEAR 2004 Actual $5,381, FISCAL YEAR 2005 Adopted Budget $6,705, FISCAL YEAR 2005 Revised Budget $6,418, FISCAL YEAR 2006 Adopted Budget $7,567, and FISCAL YEAR 2007 Adopted Budget $7,483 Fuel: FISCAL YEAR 2003-04 Actual $6,060, FISCAL YEAR 2004-05 Adopted Budget $8,634, FISCAL YEAR 2004-05 Revised Budget $8,638, FISCAL YEAR 2005-06 Adopted Budget $9,726, and FISCAL YEAR 2006-07 Adopted Budget $9,869 Operating Cost Recovery Ratio: FISCAL YEAR 2004 Actual 14.0%, FISCAL YEAR 2005 Adopted Budget 13.3%, FISCAL YEAR 2005 Revised Budget 13.4%, FISCAL YEAR 2006 Adopted Budget 14.6%, and FISCAL YEAR 2007 Adopted Budget 14.2% Operating cost recovery ratio includes advertising income, whereas farebox recovery ratio does not. Farebox Recovery Ratio: FISCAL YEAR 2004 Actual 13.4%, FISCAL YEAR 2005 Adopted Budget 12.6%, FISCAL YEAR 2005 Revised Budget 12.7%, FISCAL YEAR 2006 Adopted Budget 13.9%, and FISCAL YEAR 2007 Adopted Budget 13.5% Capital Projects Number of Projects: New Projects: FISCAL YEAR 2005 Adopted Budget 12, FISCAL YEAR 2005 Revised Budget 20, FISCAL YEAR 2006 Adopted Budget 20, and FISCAL YEAR 2007 Adopted Budget 1. Augmented Projects: FISCAL YEAR 2005 Adopted Budget 2, FISCAL YEAR 2005 Revised Budget 0,FISCAL YEAR 2006 Adopted Budget 0, and FISCAL YEAR 2007 Adopted Budget 0. Carryover Projects: FISCAL YEAR 2005 Adopted Budget 71, FISCAL YEAR 2005 Revised Budget 60, FISCAL YEAR 2006 Adopted Budget 79, and FISCAL YEAR 2007 Adopted Budget 99. Total number of Projects: FISCAL YEAR 2005 Adopted Budget 85, FISCAL YEAR 2005 Revised Budget 80, FISCAL YEAR 2006 Adopted Budget 99, and FISCAL YEAR 2007 Adopted Budget 100. Gross Project Expenditures (In Thousand Dollars) New Projects: FISCAL YEAR 2005 Adopted Budget $4,008, FISCAL YEAR 2005 Revised Budget $29,565, FISCAL YEAR 2006 Adopted Budget $28,693, and FISCAL YEAR 2007 Adopted Budget $911. Augmented Projects: FISCAL YEAR 2005 Adopted Budget $1000, FISCAL YEAR 2005 Revised Budget $0, FISCAL YEAR 2006 Adopted Budget $0, and FISCAL YEAR 2007 Adopted Budget $0. Carryover Projects: FISCAL YEAR 2005 Adopted Budget $991,022, FISCAL YEAR 2005 Revised Budget $1,160,494, FISCAL YEAR 2006 Adopted Budget $1,190,059, and FISCAL YEAR 2007 Adopted Budget $1,245,641. Total Project Budgets: FISCAL YEAR 2005 Adopted Budget $996,030, FISCAL YEAR 2005 Revised Budget $1,190,059, FISCAL YEAR 2006 Adopted Budget $1,218,751, and FISCAL YEAR 2007 Adopted Budget $1,246,552 The following is a description of the organizational chart for the Santa Clara Transportation Authority: General Manager, Michael T. Burns, and General Counsel, Suzanne Gifford, report to the Board of Directors. General Manager, Michael T. Burns is supported by Board Secretary, Maria Marinos, Administration, Government Affairs Mgr. State & Federal, Kurt Evans, Government Affairs Mgr. Local & Regional, Jim Lawson, Administrative Services, Chief Administrative Officer, Vacant, Construction, Chief Construction Officer, Jack Collins, Development/Congestion Mgmt., Chief Development Officer, Carolyn Gonot, Fiscal Resources, Chief Financial Officer, Roger Contreras, Operations, Chief Operating Officer, Matthew Tucker, and Technology, Chief Technology Officer, George Barlow. Section II OPERATING BUDGET Statement of Revenues & Expenses The following table is the Statement of Revenues and Expenses for Santa Clara Valley Transportation Authority for Fiscal Year 2006 And Fiscal Year 2007 Adopted Budgets. The numbers below are expressed in thousands. Fares: FISCAL YEAR 2004 Actual $30,625, FISCAL YEAR 2005 Budget $34,524, FISCAL YEAR 2005 Revised $32,734, FISCAL YEAR 2006 Adopted Budget $36,732, and FISCAL YEAR 2007 Adopted Budget $36,857 1976 1/2 Cent Sales Tax: FISCALYEAR 2004 Actual $138,917, FISCALYEAR 2005 Budget $139,000, FISCAL YEAR 2005 Revised $142,005, FISCAL YEAR 2006 Adopted Budget $148,865, and FISCAL YEAR 2007 Adopted Budget $156,120. TDA: FISCAL YEAR 2004 Actual $64,993, FISCAL YEAR 2005 Budget $67,098, FISCAL YEAR 2005 Revised $67,098, FISCAL YEAR 2006 Adopted Budget $71,044, and FISCAL YEAR2007 Adopted Budget $73,376 2000 Measure A Sales Tax: FISCAL YEAR 2004 Actual $0, FISCAL YEAR 2005 Budget $0, FISCAL YEAR 2005 Revised $0 FISCAL YEAR 2006 Adopted Budget $6,869, and FISCAL YEAR 2007 Adopted Budget $28,815 This tax revenue represents 18.46 percent of tax for support of operations STA: FISCAL YEAR 2004 Actual $4,417, FISCAL YEAR 2005 Budget $7,537, FISCAL YEAR 2005 Revised $7,537, FISCAL YEAR 2006 Adopted Budget $6,331, and FISCAL YEAR 2007 Adopted Budget $8,112 Federal Operating Grants: FISCAL YEAR 2004 Actual $38,143, FISCAL YEAR 2005 Budget $37,134, FISCAL YEAR 2005 Revised $34,429, FISCAL YEAR 2006 Adopted Budget $33,381, and FISCAL YEAR 2007 Adopted Budget $34,546 State Operating Grants: FISCAL YEAR 2004 Actual $751, FISCAL YEAR 2005 Budget $1,104, FISCAL YEAR 2005 Revised $1,104, FISCAL YEAR 2006 Adopted Budget $1,100, and FISCAL YEAR 2007 Adopted Budget $1,100 Local Operating Assistance: FISCAL YEAR 2004 Actual $3,272, FISCALYEAR 2005 Budget $221, FISCAL YEAR 2005 Revised $500, FISCAL YEAR 2006 Adopted Budget $474, and FISCAL YEAR 2007 Adopted Budget $0 Investment Earnings: FISCAL YEAR 2004 Actual $2,352, FISCAL YEAR 2005 Budget $1,500, FISCAL YEAR 2005 Revised $2,500, FISCAL YEAR 2006 Adopted Budget $2,425, and FISCAL YEAR 2007 Adopted Budget $2,097 Advertising Income: FISCAL YEAR 2004 Actual $1,871, FISCAL YEAR 2005 Budget $1,838, FISCAL YEAR 2005 Revised $1,838, FISCAL YEAR 2006 Adopted Budget $1,921, and FISCAL YEAR 2007 Adopted Budget $1,933 Other Income: FISCAL YEAR 2004 Actual $134,289, FISCAL YEAR 2005 Budget $64,875, FISCAL YEAR 2005 Revised $46,588, FISCAL YEAR 2006 Adopted Budget $16,345, and FISCAL YEAR 2007 Adopted Budget $15,901 Total Revenue: FISCAL YEAR 2004 Actual $419,630, FISCAL YEAR 2005 Budget $354,831, FISCAL YEAR 2005 Revised $335,972, FISCAL YEAR 2006 Adopted Budget $325,487, and FISCAL YEAR 2007 Adopted Budget $358,857 Wages & Benefits: FISCAL YEAR 2004 Actual $222,722, FISCAL YEAR 2005 Budget $240,183, FISCAL YEAR 2005 Revised $229,257, FISCAL YEAR 2006 Adopted Budget $238,863, and FISCAL YEAR 2007 Adopted Budget $238,757 Materials & Supplies: FISCAL YEAR 2004 Actual $9,131, FISCAL YEAR 2005 Budget $14,978, FISCAL YEAR 2005 Revised $10,975, FISCAL YEAR 2006 Adopted Budget $12,784, and FISCAL YEAR 2007 Adopted Budget $12,925 Security: FISCAL YEAR 2004 Actual $7,687, FISCAL YEAR 2005 Budget $8,499, FISCAL YEAR 2005 Revised $7,993, FISCAL YEAR 2006 Adopted Budget $7,880, and FISCAL YEAR 2007 Adopted Budget $8,062 Professional & Special Services: FISCAL YEAR 2004 Actual $3,226, FISCAL YEAR 2005 Budget $5,575, FISCAL YEAR 2005 Revised $5,126, FISCAL YEAR 2006 Adopted Budget $5,807, and FISCAL YEAR 2007 Adopted Budget $4,790 Other Services: FISCAL YEAR 2004 Actual $5,381, FISCAL YEAR 2005 Budget $6,705, FISCAL YEAR 2005 Revised $6,418, FISCAL YEAR 2006 Adopted Budget $7,567, and FISCAL YEAR 2007 Adopted Budget $7,483 Fuel: FISCAL YEAR 2004 Actual $6,060, FISCAL YEAR 2005 Budget $8,634, FISCAL YEAR 2005 Revised $8,638, FISCAL YEAR 2006 Adopted Budget $9,726, and FISCAL YEAR 2007 Adopted Budget $9,869 Traction Power: FISCAL YEAR 2004 Actual $2,152, FISCAL YEAR 2005 Budget $3,949, FISCAL YEAR 2005 Revised $3,074, FISCAL YEAR 2006 Adopted Budget $3,441, and FISCAL YEAR 2007 Adopted Budget $3,441 Tires: FISCAL YEAR 2004 Actual $963, FISCAL YEAR 2005 Budget $1,038, FISCAL YEAR 2005 Revised $1,004, FISCAL YEAR 2006 Adopted Budget $1,050, and FISCAL YEAR 2007 Adopted Budget $1,105 Utilities: FISCAL YEAR 2004 Actual $2,013, FISCAL YEAR 2005 Budget $2,538, FISCAL YEAR 2005 Revised $2,383, FISCAL YEAR 2006 Adopted Budget $2,321, and FISCAL YEAR 2007 Adopted Budget $2,373 Insurance: FISCAL YEAR 2004 Actual $3,413, FISCAL YEAR 2005 Budget $3,821, FISCAL YEAR 2005 Revised $3,821, FISCAL YEAR 2006 Adopted Budget $3,899, and FISCAL YEAR 2007 Adopted Budget $4,194 Data Processing: FISCAL YEAR 2004 Actual $2,221, FISCAL YEAR 2005 Budget $2,726, FISCAL YEAR 2005 Revised $2,600, FISCAL YEAR 2006 Adopted Budget $2,708, and FISCAL YEAR 2007 Adopted Budget $2,652 Office Expense: FISCAL YEAR 2004 Actual $383, FISCAL YEAR 2005 Budget $630, FISCAL YEAR 2005 Revised $471, FISCAL YEAR 2006 Adopted Budget $422, and FISCAL YEAR 2007 Adopted Budget $422 Communications: FISCAL YEAR 2004 Actual $899, FISCAL YEAR 2005 Budget $1,611, FISCAL YEAR 2005 Revised $1,363, FISCAL YEAR 2006 Adopted Budget $1,138, and FISCAL YEAR 2007 Adopted Budget $1,208 Employee Related Expense: FISCAL YEAR 2004 Actual $458, FISCAL YEAR 2005 Budget $1,150, FISCAL YEAR 2005 Revised $967, FISCAL YEAR 2006 Adopted Budget $1,017, and FISCAL YEAR 2007 Adopted Budget $1,011 Leases & Rents: FISCAL YEAR 2004 Actual $551, FISCAL YEAR 2005 Budget $653, FISCAL YEAR 2005 Revised $632, FISCAL YEAR 2006 Adopted Budget $638, and FISCAL YEAR 2007 Adopted Budget $654 Miscellaneous: FISCAL YEAR 2004 Actual $972, FISCAL YEAR 2005 Budget $1,441, FISCAL YEAR 2005 Revised $1,306, FISCAL YEAR 2006 Adopted Budget $1,258, and FISCAL YEAR 2007 Adopted Budget $1,265 Reimbursements: FISCAL YEAR 2004 Actual -$33,855, FISCAL YEAR 2005 Budget -$31,210, FISCAL YEAR 2005 Revised -$30,651, FISCAL YEAR 2006 Adopted Budget -$35,710, and FISCAL YEAR 2007, Adopted Budget -$26,886 Operating Expense: FISCAL YEAR 2004 Actual $234,377, FISCAL YEAR 2005 Budget $272,921, FISCAL YEAR 2005 Revised $255,379, FISCAL YEAR 2006 Adopted Budget $264,807, and FISCAL YEAR 2007 Adopted Budget $273,326 ADA: FISCAL YEAR 2004 Actual $26,728, FISCAL YEAR 2005 Budget $29,533, FISCAL YEAR 2005 Revised $25,837, FISCAL YEAR 2006 Adopted Budget $26,662, and FISCAL YEAR 2007 Adopted Budget $27,446. Note: The amounts include allocation of VTA Support Staff. Caltrain: FISCAL YEAR 2004 Actual $14,562, FISCAL YEAR 2005 Budget $15,025, FISCAL YEAR 2005 Revised $15,025, FISCAL YEAR 2006 Adopted Budget $15,479, and FISCAL YEAR 2007 Adopted Budget $15,940 Note: The amounts include allocation of VTA Support Staff. Light Rail Shuttles: FISCAL YEAR 2004 Actual $824, FISCAL YEAR 2005 Budget $955, FISCAL YEAR 2005 Revised $955, FISCAL YEAR 2006 Adopted Budget $906, and FISCAL YEAR 2007 Adopted Budget $927 Note: The amounts include allocation of VTA Support Staff. Altamont Commuter Express: FISCAL YEAR 2004 Actual $3,635, FISCAL YEAR 2005 Budget $3,912, FISCAL YEAR 2005 Revised $3,712, FISCAL YEAR 2006 Adopted Budget $3,842, and FISCAL YEAR 2007 Adopted Budget $3,952. Note: The amounts include allocation of VTA Support Staff. Highway 17 Express: FISCAL YEAR 2004 Actual $345, FISCAL YEAR 2005 Budget $415, FISCAL YEAR 2005 Revised $415, FISCAL YEAR 2006 Adopted Budget $427, and FISCAL YEAR 2007 Adopted Budget $443. Note: The amounts include allocation of VTA Support Staff. Dumbarton Express: FISCAL YEAR 2004 Actual $384, FISCAL YEAR 2005 Budget $390, FISCAL YEAR 2005 Revised $390, FISCAL YEAR 2006 Adopted Budget $449, and FISCAL YEAR 2007 Adopted Budget $413. Note: The amounts include allocation of VTA Support Staff. Contribution to Other Agencies: FISCAL YEAR 2004 Actual $523, FISCAL YEAR 2005 Budget $470, FISCAL YEAR 2005 Revised $510, FISCAL YEAR 2006 Adopted Budget $567, and FISCAL YEAR 2007 Adopted Budget $597. Debt Service: FISCAL YEAR 2004 Actual $104,199, FISCAL YEAR 2005 Budget $23,579, FISCAL YEAR 2005 Revised $23,465, FISCAL YEAR 2006 Adopted Budget $23,336, and FISCAL YEAR 2007 Adopted Budget $23,593. Other Expense: FISCAL YEAR 2004 Actual $139, FISCAL YEAR 2005 Budget $373, FISCAL YEAR 2005 Revised $16, FISCAL YEAR 2006 Adopted Budget $219, and FISCAL YEAR 2007 Adopted Budget $20. Other Expense: FISCAL YEAR 2004 Actual $151,340, FISCAL YEAR 2005 Budget $74,653, FISCAL YEAR 2005 Revised $70,326, FISCAL YEAR 2006 Adopted Budget $71,886, and FISCAL YEAR 2007 Adopted Budget $73,331. Total Expense: FISCAL YEAR 2004 Actual $385,717, FISCAL YEAR 2005 Budget $347,574, FISCAL YEAR 2005 Revised $325,705, FISCAL YEAR 2006 Adopted Budget $336,693, and FISCAL YEAR 2007 Adopted Budget $346,657. Contingency: FISCAL YEAR 2004 Actual $0, FISCAL YEAR 2005 Budget $2,000, FISCAL YEAR 2005 Revised $1,710, FISCAL YEAR 2006 Adopted Budget $2,000, and FISCAL YEAR 2007 Adopted Budget $2,000. Surplus (Deficit) to Reserves: FISCAL YEAR 2004 Actual $33,913, FISCAL YEAR 2005 Budget $5,257, FISCAL YEAR 2005 Revised $8,557, FISCAL YEAR 2006 Adopted Budget -$13,206, and FISCAL YEAR 2007 Adopted Budget $10,200 Section II OPERATING BUDGET Summary of Budget Assumptions SUMMARY OF BUDGET ASSUMPTIONS The FY2006 and FY2007 Santa Clara Valley Transportation Authority ("VTA") Operating Budget presented here is significantly improved from the tenor of the budget we presented two years ago. At that time, sales tax revenue was still experiencing a historic decline, forcing VTA to rapidly consume its accumulated reserves. In response to this financial crisis, VTA embarked upon a series of actions designed to reduce costs, enhance revenues, and implement efficiencies. These actions included both service and staff reductions, labor contract revisions, two fare increases, reducing or eliminating capital projects, reorganizing major programs and functions, and generally tightening our belt throughout the entire organization. These actions allowed VTA to keep from implementing a possible 21% service reduction and to do it without the need of bonding up to $80 million against future Measure A sales tax revenues. While these measures have had an impact upon our customers, our employees, and the community, these same measures have enabled VTA to stabilize operations and prevent the severe reductions that were being considered two years ago. We have even begun replenishing our cash reserves. This budget continues to strive for efficiencies while minimizing impacts upon our customers. This is evidenced in the fact that although the proposed overall operating budget for both FY2006 and FY2007 has been reduced from the level of the FY2005 Budget adopted by the Board last June, the level of service provided will increase. This service level increases slightly for bus and significantly for light rail. The increase, both in service miles and hours, includes the opening of the Vasona Corridor Light Rail line and the implementation of Community Buses. We will submit periodic budget reviews and updates during the course of this two-year budget. These reviews will provide the Board and the public with an opportunity to evaluate VTA's actual performance after several months of operations. In addition, it presents a forum for VTA management to report to the Board any major differences between budgetary assumptions and actual results that have been occurred since the budget adoption and to request resource reallocations that are warranted due to changes caused by both internal and external factors. REVENUES Ridership and Fares Santa Clara County's economic recession during the first years of this decade created a multi-faceted problem for VTA, especially in the area of ridership and fares. The dramatic downturn in the economy not only reduced sales tax revenues needed to support operations, but the staggering drop in employment also resulted in a decline in ridership. This ridership decrease, in turn, led to a correlating decrease in fare revenue. The Board authorized two fare increases, the last one implemented in January of this year, in order to compensate for falling revenues and address our operating deficits. Another goal of these actions was to increase the percentage of operating costs paid by patrons and the average fare revenue per boarding. Fare increases generally result in an initial ridership loss, followed by a gradual return over the following months. Although every situation is unique, it is generally observed that lost patronage after a fare increase typically returns in the first six months. This budget assumes such a recovery following the January 2005 fare increase. In conjunction with the opening of the Vasona light rail line in the summer of 2005 and a continuing improvement in the overall economy, this budget projects an annual increase of 1.6 million riders in FY2006 from the most current FY2005 ridership estimates. The VTA Fare Policy established a process for fare review to be conducted in conjunction with the development of a biennial budget. Included in the policy is a farebox recovery target along with a January implementation date for any necessary fare increases. It is VTA's primary goal to achieve the farebox recovery target through increased ridership and lower operating costs. A fare increase will be an option only if these factors do not yield the intended goal. This budget proposes no fare increases in FY2006 or FY2007. Eco Pass, Residential Eco Pass and San Jose State University's Transit Access Program continue to be popular with employers, residential communities and students. Currently the VTA Eco pass program includes 130,000 employees, residents and students in the area. These riders and revenues are included in the calculation of the revenues per boarding. The table below shows ridership and Fare Revenue from Fiscal Year 2004 to estimates for Fiscal Year 2007. The numbers are in thousands. Bus ridership: FISCAL YEAR 2004 Actual: 32,902, FISCAL YEAR 2005 Adopted Budget 33,651, FISCAL YEAR 2005 Revised Budget 29,800, FISCAL YEAR 2006 Adopted Budget 30,790, and FISCAL YEAR 2007 Adopted Budget 30,810 Percent Change: FISCAL YEAR 2005 Adopted Budget 2.3%, FISCAL YEAR 2005 Revised Budget -11.4%, FISCAL YEAR 2006 Adopted Budget 3.3%, and FISCAL YEAR 2007 Adopted Budget 0.1% Light Rail Ridership: FISCAL YEAR 2004 Actual: 5,473, FISCAL YEAR 2005 Adopted Budget 5,909, FISCAL YEAR 2005 Revised Budget 6,600, FISCAL YEAR 2006 Adopted Budget 7,210, and FISCAL YEAR 2007 Adopted Budget 7,290 Percent Change: FISCAL YEAR 2005 Adopted Budget 8.0%, FISCAL YEAR 2005 Revised Budget 11.7%, FISCAL YEAR 2006 Adopted Budget 9.2%, and FISCAL YEAR 2007 Adopted Budget 1.1% Total Ridership: FISCAL YEAR 2004 Actual: 38,375, FISCAL YEAR 2005 Adopted Budget 39,560, FISCAL YEAR 2005 Revised Budget 36,400, FISCAL YEAR 2006 Adopted Budget 38,000, and FISCAL YEAR 2007 Adopted Budget 38,100 Percent Change: FISCAL YEAR 2005 Adopted Budget 3.1%, FISCAL YEAR 2005 Revised Budget -8.0%, FISCAL YEAR 2006 Adopted Budget 4.4%, and FISCAL YEAR 2007 Adopted Budget 0.3% Total Fare Revenue: FISCAL YEAR 2004 Actual: $30,625, FISCAL YEAR 2005 Adopted Budget $34,524, FISCAL YEAR 2005 Revised Budget $32,374 FISCAL YEAR 2006 Adopted Budget $36,732, and FISCAL YEAR 2007 Adopted Budget $36,857 Percent Change: FISCAL YEAR 2005 Adopted Budget 12.7%, FISCAL YEAR 2005 Revised Budget -6.2%, FISCAL YEAR 2006 Adopted Budget 13.5%, and FISCAL YEAR 2007 Adopted Budget 0.3% Average Fare Per Boarding: FISCAL YEAR 2004 Actual: $0.80, FISCAL YEAR 2005 Adopted Budget $0.87, FISCAL YEAR 2005 Revised Budget $0.89, FISCAL YEAR 2006 Adopted Budget $0.97, and FISCAL YEAR 2007 Adopted Budget $0.97 Percent Change: FISCAL YEAR 2005 Adopted Budget 9.4%, FISCAL YEAR 2005 Revised Budget 1.9%, FISCAL YEAR 2006 Adopted Budget 8.7%, and FISCAL YEAR 2007 Adopted Budget 0.1% SALES TAX-BASED REVENUES The 1976 half-cent local sales tax and a quarter-cent state sales tax (also known as the Transportation Development Act or TDA) have historically been the two most important income sources to VTA. Beginning in April of 2006, VTA will also be receiving a portion of revenue generated by the 2000 Measure A sales tax for use towards operations. The majority of VTA's proposed operating revenues are generated from these sales tax measures. The proceeds from these sales taxes are driven by the local economy. The quarter-cent sales tax is derived from the same tax base as the half-cent sales tax but it is collected by the State. The proceeds are administered and allocated by the Metropolitan Transportation Commission (MTC). The cash flow fluctuates differently from the half-cent tax because the annual receipts are based on forecasts, which are adjusted in subsequent years for over-funding or under-funding in prior years. 1976 1/2 Cent Sales Tax Santa Clara County is slowly emerging from the low ebb of the recession as evidenced by the actual sales tax revenue VTA received in FY2004. The FY2004 receipts represent the first year-to-year increase since FY2001. Current projections for FY2005 reflect a conservatively estimated increase of approximately $3.1 million over FY2004. This estimate represents the midpoint between the conservative and moderate projections provided by the Center for Continuing Study of the California Economy (CCSCE). We believe that CCSCE's projections are reasonable estimates based on the expected growth of the Bay Area. As a result, this budget includes projected sales tax revenues for FY2006 and FY2007 of $148.9 million and $156.1 million, respectively, representing continuing stable growth of 4.83% in FY2006 and 4.87% in FY2007. TDA Transportation Development Act funds (TDA) are derived from a quarter cent sales tax levied by the State on taxable transactions occurring in Santa Clara County. The Metropolitan Transportation Commission (MTC) retains a portion of these funds, and approximately 96% is returned to source (i.e., Santa Clara County). At this time, VTA is conservatively estimating TDA funds available to VTA in FY2006 at $71 million, a 6% increase over the $67 million that was available in FY2005. Preliminary estimates from MTC indicate that VTA's TDA funds will increase by 3.5% to $73.4 million in FY2007. 