San Joaquin Hills Budget

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Bertram Pearson
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1 San Joaquin Hills Fiscal Year 2015 June_2014_SJH_

2 SJHTCA FY15 Summary Toll rates based on Traffic & Revenue consultant recommendation as required by bond indentures FY15 budget flat compared to prior year due to an increase in scheduled debt service offset by a decrease in operating costs related to implementing AET Salaries and benefits flat as compared to prior year through cost containment strategies Agency has budgeted significant cash reserves of $357 million June_2014_SJH_ Page 1

FY15 Proposed Revenues & Expenditures Operating expenses and $2M of eligible additional costs funded with operating revenues Toll revenue calculation assumes T&R Consultant recommendation Fees &

3 FY15 Proposed Revenues & Expenditures Operating expenses and $2M of eligible additional costs funded with operating revenues Toll revenue calculation assumes T&R Consultant recommendation Fees & Penalties $16.8M (12.1%) DIF $3.5M (2.5%) Interest $2.3M (1.6%) Operating Admin $5.0M (4.4%) PEC Admin $2.2M (2.0%) Plan, Env, & Constr $1.6M (1.5%) Toll Ops $7.5M (6.6%) Toll $116.8M* (83.8%) Debt Service $96.5M (85.5%) *Transactional toll revenue of $122.2M reduced by violations and non revenue transactions of $5.4M June_2014_SJH_ Page 2

4 SJH Toll Rate Scenarios for FY15 15% 10% Traffic and Revenue Impacts - Compared to FY14 Estimated Actuals AVERAGE TOLL TRANSACTIONS REVENUE 9.4% 9.0% 10.0% 13.4% 5% 4.5% 3.6% 5.1% 3.8% 5.8% 4.0% 4.8% 5.2% 5.6% 6.5% 1.5% 0% 1.5% 0.0% -0.9% -1.2% -1.8% -5% -4.2% -3.5% -4.0% -6.1% -10% No Toll Increase ALT 3 ALT 5 ALT 7 ALT 8 ALT 2 ALT 6 ALT 4 June_2014_SJH_ Page 3

5 SJH Toll Rates Location Time/Type Current Rates Rate Alternative 7 Change La Paz ExpressAccount/OTT $1.75 $2.34 $0.59 FasTrak $1.30 $1.34 $0.04 Aliso Creek ExpressAccount/OTT $2.50 $2.91 $0.41 FasTrak $1.85 $1.91 $0.06 El Toro ExpressAccount/OTT $3.00 $3.52 $0.52 FasTrak $2.40 $2.52 $0.12 Catalina View ExpressAccount/OTT Off-Peak $6.00 $6.15 $0.15 FasTrak Off-Peak $5.05 $5.15 $0.10 ExpressAccount/OTT SUPER Peak $6.75 $7.65 $0.90 FasTrak SUPER Peak $6.05 $6.65 $0.60 ExpressAccount/OTT Peak $6.75 $7.35 $0.60 FasTrak Peak $6.05 $6.35 $0.30 Weekend ExpressAccount/OTT $5.75 $5.90 $0.15 Weekend FasTrak $4.80 $4.90 $0.10 Newport Coast ExpressAccount/OTT $2.75 $3.26 $0.51 FasTrak $2.15 $2.26 $0.11 Bonita Canyon ExpressAccount/OTT $1.75 $2.00 $0.25 FasTrak $0.95 $1.00 $0.05 June_2014_SJH_ Page 4

6 Toll Operations - $7.5M Decrease in FY15 budget due to the close of the legacy TCARMS maintenance contract, reduced spare parts, and the end of cash collection related expenses FY14 Amended FY14 Est. Actuals FY15 Change Between FY14 Est. Actuals vs. FY15 Toll Customer Service & Compliance $4.5M $4.4M $5.4M $1.0M Toll Systems 1.6M 1.5M 0.8M (0.7M) Toll Equipment 0.7M 0.7M 0.9M 0.2M Toll Collections 1.3M 1.3M (1.3M) Toll Facilities 0.4M 0.4M 0.4M Total $8.5M $8.3M $7.5M ($0.8M) June_2014_SJH_ Page 5

7 Planning, Environmental & Construction - $1.6M The change from FY14 estimated actuals to the FY15 budget is primarily due to the completion of AET offset by signage enhancements FY14 Amended FY14 Est. Actuals FY15 Change Between FY14 Est. Actuals vs. FY15 All Electronic Tolling (AET) $3.7M $3.4M $0.7M ($2.7M) Environmental 179K 119K 179K 60K Other 84K 66K 703K 637K Total $3.9M $3.6M $1.6M ($2.0M) June_2014_SJH_ Page 6