2000 Measure A Sales Tax On November 7, 2000, Santa Clara County voters overwhelmingly approved Measure A, which enacted a half-cent sales tax to be collected beginning April 1, 2006 and continuing for a period of 30 years. This revenue may be used to finance the transit projects and operations specified in the 2000 Measure A and listed in VTA's Valley Transportation Plan and Expenditure Program (VTP 2030). VTP2030 allocated 18.457% of the sales tax revenue towards funding VTA operations. Using that allocation, this budget estimates revenue of $6.9 million in FY2006, representing the first three months of revenue collection during the final quarter of the fiscal year, and $28.8 million in FY2007, which represents the first full fiscal year of revenue. STA State Transit Assistance funds (STA) are derived from the State sales tax on gasoline and diesel fuel. STA apportionments are made to regional transportation planning agencies (MTC in the Bay Area Region) based on a formula that allocates 50% of the funds according to population and 50% according to the operator's revenues in the region from the prior fiscal year. The Bay Area Region will receive about 36.6% of the total STA estimated to be available statewide in FY2006. According to MTC's most recent fund estimate (MTC Resolution 3686), STA is estimated at $6.3 million for VTA in FY2006, a 17% decrease from the $7.5 million received in FY2005. Preliminary estimates from MTC indicate that STA is projected to increase to $8.1 million in FY2007. FEDERAL OPERATING GRANTS The federal operating grants budgeted in FY2006 and FY2007 are provided by Federal Transit Administration (FTA) Section 5307 Urbanized Area Formula grant funds for Preventive Maintenance. Although the FTA Section 5307 program is designed primarily to fund capital acquisitions, funds can also be awarded for preventive maintenance activities. Currently, we treat all bus maintenance costs for revenue and non-revenue vehicles as eligible expenditure. Prior to the economic downtown, VTA utilized small amounts of Preventive Maintenance (approximately $8 to 10 million annually) to accelerate cash flow and free-up local funding to underwrite capital funding. However, as the recession hit, sales tax revenues declined and economic conditions worsened. In response to these declining revenues, in FY2002 VTA began to maximize the use of Preventive Maintenance as a bridging strategy to reduce operating deficits. As a result, some of VTA's planned capital replacement projects were deferred because grants that are normally used to replace and refurbish capital assets were used to support the operating budget. In FY2006 and FY2007, VTA will continue its strategy to maximize the use of preventive maintenance to reduce operating deficits, leaving few Federal funds available for capital projects over the two-year period. This strategy requires that VTA continually prioritize its capital program so that critical capital needs, vital to ensure the long-term health of the infrastructure, are met. We have estimated that VTA will receive $33.0 million in Section 5307 Preventive Maintenance in FY2006. In FY2007, we project a slight increase to $34.2 million. STATE OPERATING GRANTS The State operating grants in FY2006 and FY2007 are from the AB 434 Program (Transportation Fund for Clean Air Program). AB 434 funds became available when vehicle registration fees increased by $4 in the Bay Area to fund projects and programs that help reduce vehicle emissions. VTA will utilize these funds for Light Rail Shuttle operating costs. We anticipate that funds received from this program will remain constant at $1.1 million in FY2006 and $1.1 million in FY2007, the same amount as the FY2005 Revised Budget Estimate. INVESTMENT EARNINGS The investment earnings are derived from two primary sources. The first source are funds, invested short-term, that have been earmarked to underwrite operating deficits. A money manager whose performance is evaluated by comparing actual results against the Institutional Money Market benchmark invests these funds. The estimated earnings rate for FY2006 is 2.5% and for FY2007 is 2.75%. The second source of earnings for the Enterprise Fund are from funds which relate to long-term liabilities for which VTA has set aside and restricted assets, (e.g., accrued vacation and sick leaves.). These funds are invested by a money manager whose performance is evaluated by comparing actual results against the Lehman Brothers U.S. Government Intermediate Bond Benchmark.these funds. The estimated earnings rate for FY2006 is 3.5% and for FY2007 is 3.75%. The estimated composite average of rates of return are 3.0% for FY2006 and 3.0% for FY2007 resulting in estimated earnings of $2.4 million for FY2006 and $2.1 million for FY2007. ADVERTISING INCOME Advertising income is comprised of two components: advertising on buses and light rail vehicles, and bus shelter advertising. Advertising revenue for bus and light rail vehicles is projected at the minimum annual guaranteed amount of $1.5 million. We are budgeting $421,000 in FY2006 and $433,000 in FY2007 for bus shelter advertising income. OTHER INCOME Measure A Repayment Obligation The Measure A Repayment Obligation represents redirected 2000 Measure A Sales Tax Revenue, which was previously earmarked for the purchase of 70 low floor light rail vehicles. The redirected funds are intended to make VTA's Enterprise Fund whole for debt service payments incurred because of advancing the acquisition of the low floor light rail vehicles included in 2000 Measure A. Since 2000 Measure A Sales Tax Revenues do not begin actual collection until April 1, 2006, VTA has been using bond proceeds (payable from Measure A) to fund the Repayment Obligation. This budget includes $14.5 million and $14.0 million of Repayment Obligation revenue in FY2006 and FY2007, respectively. Of the total $28.5 million, approximately $23.0 million is projected to come from actual Measure A sales taxes, which VTA is scheduled to start receiving in FY2006. Property Rental VTA generates rental income from 21 properties held throughout the County. During FY2006 and FY2007, these properties are expected to generate approximately $1.0 million of rental income in each fiscal year. EXPENSES Service Levels The service miles and hours in the table below reflect the impacts of the 9% service reduction in April 2003 (FY2003) and the 3% service reduction in January 2004 (FY2004). Also reflected are the increases in service miles and hours due to the inauguration of service on the Tasman East and Capitol light rail lines in July 2004 (FY2005). The following table shows VTA's service level, and the numbers are expressed in thousands: Services Miles Bus: Fiscal Year 2004 Actual 18,682, Fiscal Year 2005 Adopted Budget 18,433, Fiscal Year 2005 Revised Budget 18,310, Fiscal Year 2006 Adopted Budget 18,758, and Fiscal Year 2007 Adopted Budget 18,732 Light Rail Train: Fiscal Year 2004 Actual 1,464, Fiscal Year 2005 Adopted Budget 1,789, Fiscal Year 2005 Revised Budget 1,795, Fiscal Year 2006 Adopted Budget 2,224, and Fiscal Year 2007 Adopted Budget 2,223 Total Service Miles: Fiscal Year 2004 Actual 20,146, Fiscal Year 2005 Adopted Budget 20,222, Fiscal Year 2005 Revised Budget 20,105, Fiscal Year 2006 Adopted Budget 20,982, and Fiscal Year 2007 Adopted Budget 20,955 Percent change: Fiscal Year 2005 Adopted Budget 0.4 percent, Fiscal Year 2005 Revised Budget -0.6 percent, Fiscal Year 2006 Adopted Budget 3.8 percent, and Fiscal Year 2007 Adopted Budget -0.1 percent Light Rail Car Miles: Fiscal Year 2004 Actual 2,018, Fiscal Year 2005 Adopted Budget 2,692, Fiscal Year 2005 Revised Budget 2,637, Fiscal Year 2006 Adopted Budget 3,066, and Fiscal Year 2007 Adopted Budget 3,061 Percent change: Fiscal Year 2005 Adopted Budget 33.4 percent, Fiscal Year 2005 Revised Budget -2.0 percent, Fiscal Year 2006 Adopted Budget 13.9 percent, and Fiscal Year 2007 Adopted Budget -0.2 percent Service Hours (in thousands) Bus: Fiscal Year 2004 Actual 1,360, Fiscal Year 2005 Adopted Budget 1,352, Fiscal Year 2005 Revised Budget 1,349, Fiscal Year 2006 Adopted Budget 1,363, and Fiscal Year 2007 Adopted Budget 1,361 Light Rail Train: Fiscal Year 2004 Actual 99, Fiscal Year 2005 Adopted Budget 117, Fiscal Year 2005 Revised Budget 117, Fiscal Year 2006 Adopted Budget 145, and Fiscal Year 2007 Adopted Budget 145 Total Services Hours: Fiscal Year 2004 Actual 1,459, Fiscal Year 2005 Adopted Budget 1,469, Fiscal Year 2005 Revised Budget 1,466, Fiscal Year 2006 Adopted Budget 1,508, and Fiscal Year 2007 Adopted Budget 1,506 Percent change: Fiscal Year 2005 Adopted Budget 0.7 percent, Fiscal Year 2005 Revised Budget -0.2 percent, Fiscal Year 2006 Adopted Budget 2.7 percent, and Fiscal Year 2007 Adopted Budget -0.1 percent Light Rail Car Hours: Fiscal Year 2004 Actual 133, Fiscal Year 2005 Adopted Budget 181, Fiscal Year 2005 Revised Budget 168, Fiscal Year 2006 Adopted Budget 195, and Fiscal Year 2007 Adopted Budget 195 Percent change: Fiscal Year 2005 Adopted Budget 36.1 percent, Fiscal Year 2005 Revised Budget -7.2 percent, Fiscal Year 2006 Adopted Budget 7.7 percent, and Fiscal Year 2007 Adopted Budget no change. The Vasona light rail line, a 5.3-mile extension with 8 new stations, will become operational in July 2005 (FY2006). Light rail service is anticipated to increase in July 2005, adding approximately 425,000 service miles and 28,000 service hours. Combined bus and light rail service miles and combined bus and light rail service hours will increase 3.8% and 2.7% respectively in FY2006. Wages & Benefits The following table shows the VTA Wages and Benefit amount and the benefit rates, and the amounts are in thousands. Total Wages and Benefits: fiscal year 2004 Actual $222,722, fiscal year 2005 Adopted Budget $240,184, fiscal year 2005 Revised Budget $229,257, fiscal year 2006 Adopted Budget $238,863, and fiscal year 2007 Adopted Budget $238,757 Benefit Rates: ATU: Fiscal Year 2004 Actual 63.4%, Fiscal Year 2005 Adopted Budget 74%, Fiscal Year 2005 Revised Budget 71.5%, Fiscal Year 2006 Adopted Budget 73.1%, and Fiscal Year 2007 Adopted Budget 74.8% Non-ATU: Fiscal Year 2004 Actual 53.5%, Fiscal Year 2005 Adopted Budget 59.1%, Fiscal Year 2005 Revised Budget 56.6%, Fiscal Year 2006 Adopted Budget 58.8%, and Fiscal Year 2007 Adopted Budget 60.5% The Adopted Budget assumes all currently negotiated and in force contract provisions for wages and benefits. It reflects provisions for step increases for all employees who are in pay progression. It also includes salary provisions for settlement of new labor contracts scheduled to expire during these budget cycles. The benefit cost increases are driven by health care costs, pension costs and workers' compensation costs. Inflation Rate During the late 1990's and early 2000's, the Bay Area was the fastest growth region in the nation and the prosperity drove the cost of living higher than the rest of the nation. This trend reversed in mid-2002 when the inflation rate for the Bay Area, which excludes real estate, reached a low of 0.2% in February 2004, while the national average was 1.7%. Since then, both indexes have started to climb as a result of economic recovery. Despite the severe recession that Santa Clara County has experienced, our county remains a strong center of growth and one of the most attractive places to live. It is expected that the inflation rate in Santa Clara County will again surpass the state and the nation once its economy returns to normal. California Department of Finance projects a 2.6% increase in CPI for Santa Clara County in FY2006. We believe that inflation will remain stable and low in the foreseeable future and project an inflation rate of 3.0% for FY2007. Contingency In order to maintain a more efficient budgeting process, an individual division does not budget for contingency within its own budget. An organization-wide contingency fund is established within the Office of the General Manager to fund urgent and unexpected programs or projects. During development of the FY1998 Budget, the Administration and Finance Committee recommended that VTA's budget policy should include the establishment of a contingency fund (i.e., the General Manager's unallocated fund) at 3.0% of the operating budget. Most of the fund has been used to fund new capital projects. However, due to the current financial situation, we do not believe that we will launch any non-critical new capital projects and new programs during this new two-year budget. Consequently, we should need only $2.0 million per year for contingency purposes in FY2006 and FY2007, as has been budgeted the past two years. We will re-institute the 3% policy once our financial conditions improve. Reimbursements Reimbursements are primarily used to accumulate program and capitalized labor costs for purposes of comprehensive cost monitoring and grant billing purposes. The reimbursement budgets were developed based on two factors: A detailed position-level allocation of anticipated labor distribution throughout the organization. A projection of all non-labor capital activities that would be subject to a reimbursement calculation. This budget recommends $35.7 million for total reimbursements in FY2006 and $26.9 million in FY2007. The major reason for the increase in reimbursements in FY2006 from previous years is that, from an accounting perspective, VTA is moving the Congestion Management Program staff into the Transit Enterprise Fund. As staff work on Congestion Management Program activities, they will then charge that program. This will result in a reimbursement to the Transit Enterprise Fund. There should be no additional net costs generated by this accounting change. Another factor in the increase is that VTA is embarking upon a more thorough review of staff time in an effort to allocate all eligible costs to reimbursable activities. The decrease in reimbursements in FY2007 is a direct reflection of the reduction in size of the overall Capital Program, primarily due to the completion of the 1996 Measure B Transportation Improvement Program. ADA Paratransit Paratransit ridership is projected to decline by 3.0% in FY2005 compared to FY2004 actual; and the program cost is projected to decrease by 3.3% for the same period, which translates to a reduction of approximately $0.9 million in FY2005. Ridership in FY2006 is expected to increase, however, by 1.7%, with costs increasing by 3.2 % due to a contractually obligated paratransit vendor rate increase. The ridership decline and the substantial reduction in expenditures are primarily due to the implementation of various cost-containment strategies, which were developed as part of the four-phased Paratransit Service Business Practices Improvement Plan. During FY2003, a portion of the plan was implemented which included strategies to reduce program costs by improving operational efficiencies, consolidating vendor operations and renegotiating vendor contracts, reducing broker costs and raising revenues. Additional components of the plan were implemented at the beginning of FY2004 and were designed to control demand through an improved eligibility certification process and better alignment of paratransit services with ADA requirements. The table below shows the ADA Trips and Cost in thousands ADA Trips: Fiscal Year 2004 Actual 931, Fiscal Year 2005 Adopted Budget 990, Fiscal Year 2005 Revised Budget 903, Fiscal Year 2006 Adopted Budget 918, Fiscal Year 2007 Adopted Budget 944 Percent Change: FISCAL YEAR2005 Adopted Budget 6.3%, Fiscal Year 2005 Revised Budget -8.8%, Fiscal Year 2006 Adopted Budget 1.7%, Fiscal Year 2007 Adopted Budget 2.8% ADA Operating Expense: FISCAL YEAR2004 Actual $29,728, FISCAL YEAR2005 Adopted Budget $29,533, FISCAL YEAR2005 Revised Budget $25,837, FISCAL YEAR2006 Adopted Budget $26,662, FISCAL YEAR2007 Adopted Budget $27,446 Percent Change: FISCAL YEAR2005 Adopted Budget 10.5%, FISCAL YEAR2005 Revised Budget -12.5%, FISCAL YEAR2006 Adopted Budget 3.2%, FISCAL YEAR2007 Adopted Budget 2.9% Net Cost Per Trip: FISCAL YEAR2004 Actual $28.71, FISCAL YEAR2005 Adopted Budget $29.83, FISCAL YEAR2005 Revised Budget $28.61, FISCAL YEAR2006 Adopted Budget $29.04, FISCAL YEAR2007 Adopted Budget $29.07 Percent Change: FISCAL YEAR 2005 Adopted Budget 3.9%, FISCAL YEAR2005 Revised Budget -4.1%, FISCAL YEAR2006 Adopted Budget 1.5%, FISCAL YEAR2007 Adopted Budget 0.1% In March 2005, a revised Paratransit eligibility program was adopted. The revised eligibility program will be implemented in Spring 2005. The revisions to the eligibility program are intended to ease the paratransit application process in response to community comment while maintaining program cost controls through adherence to ADA regulatory specifications concerning eligibility for paratransit service. Peninsula Corridor Joint Powers Board (PCJPB aka Caltrain) Over the past two years, the Peninsula Corridor Joint Powers Board ("PCJPB" aka "Caltrain") has used one-time funds and reserves to balance its budget. During this time, each of the three PCJPB parties - San Francisco (Muni), San Mateo County Transit District (SamTrans) and VTA - have kept their subsidies at essentially flat levels, or, as in the case of VTA, increased by a CPI escalator. At this writing, Caltrain projects a $13 million deficit in FY2006. At their March 3, 2005 meeting, the PCJPB took actions to start to address this deficit. They set a public hearing for April 7, 2005 in order to declare a fiscal emergency under the California Public Resources Code and California Environmental Quality Act (CEQA) guidelines. They also set another public hearing for the same date to hear public comments on proposed Caltrain fare and service changes that could be implemented to address the budget deficit. VTA's current contribution to Caltrain is 40% of the net operating expenses, based on a ridership formula included in the Joint Powers Agreement. VTA's FY2006 budget for Caltrain is proposed at $15.5 million. This is a 3% increase over the amount VTA provided in FY2005. The FY2007 is then escalated another 3% to $15.9 million. These numbers include VTA's allocated labor cost for the Caltrain program. The amounts VTA will provide to Caltrain are $14.8 million in FY2006 and $15.3 million in FY2007. VTA's proposed budget includes $2.7 million of local funds in FY2006 and $2.2 million of local funds in FY2007 to support Caltrain's FY2007 Capital Budget. The local capital funds that Caltrain receives from VTA and the other two funding partners are used to match state and federal grant funds that are provided to Caltrain. Most Caltrain capital projects are funded with a combination of federal and local funds, and the costs are split equally by the three member agencies. A complete list of Caltrain capital projects will be included in the Caltrain Capital Budget for FY2006 and FY2007. As of this writing, Caltrain has yet to approve its FY2006 Operating and Capital budget. Altamont Commuter Express (ACE) In June 2003, VTA entered into a Cooperative Services Agreement with the Alameda County Congestion Management Agency and the San Joaquin Regional Rail Commission for the provision of ACE services. This agreement replaced the expiring ACE Joint Powers Agreement and provided VTA a cap on its ACE financial commitment, while providing the San Joaquin Regional Rail Commission the ability to increase the service and the institutional control that they desire. The San Joaquin Regional Rail Commission has yet to approve the FY2006 ACE Operating and Capital budget. However, under the new Cooperative Agreement, VTA's share for ACE is to be the FY2003 share adjusted each year by the CPI. VTA's proposed FY2006 budget for ACE includes $2.5 million for the direct train-operating subsidy. The FY2007 direct train-operating subsidy is escalated by 3% to $2.6 million. These amounts also fund ACE's use of the San Jose Diridon and Santa Clara Stations. The budget also includes $1.1 million in FY2006 and $1.1 million in FY2007 for providing ACE shuttles in Santa Clara County. This activity is reimbursable from outside sources including ACE, Transportation Fund for Clean Air grants and employer matches for certain shuttles. VTA staff manages this program and contracts with a private carrier to provide the service on ACE's behalf. The allocated costs of VTA support to the overall ACE program are $242,000 in FY2006 and $247,000 in FY2007. VTA has included no local funds in FY2006 or FY2007 to support ACE capital projects. This is in conformance with the terms of the Cooperative Agreement. Section III OPERATING BUDGET By DIVISION Major Accomplishments FY2004 & FY2005 MAJOR ACCOMPLISHMENTS ADMINISTRATIVE SERVICES DIVISION Technology: Established a Technology Steering Committee and Technology Working Group comprised of senior management from across the enterprise. This management structure enables VTA to plan, prioritize and monitor existing and future technology programs. Development of Technology Strategic Plan and 5-year Technology Capital Investment Plan. Restructured Department to enhance service delivery strategy to better leverage the Department's resources and thereby produced staffing cost savings by approximately $1.2 million annually. Implemented Backup Recovery Center where major system data can be quickly recovered in the event of a disaster or other problem. Installed closed circuit surveillance systems for Tasman East elevators, Chynoweth light rail station, and Eastridge transit center. In conjunction with the Metropolitan Transportation Commission (MTC), successfully deployed Santa Clara county's portion of the 511 website for customers to plan routes via the web and developed the process used to update information for MTC's online trip planner system. Implemented Tsunami Aid payroll deductions for VTA employees to easily provide help for victims. Employee Relations: Completed contract negotiations with Amalgamated Transit Union (ATU) and the Transportation Authority Engineers and Architects' Association (TAEA). Reduced the number of Equal Employment Opportunity (EEO) complaints by nearly 50%. Employee Services: Implemented Kaiser $5/$5/$50 plan for Non-Represented, Service Workers Local 715 (SEIU 715), TAEA, and ATU; and Valley Health Plan for ATU represented employees. Passed Department of Motor Vehicle audit (pull notice program) - VTA is currently 100% in compliance. Risk Management: Managed the Owner Controlled Insurance Programs, which produced savings of over $6.8 million since the inception of the Light Rail and Highway construction projects. Underground Storage Tank Cleanup Fund reimbursement for North Bus Division expenses, $155,000. Combined efforts with Operations Division on the Transitional Work Program (TWP) for ATU represented employees. Risk Management Department provides the administration and monitoring support for this program. Since implementation by Operations on January 1, 2005, the TWP has successfully assisted injured or sick employees who are temporarily unable to perform their regular assignments due to medical restrictions from industrial and non-industrial injury or illness by providing temporary work assignments until they are physically able to perform all of their regular job functions. As of the end of February 2005, there were 18 participants and savings were made in temporary disability payments and in Loss Time Days. In FY2005 VTA experienced decreases of 33% in Workers' Compensation (WC) Payments, 30% in WC Claims Filed, 29% in WC New Reserves, 8% in Open WC Claims, 9% in WC Open Reserves, 66% in Lost Workdays associated with New WC claims filed, and 59% in Overall Lost Workdays which produced significant savings totaling $5.4 million ($2.2 million Payments, $0.8 million New Reserves, $2.4 million Open Reserves). CONSTRUCTION DIVISION Transit Operations Projects: Completed construction of the North Division Reconstruction Project. Completed raising the Guadalupe platform stations north of Ayer/Japantown and advertised for construction of the next phase of platform modifications in the Transit Mall. Completed construction of Cerone Division Improvements, Cerone Zero Emission Buses (ZEB) Demonstration Project, and Guadalupe Light Rail Vehicle (LRV) Facility Expansion. Started construction of Chaboya Division improvements. T-Signals replaced on Tasman West. Installed cameras at key transit center locations. 