8 Administration Costs - $7.2M Administration costs support planning, environmental, and construction and operating efforts Increase mainly due to refinance costs and reclass of marketing from AET project to operating FY14 Amended FY14 Est. Actuals FY15 Change Between FY14 Est. Actuals vs. FY15 Salaries & Benefits $3.0M $2.7M $2.9M $0.2M Insurance 0.8M 0.8M 0.9M 0.1M Legal 0.3M 0.3M 0.8M 0.5M Consulting 0.4M 0.4M 1.0M 0.6M Rent 0.4M 0.4M 0.4M Transportation & Travel 0.1M 0.1M 0.1M Office Expenses, Equipment, and Other 0.4M 0.4M 0.4M Marketing 0.2M 0.2M 0.7M 0.5M Total $5.6M $5.3M $7.2M $1.9M *Includes proposed staffing plan * C June_2014_SJH_ Page 7 M

9 Salaries & Benefits Overview FY14 to FY15 Salary and Benefit Costs Remain Flat We will continue to contain costs through reduction in headcount (81 to 71) and reduced benefits (OCERS/CAL) and agency staffing model to contract out many of our services We need to acknowledge staff in the role they play in the success of the Agency and have included a 4% merit pool We need to recognize major accomplishments by staff such as AET and the F/E refinance and have included a non-base-building 2% bonus pool We took a very thoughtful and deliberate approach as we identified the staffing needs of the Agency for the coming year in order to support our business model and major initiatives and have included 4 new positions and reclassification of 8 current employees. Because we compete with the private sector in a narrowly focused industry and as the economy improves it will be necessary to focus on retaining our employees and providing opportunity for development June_2014_SJH_ Page 8

10 Recommended FY15 Staffing Plan 71 Funded positions - net decrease of 10 positions 14 reductions 4 new positions 8 reclassifications In addition to the regular funded positions, the budget includes 3 part-time project positions (a decrease of 2) These positions are allocated 79% to F/ETCA and 21% to SJHTCA June_2014_SJH_ Page 9

11 Debt Coverage Calculation FY15 FY15 Adjusted Net Toll Revenues Total Toll Revenues Including Fees and Fines Interest Earnings Current Expenses Funded from Toll Revenue Adjusted Net Toll Revenue $133.6M 2.0M (12.5M) $123.1M * * Annual Debt Service $96.5M Coverage Ratio (1.00x requirement) 1.28x Reflects estimated earnings on specific accounts as defined per the indenture. June_2014_SJH_ Page 10

12 Estimated FY15 Available Cash & Toll Stabilization Surplus Revenues are adjusted net toll revenues less debt service payments and up to $2M of non-operating costs eligible for funding from revenue (per indentures). Surplus Revenue is then used to fund the debt service reserves. After the debt service reserves are fully funded, remaining Surplus Revenue funds are deposited in the toll stabilization fund. Estimated Available Cash (Unrestricted) Estimated Available Cash at 6/30/14 $14.4M Construction Uses (including AET) (2.0M) DIFs and Interest (up to $2.5M DIFs per year) 2.6M Estimated Available Cash at 6/30/15 $15.0M Toll Stabilization (Restricted) Estimated Stabilization Fund at 6/30/14 Surplus Revenue Interest Estimated Toll Stabilization Fund at 6/30/15 $28.5M 19.0M 0.1M $47.6M June_2014_SJH_ Page 11

13 Additional Restricted Funds Caltrans Maintenance Facility $7.9M Commitment to construct facility by 12/31/15 The following reserve funds have been established in accordance with the bond indentures and meet the funding requirements: Current Expense Reserve $3.1M Must be at least 1/4 of budgeted operating expenses Use and Occupancy Reserve $15.0M Intended for any or all of the cost of reconstructing or repairing any portion of the project destroyed or damaged by any cause other than ordinary and usual usage thereof. In addition to cash of $15.0M, an insurance policy with a face amount of $10.0M covers the Agency s bridges, meeting the U & O indenture requirement of $25.0M Debt Service Reserves $269.0M (expected to be fully funded in FY14) Held in trust for the benefit of the bondholders equal to the maximum annual debt service on all outstanding bonds June_2014_SJH_ Page 12

14 Staff Recommendation Approve budget totaling $112,841,993. Approve proposed staffing plan. Adopt toll rates recommended by traffic and revenue consultant. Authorize CEO to reallocate within the following categories: Administration $7,268,783 Planning, Environmental & Construction $1,582,364 Toll Operations $7,493,578 Debt Service $96,497,268 Direct staff to submit budget to the trustee. June_2014_SJH_ Page 13

HRTAC Regional Financial Plan Initial Scenarios. November 19, 2015

HRTAC Regional Financial Plan Initial Scenarios November 19, 2015 HRTAC Planning Approach Create a Regional Financial Plan to Fund All HRTAC Projects Review all project schedules and cost estimates in