1996 Measure B Transportation Improvement Program - Transit: Completed Tasman East and Capitol Light Rail Projects on time and $18 million under budget without construction claims. Started construction on all remaining contracts for the Vasona Light Rail Project. Resolved outstanding California Public Utilities Commission (CPUC) issues on the Vasona Light Rail Project. Completed construction on the double track project from Tamien Station to Lick and the Santa Clara Station as part of the Caltrain Service Improvements Program. Began construction of the Palo Alto Transit Center and Historic Depot improvements as part of the Caltrain Service Improvements Program. 1996 Measure B Transportation Improvement Program - Highway: Completed construction of improvements for the Route 85/101 (South) Interchange. Complete Route 237/880 Interchange Project in Milpitas. Completed Route 85/87 Landscaping Project. Began construction of Phase B1 of Route 152 Improvements in Gilroy. Began construction of Route 85/101 (South) Interchange Landscaping Project. Began construction of Route 880 Landscaping Project. 2000 Measure A Transit Improvement Program: Started the preliminary engineering and value engineering studies for the Silicon Valley Rapid Transit Corridor Project (SVRT). Started preliminary engineering for the Capitol Expressway Light Rail Project. Acquired Newhall Yard for SVRT Project and future Caltrain access rights for 5 additional trains to Gilroy. Started engineering for Caltrain South County track improvements in order to accommodate additional trains to Gilroy. Valley Transportation Plan (VTP) Highway Projects: Completed Bailey/US 101 Interchange for City of San Jose on time and under budget in December 2004. Started construction of the I-880/Coleman Avenue Interchange Project for the City of San Jose. Started construction of Route 87 (North) High Occupancy Vehicle (HOV) lane improvements in October 2004. Caltrans started construction of Route 87 (South) HOV lane improvements in December 2004. DEVELOPMENT & CONGESTION MANAGEMENT DIVISION 1996 Measure B Transportation Improvement Program - Highway: Completed the following construction projects: Improvements as part of the I-880 Widening, and the Consolidated Biological Mitigation projects. Phase A-2 of Route 152 Improvements in Gilroy. Began construction on the following contracts: (a) Route 87 (South) HOV lanes in San Jose; (b) Route 87 (North) HOV lanes in San Jose; (c) Replacement planting/landscaping for Route 85/87 Interchange. 2000 Measure A Transit Improvement Program: Continued the conceptual studies for the Silicon Valley Rapid Transit Corridor Study of the Bay Area Rapid Transit (BART) system. Completed the Final Environmental Impact Report (EIR) for the Silicon Valley Rapid Transit Corridor. The EIR was certified and 16.3 mile BART Extension project description was adopted by the VTA Board. Completed conceptual engineering studies for the Silicon Valley Rapid Transit Corridor. Completed the Downtown East Valley (Capitol Expressway project) Conceptual Engineering phase, including the Draft and Final Environmental Impact Study/Environmental Impact Report (EIS/EIR). Completed the Conceptual Engineering for the Downtown East Valley (DTEV), (Santa Clara/Alum Rock project) and the Draft EIS/EIR. Congestion Management Program: Completed the Final Draft of Valley Transportation Plan (VTP) 2030. Completed the I-680/I-880 Cross-Connector Study. Completed the Draft Southern Gateway Transportation and Land Use Study. Completed the update of the Countywide Transportation Model. Commercial Development Program: Developed both the Joint Development Policy and Developer Selection Process to generate revenue for VTA, increase utilization of public transit system, and promote Transit-Oriented Development (TOD). Identified four joint development sites and sent out solicitations to developers to begin the process of developing those sites. Transit Planning & Development: Completed the FY2004-2013 Short Range Transit Plan (SRTP). Secured Federal Grants of approximately $50 million (including Preventive Maintenance funds) and State Transportation Development Act/State Transit Assistance (TDA/STA) funds of $70 million. Highway Project Development & Administration: Completed environmental clearance and preliminary engineering for Route 101 Operational improvements project. Completed High Occupancy Vehicle, High Occupancy Toll (HOT) Lane Feasibility Study with recommended alternatives. Commenced preliminary engineering/environmental approval activities for highway projects selected by the VTA Board in implementation of Valley Transportation Plan (VTP) 2030. Marketing & Public Affairs: As VTA's primary internal and external voice, issued approximately 360 news releases and responded to approximately 1,200 media inquires. Completed comprehensive promotional campaigns for the Tasman/East Capital Light Rail Extension, the "We Delivered" Campaign to thank voters for making 1996 Measure B projects, holiday shopping, Downtown Ice, and underutilized routes. Responded to over 800,000 customer telephone contacts. Coordinated community outreach activities for more than 24 active capital projects, and developed opening events for four projects. Also coordinated five project tours and presentations for local elected officials and foreign visitors. Disseminated VTA service and program information though onsite customer assistance at transit centers, shopping malls, community events, Youth Outreach Program presentations, and visits to senior/disabled centers and residential complexes, reaching over 10,000 potential riders. Maintained Eco Pass participation with 76 employers, residential communities and universities representing over 127,000 individuals. Continued partnerships with organizations throughout the county, increasing VTA's visibility in the community. Prominent partnerships included the Tapestry Arts Festival, San Jose's Annual Downtown Ice, Annual International Mariachi Festival, Eastridge Mall, Great Mall, Stanford Shopping Center, and Westfield Shoppingtowns at Oakridge and Valley Fair. Coordinated installation of nine Community Oriented Design Enhancements (CODE) projects. FISCAL RESOURCES DIVISION Completed a subleasing transaction involving VTA's older Urban Transportation Development Corporation (UTDC) Light Rail vehicles to Salt Lake City and Sacramento Regional Transit District. Completed two lease to service financial transactions for Low Floor Light Rail Vehicles. Completed refinancing of Measure A repayment obligation. Accrued company-wide investment earnings of $51.8 million in FY2004 and anticipate $43.1 million for FY2005. Modified scoring methodology of the contractor pre-qualification program. Successfully implemented the first VTA Biennial Operating Budget. Developed and implemented VTA Fare Policy. Received Certificate of Achievement for Excellence in Financial Reporting for the June 30, 2003 Comprehensive Annual Financial Report (CAFR) from the Government Finance Officers Association (GFOA). Processed vendor payments within fifteen days of receipt. OPERATIONS DIVISION Service Performance Highlights: For FY2004, 99.35% of the scheduled service was delivered, an improvement from the 99.23% recorded in FY2003. Miles between chargeable accidents improved by 44.3% compared to last year fiscal year. Miles between mechanical delays improved 20.9% and reached an all time high performance level. Light Rail ridership increased 10% in the fourth quarter of FY2004. Efficiencies: The Operations Division implemented a significant reorganization in January 2004 to streamline its operations and improve cost efficiency. This productivity program is benchmarked against transit industry standards and resulted in significant reduction of expenses. Operator attendance has improved significantly. In June 2004 the operator utilization rate was 82.92%, the highest utilization rate in the past three years. This efficiency improvement allowed us to reduce the number of extra board bus operator positions. During FY2004 and FY2005, Paratransit service expenditures declined by $3.6 million when compared to FY2003. Developed a new operating scenario for the Tasman East/Capitol light rail line linking it with the Guadalupe line. This new operating scenario provided a better balance to the rail operation and lowered the previously estimated annual operating costs by $1.6 million. The new rail-operating plan was implemented in June 2004. Innovations: Zero Emission Bus (ZEB) program - Received three hydrogen fuel cell ZEBs. Completed construction of a hydrogen fueling facility at the Cerone Operating Division and nearing completion of ZEB maintenance bays. Established operating protocols and are training mechanics and first responders. Enhanced Bus/Bus Rapid Transit - Started key efforts to implement Enhanced Bus/Bus Rapid Transit service in the Line 22 corridor including installation of bus signal priority hardware and software at over 60 intersections along El Camino and Alameda. Additional Accomplishments: Combined efforts with Administrative Services Division on the Transitional Work Program (TWP) for ATU represented employees. The Operations Division implemented TWP on January 1, 2005 to assist injured or sick employees who are temporarily unable to perform their regular assignments due to medical restrictions (industrial and non-industrial injury or illness). The TWP provides temporary work assignments for employees whose treating physicians determine that they are unable to perform all of their regular jobs functions. Work assignments include either modifying their current position or placement in an alternate (special duty) position. Developed the VTA Service Management Plan as recommended by the Ad-Hoc Financial Stability Committee. This plan presents service standards and evaluation measures for managing the existing system, changing service, and designing and implementing new service. Trained all first responders on the new Kinkisharyo low floor light rail vehicle for emergency vehicle entry, hostage situations and threats of terrorism. Provided training on the anhydrous ammonia equipped buses Nitrogen Oxide (NOx) Demonstration Test Program and hydrogen fueled buses and development of mutual aide support with outside agencies in the event of a manmade or natural disaster. Developed and implemented the Security and Emergency Preparedness Program Plan. This plan provides basic terrorism awareness training, references VTA's Emergency Operations Plan and the Business Recovery Plan. This includes the Homeland Security Alert System (HSAS) and the procedures that define VTA's response at various threat levels. Joined Transit Watch, a public awareness campaign developed by the U.S. Department of Transportation's Federal Transit Administration (FTA) in November 2003. Transit Watch is intended to be a nationwide safety and security awareness program that encourages the active participation of transit passengers and employees in maintaining a safe transit environment. Transit Watch car cards are posted on buses and light rail vehicles throughout VTA's system asking VTA employees and passengers to help keep VTA safe by being alert to activities, objects, or situations that seem suspicious. Developed the Security Incident Reports Program in April 2004 to encourage communication about security issues between Protective Services and VTA employees and contractors. All Security Incident Reports are entered into a database that allows Protective Services staff to easily and quickly identify security trends and develop reports on security activity that occurs on the VTA transit system. Section III OPERATING BUDGET By DIVISION Goals, Projects, & Major Efforts FY2006 & FY2007 GOALS, PROJECTS AND MAJOR EFFORTS OFFICE OF THE GENERAL MANAGER VTA will host the American Public Transportation Association (APTA) 2006 Annual Conference which brings transportation professional together from all over the world for the purpose of planning, strategizing, sharing experience and information learning and networking. This conference normally draws approximately 4,500 people providing positive economic impact to San Jose and regional businesses as well as international exposure. Publish the VTA Performance Report, which is a succinctly condensed report, highlighting significant VTA activities and accomplishments of recent past, present and new future. The document will be designed for wide distribution to a variety of constituents. ADMINISTRATIVE SERVICES DIVISION Technology: Retire business systems that were not meeting user expectations, thereby eliminating the annual maintenance fee and reducing staff requirements. Leverage the SAP investment by migrating legacy business applications. Begin the design and implementation on the "Real Time Customer Information" project to provide real time passenger information to our customers. This would include electronic signs at stations transit centers, major bus stops and Bus Rapid Transit (BRT) stations. Begin SAP upgrade, including an upgrade of applicable software and hardware platform to ensure efficient operations, enhanced reliability and compatibility with other VTA operating systems. Develop and maintain critical staff skills in conducting VTA business using SAP technology tools. Human Resources: File an Affirmative Action Plan / Equal Employment Opportunity (AAP/EEO) Program update with Federal Transit Administration (FTA). Develop and implement Executive Management Succession Planning Program. Reconvene monthly labor management meetings between the Amalgamated Transit Union (ATU) and VTA. The current collective bargaining agreements between VTA and Service Employees International Union Local 715 (SEIU); and VTA and the Transportation Authority Engineers and Architects' Association, expire in May 2006 and July 2006 respectively. VTA will initiate contract negotiations with each of the collective bargaining units and successfully complete negotiations in 2006. CONSTRUCTION DIVISION Transit Operations Projects: Complete construction of the Transit Mall platform modifications by September 2006, before the American Public Transit Association (APTA) Annual Conference in downtown San Jose. Complete T-Signal retrofit on Guadalupe Light Rail System. Complete light rail drainage project at National Aeronautics and Space Administration (NASA) in Mountain View. Complete San Carlos Street rail replacement in late 2005. 1996 Measure B Transportation Improvement Program - Transit: Open the Vasona Light Rail Project in the summer of 2005, six months early and on budget. Complete Palo Alto Caltrain Transit Center and Historic Depot improvements by summer of 2005. VTA "Close-out Plan" for Measure B Program to be complete by December 2005. The draft plan will include a discussion on how to complete the balance of deferred projects if funds are available and recommendations for handling ongoing Measure B commitments on landscaping and biological mitigation site maintenance. Assist in the preparation of the June 2006 Measure B Revenue & Expenditure Plan. 1996 Measure B Transportation Improvement Program - Highway: Complete the following: Route 152B construction Route 85/101 (South) Landscaping and start plant maintenance phase Route 880 Landscaping and start plant maintenance phase Route 17E Auxiliary lane construction by mid 2006 Route 85 Noise Mitigation construction by mid 2006 Construction on the Route 85/101 (North) Interchange project in Mountain View in early 2006. Installation of highway planting landscaping projects on I-880 Widening and 85/101 South Interchange Projects. 2000 Measure A Transit Improvement Program: Complete Preliminary Engineering and revised estimate for the Capitol Expressway Light Rail Project from Alum Rock to Nieman Station by December 2005. Complete Preliminary Engineering estimate for the Silicon Valley Rapid Transit (SVRT) Project by April 2006 for New Rail Starts submittal to Federal Transit Administration. Working with Board, stakeholders and Development and Congestion Management Division assist in implementation strategy for 2000 Measure A Capital Program. Complete all SVRT Preliminary Engineering effort by December 2006. Begin design of Caltrain South County track improvements with Union Pacific Railroad. Assist Development and Congestion Management Division with the preparation of the Caltrain Capital Improvement Program. Valley Transportation Plan (VTP) Highway Projects: Complete interchange construction work for the I-880/Coleman Avenue Interchange project for the City of San Jose. Complete the River Oaks Bicycle/Pedestrian Bridge in San Jose and Santa Clara. DEVELOPMENT & CONGESTION MANAGEMENT DIVISION Congestion Management Program: Develop the following: The 2005 Congestion Management Program Capital Improvement Program (CIP) element of the 2005 Congestion Management Program (CMP) Expenditure Plan for New Vehicle Registration Fee 2006 State Transportation Improvement Program (STIP) Commercial Development Program: Enter into Exclusive Negotiating Agreements and finalize Development Agreements/Ground Leases with developers for the following: Tamien, Curtner, and Capitol park and ride property for Joint Development projects San Carlos/Sunol excess property site Exchanged property at Page Mill Road and El Camino Real (park and ride site) for a joint development property Joint development project on the park and ride site at Lawrence Expressway and Moorpark. Advertise a Joint Development Solicitation for the I-880/Alder (Milpitas) Light Rail Station park and ride lot, Cottle Light Rail Station park and ride lot, Snell/Highway 85 Light Rail park and ride lot and Blossom Hill/Highway 85 Light Rail Station park and ride lot sites. Transit Planning: Complete the following: 2005-2014 Short Range Transit Plan (SRTP) Long Term Transit Capital Investment Program South County Circulation Study Route 880 Corridor Study South County Transportation Study 2005 FTA New Starts Update Report Community Outreach for Preliminary Engineering and Value Engineering for the Silicon Valley Rapid Transit Corridor Project (final BART EIR/EIS) Final Environmental Impact Statement/Environmental Impact Report (EIS/EIR) for the Downtown East Valley (DTEV), (Santa Clara/Alum Rock) Project and release same (Santa Clara/Alum Rock Environmental Document) Gilroy and East San Jose community-based plans Continue work on Draft and Final Environmental Impact Statement (EIS) for the Silicon Valley Rapid Transit Corridor (SVRTC). Begin support studies for the Silicon Valley Rapid Transit Corridor related to economic analysis, urban design, station area planning and parking strategies (BART Economic Impact Analysis). Participate in/support Dumbarton Rail, Line 22 BRT Implementation, Peninsula Corridor Joint Powers Board ("PCJPB" aka Caltrain) Diridon Station Study and Metropolitan Transportation Commission (MTC) Regional Rail Study. Develop the Capital Transit Expansion Program (for a future rail and bus service expansion policy) and develop the Rail Corridor Study. Begin Caltrain Capital Improvement plan. Develop recommendations for High Occupancy Toll (HOT) lanes feasibility study to arrive at HOT lane recommendations. Programming & Project Development: Award construction contract for River Oaks Bicycle/Pedestrian Bridge. Begin preliminary engineering of High Occupancy Toll (HOT) Lane Demonstration Project and complete the HOT Lane Recommendation Study. Complete Guadalupe Corridor Right of Way Resolution. Prepare Long Term Resource Management Plan for Checkerspot Butterfly Habitat. Complete construction of the River Oaks Bicycle/Pedestrian Bridge in San Jose and Santa Clara. Complete environmental document for the Route 152/156 Interchange Project. Complete environmental document for US 101 Improvements in San Jose (Highway 101 corridor) Develop property acquisition policy for future transit facilities (Property Acquisition Policy to be submitted for Board Adoption). Marketing & Public Affairs: Initial Marketing: Create and implement a comprehensive marketing and public relations plan. Move from reactive to proactive internal and external communications, contributing to more positive and accurate identity. Enhance the quality of onsite customer service and increase telephone customer contact answer rate. Enhance community outreach and public affairs efforts to support capital projects, including the Bay Area Rapid Transit (BART) to San Jose/Santa Clara, Downtown East Valley transit projects, Vasona Light Rail project and Route 85/101 (North) Interchange project. Create, research, implement and evaluate for effectiveness major marketing campaigns targeted at specific audiences to attract new riders. Promote ridership on underutilized bus routes. Continue the promotion of the Vasona Light Rail Extension and improvements in the Line 22 corridor. Target new Eco Pass customers with special promotions in current and new service corridors, while retaining current Eco Pass customers. Increase Youth Outreach Program (YOP) presentations by five percent and increase utilization of Class Passes by ten percent. Complete design, fabrication and installation of eight Community Oriented Design Enhancements (CODE) projects for the Vasona Light Rail Project and two Caltrain projects. Complete marketing surveys of the eligibility process and satisfaction of paratransit services, as well as current and potential VTA riders. Introduce a youth pass promoting new riders to the system while retaining those who utilize the system during the school year. Develop senior/disabled free ride promotion, offering seniors and those with disabilities free rides on VTA transit during off-peak hours and weekends. Develop "Spare the Air" days, offering free rides during morning hours on up to five designated Spare the Air Days. Develop a Major School Program to enhance outreach efforts to specific schools located within 1/4 mile of bus and light rail, promote school field trip program, and partner with school and educators to introduce more youth to public transportation. FISCAL RESOURCES DIVISION Remarket Measure A Bonds with mandatory tender date of October 2006. Evaluate and, if beneficial, issue Pension Obligation Bonds to fund VTA's unfunded pension liability and reduce annual cost of amortizing the liability. Implement an upgrade to the financial management module in (SAP) system, including conversion to fund accounting. Hold a vendor fair at least once a year. Play a key role in the implementation of the Executive Information System. Attain certification from Municipal Treasurers' Association's "Investment and Policy Certification Program". Successfully complete annual financial audits with no major exceptions. Submit Comprehensive Annual Financial Report (CAFR) to Government Finance Officers' Association (GFOA) for professional evaluation. Prepare Biennial Operating & Capital Budget for Board review in April with scheduled adoption in June. Assist in implementation of Translink on VTA systems. Implement an Annual Compliance Review Plan. Implement an automated budget system to replace the current manual spreadsheet process. OPERATIONS DIVISION Administration: Continue to develop and implement administrative procedures to standardize and streamline administrative processes. Develop and implement additional strategies and programs to reduce employee absenteeism and effectively manage lost time. Continue to implement strategies to improve productivity and reduce operating expenses. Protective Services: Conduct a comprehensive analysis of VTA's security program and, based on its findings and conclusions, issue a Request for Proposals (RFP) for security services. Continue the expansion of the On Board Closed Circuit Television (CCTV) including the installation of CCTV at key locations along the Vasona Line. Provide ongoing Security Awareness training for Santa Clara Valley Transportation Authority (VTA) employees and contractors. Continue to update the Security Emergency Preparedness Program Plan on an annual basis, conduct security assessments for all Divisions and facilities and convene the Security Breech Review Committee during emergencies or on a quarterly basis. Continue to provide education and familiarization training, schedule drills and training exercises for first responders (police and fire) for bus and light rail. Maintain a light rail fare evasion rate of 3% or less. Service and Operations Planning: Conduct a Comprehensive Operations Analysis (COA) of VTA bus and light rail services to attract new customers and improve overall system productivity and efficiency. Develop programs to increase transit ridership. Introduce local community based bus services using small transit vehicles to lessen the impact upon the communities served and provide a flexible, community oriented public transportation alternative. In Los Gatos, implement rail feeder community bus lines in August 2005. Analyze ridership, demographic, market segmentation results and operational characteristics of existing services to determine VTA's effectiveness in providing efficient transportation services. Conduct mode choice analyses to better understand tradeoffs travelers make in considering travel options. Complete development of Advanced Communications System (ACS) customized reports to be used by VTA management and operating personnel. Install 35 new shelters in the City of Palo Alto as part of the Transit Shelter Advertising Program. Continue implementing passenger amenity and accessibility improvements to VTA's 4500 bus stops. Continue study and implementation of VTA's Enhanced Bus/Bus Rapid Transit (BRT) program. Key efforts include the development of BRT design guidelines and studies on exclusive bus lanes, stations and other project elements leading to full BRT corridor development. Implement the Bus Signal Priority project on high volume transit corridors in VTA's service area. Using a FY2005 congressional earmark this $1.0million program will enable VTA buses to move faster and more reliably through congested arterial corridors. Implement the Passenger Information project to provide real time bus and rail information to passengers at transit centers, key bus stops and light rail stations, through vta.net and the regional TravInfo/511 system. Accessible Services: Implement travel training program. Develop partnerships with groups to improve transportation for senior and disabled persons. Bus Operations: Meet or exceed the goal of providing 99.3 percent of scheduled bus services. Review and implement changes to the Bus Operator's Rulebook and Procedures for the VTA system. Perform evaluation of Zero Emission Buses (ZEB) in revenue service. Improve the mechanical schedule loss by exceeding the coach reliability goal of 6,000 miles for buses. Establish Maintenance Process Guidelines for maintenance tasks, to improve productivity and performance. Remove and replace the current exhaust filters on 129 buses with California Air Resource Board (CARB) stipulated 85% Preventive Maintenance (PM) exhaust reduction filters. Rail Operations: Meet or exceed the goal of providing 99.9 percent of scheduled service. Plan and coordinate all pertinent Operations Division programs to effect the activation of the Vasona light rail extension, which includes eight new stations and two new Park and Ride Lots. Desired outcome is to successfully complete timeline goals in preparation for planned revenue service in August 2005. Operations Support Services: Develop management information systems tools to support maintenance productivity improvement programs. Assess new functionality and provide administrative and subject matter expert support for major upgrade of Materials Management module in Systems, Applications and Products in Data Processing (SAP) system in FY2006 and FY2007. Support major upgrade of SAP maintenance module. Complete implementation of bar code technology for bus and rail parts inventory management Implement an effective rebuild and overhaul production planning and materials budgeting process for bus and rail maintenance. Procure and install a new bus vacuum system at Cerone, to complement three new bus washes and a new state of the art wastewater treatment system. Operations Engineering: Complete the reliability test program and close out the procurement contract for 100 low floor light rail vehicles, including the development of detailed specifications and procurement documents for alternate parts. Continue to demonstrate technology that has the potential to reduce Nitrogen Oxide (NOx) emissions by 70% or more on three buses operating in revenue service over a three-year period. The technology tested should reduce NOx emissions and demonstrate the durability of emission control systems. Manage the demonstration program for three Zero Emission Buses including the associated fueling facility and maintenance activities. Section III OPERATING BUDGET By DIVISION Division Budget Summaries OFFICE OF THE GENERAL MANAGER The following is a description of the organizational chart for the division of the General Manager: General Manager, Michael T. Burns, reports to the Board of Directors. General Manager, Michael T. Burns is supported by Board Secretary, Maria Marinos, Administration, Government Affairs Mgr. State & Federal, Kurt Evans, and Government Affairs Mgr. Local & Regional, Jim Lawson. Board Secretary is responsible for the Board Office and Record Management & Document Control. Tim Ellenberger is the manager of Record Management and Document Control. Position counts for the General Manager Division are: Fiscal year 2005, as of March 9, 2005, 36 positions Fiscal year 2006, as o July 1, 2005, 36 positions Fiscal year 2007, as of July 9, 2005, 36 positions RESPONSIBILITIES The General Manager's Office is responsible for the management of the Santa Clara Valley Transportation Authority (VTA) according to the policies adopted by the Board of Directors. General duties include the development of program and policy alternatives for consideration by the Board and management of the authority's staff activities. Specific functions within the General Manager's Office include support of the Board through the Board Secretary, policy development, strategic planning, and intergovernmental and business relations. MAJOR PROGRAMS The Office of the Board Secretary is responsible for all Board-related activities. These include the preparation and publication of agendas, notices, minutes of meetings, hearings, and other matters within the jurisdiction of the Board. Additionally, the Record Management and Document Control department maintains documents and prepares "as-built" plans for most of the large capital projects and is responsible for VTA's document reproduction center. The Chief of Staff assists and participates in the planning, organizing, and facilitating the activities of the General Manager. In this capacity, the Chief of Staff facilitates and coordinates with Executive Management on items critical to VTA including strategic planning and analysis, program development, and internal and external policy development. Government Affairs is primarily responsible for developing and coordinating VTA's legislative and intergovernmental relations programs. Specifically, it analyzes the impact of state and federal legislative issues, and develops and coordinates VTA's strategy for responding to these issues. It manages VTA's legislative advocacy efforts in Washington, D.C. and in Sacramento. Government Affairs also coordinates VTA's outreach efforts to the local community, the cities, and respective state and federal legislative delegations. Government Affairs also serves as VTA's principal liaison with the joint powers boards (Caltrain, ACE, and Capitol Corridor) and Regional Policy Advisor Board for the Dumbarton Rail project. Government Affairs supports VTA's liaison activities with business organizations, other community groups within the county, and to some extent, specific governmental institutions. Various special projects and programs (both internal and external) are also coordinated out of the General Manager's Office. The following table shows the budget for the Office of the General Manager, and the numbers are expressed in thousands. Wages and Benefits: FISCAL YEAR 2004 Actual $3,212, FISCAL YEAR 2005 Budget $3,484, FISCAL YEAR 2005 Revised $3,288, FISCAL YEAR 2006 Adopted Budget $3,707, and FISCAL YEAR 2007 Adopted Budget $3,758. Materials and Supplies: FISCAL YEAR 2004 Actual $5, FISCAL YEAR 2005 Budget $9, FISCAL YEAR 2005 Revised $9, FISCAL YEAR 2006 Adopted Budget $7, and FISCAL YEAR 2007 Adopted Budget $7. Professional and Special Services: FISCAL YEAR 2004 Actual $260, FISCAL YEAR2005 Budget $339, FISCAL YEAR 2005 Revised $339, FISCAL YEAR 2006 Adopted Budget $364, and FISCAL YEAR 2007 Adopted Budget $390 Other Services: FISCAL YEAR2004 Actual $369, FISCAL YEAR 2005 Budget $422, FISCAL YEAR 2005 Revised $422, FISCAL YEAR 2006 Adopted Budget $308, and FISCAL YEAR 2007 Adopted Budget $316. Office Expense: FISCAL YEAR 2004 Actual $25, FISCAL YEAR 2005 Budget $24 FISCAL YEAR 2005 Revised $24 FISCAL YEAR 2006 Adopted Budget $27, and FISCAL YEAR 2007 Adopted Budget $27 Employee Related Expense: FISCAL YEAR 2004 Actual $31 FISCAL YEAR 2005 Budget $156, FISCAL YEAR2005 Revised $156, FISCAL YEAR 2006 Adopted Budget $141, and FISCAL YEAR2007 Adopted Budget $141. Lease and Rents: FISCAL YEAR 2004 Actual $296, FISCAL YEAR 2005 Budget $295, FISCAL YEAR 2005 Revised $295, FISCAL YEAR 2006 Adopted Budget $301, and FISCAL YEAR 2007 Adopted Budget $309. Miscellaneous: FISCAL YEAR 2004 Actual $272, FISCAL YEAR 2005 Budget $397, FISCAL YEAR 2005 Revised $397, FISCAL YEAR 2006 Adopted Budget $428, and FISCAL YEAR 2007 Adopted Budget $428. Contribution to Other Agencies: FISCAL YEAR 2004 Actual $0, FISCAL YEAR 2005 Budget $0, FISCAL YEAR 2005 Revised $0, FISCAL YEAR 2006 Adopted Budget $263, and FISCAL YEAR 2007 Adopted Budget $281. Other Expense: FISCAL YEAR 2004 Actual $0, FISCAL YEAR 2005 Budget $343, FISCAL YEAR 2005 Revised $3, FISCAL YEAR 2006 Adopted Budget $203, and FISCAL YEAR 2007 Adopted Budget $3. Contingency: FISCAL YEAR2004 Actual $0, FISCAL YEAR 2005 Budget $2000, FISCAL YEAR 2005 Revised $1,710, FISCAL YEAR 2006 Adopted Budget $2,000, and FISCAL YEAR 2007 Adopted Budget $2,000. Total Expense: FISCAL YEAR 2004 Actual $4,470, FISCAL YEAR 2005 Budget $7,469, FISCAL YEAR 2005 Revised $6,643, FISCAL YEAR 2006 Adopted Budget $7,751, and FISCAL YEAR 2007 Adopted Budget $7,662. Reimbursements: FISCAL YEAR 2004 Actual -$960, FISCAL YEAR 2005 Budget -$896, FISCAL YEAR 2005 Revised -$896, FISCAL YEAR 2006 Adopted Budget -$1,352, and FISCAL YEAR 2007 Adopted Budget -$1,365. Net Total: FISCAL YEAR 2004 Actual $3,510, FISCAL YEAR 2005 Budget $6,572, FISCAL YEAR 2005 Revised $5,747, FISCAL YEAR 2006 Adopted Budget $6,399, and FISCAL YEAR 2007 Adopted Budget $6,298. MAJOR BUDGETARY CHANGES Contingency In order to maintain a more efficient budgeting process, an individual division does not budget for contingency within its own budget. An organization-wide contingency fund is established within the Office of the General Manager to fund urgent and unexpected programs or projects. During development of the FY1998 Budget, the Administration and Finance Committee recommended that VTA's budget policy should include the establishment of a contingency fund (i.e., the General Manager's unallocated fund) at 3.0% of the operating budget. Most of the fund has been used to fund new capital projects. However, due to the current financial situation, we do not believe that we will launch any non-critical new capital projects and new programs during this new two-year budget. Consequently, we should need only $2.0 million per year for contingency purposes in FY2006 and FY2007, as has been budgeted the past two years. We will re-institute the 3% policy once our financial conditions improve. Miscellaneous Expense VTA will be hosting the 2006 APTA conference and $200,000 is being budgeted for associated costs. OFFICE OF THE GENERAL COUNSEL The following is a description of the organizational chart for the Office of the General Counsel: General Counsel, Suzanne Gifford, reports to the Board of Directors. She is supported by Assistant General Counsels Richard Katzman and Kevin Allmand, Attorneys, and support staff Position counts for the Counsel Office are: Fiscal year 2005, as of March 9, 2005, 9 positions Fiscal year 2006, as o July 1, 2005, 9 positions Fiscal year 2007, as of July 9, 2005, 9 positions RESPONSIBILITIES The General Counsel's Office provides legal advice and counsel to all of the divisions and departments, as well as to the General Manager and the Board of Directors, with respect to all facets of VTA's operations, including the Congestion Management Program. MAJOR ACTIVITIES Assist divisions and departments to achieve their goals by providing legal advice and support: In connection with labor/employment issues, including representing VTA in litigation and in arbitration hearings Concerning contract, real estate, construction and public agency law issues By reviewing, analyzing and drafting administrative policies and procedures and legislation By representing VTA in other litigation Provide legal support to the VTA-ATU Pension Board and to the VTA Deferred Compensation Committee Retain and supervise outside counsel who provide specialized legal services The following table shows the budget for Office of the General Counsel, and the numbers are expressed in thousands. Wages and Benefits: FISCAL YEAR 2004 Actual $1,240, FISCAL YEAR 2005 Budget $1,556, FISCAL YEAR 2005 Revised $1,404, FISCAL YEAR 2006 Adopted Budget $1,598, and FISCAL YEAR 2007 Adopted Budget $1,617. Professional and Special Services: FISCALYEAR 2004 Actual $66, FISCAL YEAR 2005 Budget $211, FISCAL YEAR 2005 Revised $211, FISCAL YEAR 2006 Adopted Budget $200, and FISCAL YEAR 2007 Adopted Budget $210. Other Services: FISCAL YEAR 2004 Actual $8, FISCAL YEAR 2005 Budget $0, FISCAL YEAR2005 Revised $0, FISCALYEAR 2006 Adopted Budget $7, and FISCAL YEAR2007 Adopted Budget $7. Office Expense: FISCAL YEAR2004 Actual $2, FISCAL YEAR 2005 Budget $2, FISCAL YEAR2005 Revised $2, FISCAL YEAR 2006 Adopted Budget $2, and FISCAL YEAR2007 Adopted Budget $2. Communications: FISCAL YEAR 2004 Actual $0, FISCAL YEAR 2005 Budget $0, FISCAL YEAR 2005 Revised $0, FISCAL YEAR 2006 Adopted Budget $1, and FISCAL YEAR 2007 Adopted Budget $1. Employee Related Expense: FISCAL YEAR 2004 Actual $4, FISCAL YEAR 2005 Budget $8, FISCAL YEAR 2005 Revised $8, FISCAL YEAR 2006 Adopted Budget $7, and FISCAL YEAR 2007 Adopted Budget $21. Miscellaneous: FISCAL YEAR 2004 Actual $16, FISCAL YEAR 2005 Budget $20, FISCAL YEAR 2005 Revised $20, FISCAL YEAR 2006 Adopted Budget $15, and FISCAL YEAR 2007 Adopted Budget $15. Total Expense: FISCAL YEAR 2004 Actual $1,337, FISCAL YEAR 2005 Budget $1,797, FISCAL YEAR 2005 Revised $1,645, FISCAL YEAR 2006 Adopted Budget $1,830, and FISCAL YEAR 2007 Adopted Budget $1,873. Reimbursements: FISCAL YEAR 2004 Actual -$388, FISCAL YEAR2005 Budget -$279, FISCAL YEAR2005 Revised -$279, FISCAL YEAR2006 Adopted Budget -$247, and FISCAL YEAR2007 Adopted Budget -$250. Net Total: FISCAL YEAR 2004 Actual $949, FISCAL YEAR 2005 Budget $1,518, FISCAL YEAR2005 Revised $1,366, FISCAL YEAR 2006 Adopted Budget $1,582, and FISCAL YEAR 2007 Adopted Budget $1,623. MAJOR BUDGETARY CHANGES No significant changes are proposed. ADMINISTRATIVE SERVICES DIVISION The following is a description of the organizational chart for the Administrative Services Division: Chief Administrative Officer, Kaye L. Evleth is responsible for Employee Services, Employee Relations, Technology and Risk Management. Shellie Albright is the manager for Employee Services, Robert Escobar is the manager for Employee Relations, George Barlow is Chief Technology Officer, and Nanci Eksterowicz is the Risk Management Manager. Position counts for Administrative Services Division are: Fiscal year 2005, as of March 9, 2005, 115 positions Fiscal year 2006, as o July 1, 2005, 111 positions Fiscal year 2007, as of July 9, 2005, 110 positions RESPONSIBILITIES The Administrative Services Division is responsible for the business and employee support functions, including human resources, risk management, and technology. MAJOR PROGRAMS Technology: The Technology Department enables VTA to achieve business goals through the effective management of its technology. The Technology Department manages business systems (i.e. finance, payroll, and network infrastructure) and transportation systems (i.e. Advanced Communications System and Closed Circuit Television (CCTV)) that serve the administrative and operational needs of VTA and its bus and light rail system. Human Resources: Human Resources is responsible for providing organizational support in the areas of employee/labor relations, employee development and training, equal employment opportunity programs, recruitment, selection, compensation, classification, benefits administration, substance abuse testing, workers' compensation, and claims management and safety. Employee Relations Department The Equal Opportunity Program is responsible for preparing and administering VTA's Equal Employment Opportunity/Affirmative Action Plan; ensuring compliance with state and federal non-discrimination laws and regulations; and conducting discrimination complaint investigations. Activities in the Labor Relations unit are primarily focused on conflict resolution and include negotiating and administering collective bargaining agreements with the labor organizations; providing training and consultation on employee relations issues, including discipline, grievance and arbitration processes; and conducting research regarding labor trends and issues. The Employee Development Program is responsible for the coordination of employee training programs. Such programs may include customer service, computer skills, performance management, tuition assistance, and new employee orientation. The program also focuses on working with managers and employees to increase employee participation in achieving VTA goals and objectives. Activities in this area include, but are not limited to, team building, employee recognition, and coaching. Employee Services Department The Classification and Compensation and the Personnel Services units work cooperatively to conduct studies that appropriately define the work for classes within VTA, ensure that compensation is appropriate and competitive, and maintain the employee, compensation, and classification record-keeping systems for VTA. The Recruitment and Selection unit is responsible for recruitment, including targeted outreach, and administering examinations for candidates to fill vacancies throughout VTA with qualified employees. The Benefits Administration unit is responsible for administering employee and retiree benefits programs, including medical, dental, vision, life insurance, Accidental Death and Dismemberment (AD&D), disability insurance, Health & Dependent Flexible Spending Accounts, and Consolidated Omnibus Budget Reconciliation Act (COBRA). The Retirement Services unit is responsible for administering the deferred compensation, ATU and PERS retirement programs; and serving as staff to the VTA/ATU Pension Board and the VTA Deferred Compensation Committee. Risk Management Departm