ATTACHMENT A
Long Range Transportation Plan
2017 Update The Baseline Financial Forecast Details
Purpose of the LRTP Financial Forecast
Metros long range financial outlook
Guides LRTP development of long range
investment plan for operation of transportation
system and capital projects
Prepared in accordance with sales tax ordinances
and Board policies and guidelines
Supports Transportation Improvement
Program and Long Range Transportation Plan
(LRTP)
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LRTP Financial Baseline
This Financial Forecast provides the financial
baseline for the LRTP Update
Baseline refers to Metros current and known
future operations, maintenance, and capital
financial commitments
Assumes these to be the priority investments for
projected financial capacity
Allows Metro to evaluate different assumptions
regarding investment priorities, and subsequent
impact on financial capacity
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Funding and Uses (40-year) - $560B Total
Countywide Revenues FY 2018 FY 2057 Countywide Expenditures FY 2018 FY 2057
Countywide Rail
& Transitway
$560 Billion Total (YOE) Capital
FY 2018- FY 2057 19.2%
Debt Service
Measure R 8.8%
4.8%
Countywide Bus
Federal Capital
Sales Tax Measure M 5.9% Highways,
7.8%
Financings 21.0% Streets, Roads,
6.8% Multimodal
Countywide Rail 22.3%
Operations
Local 11.2%
44.4% State
15.3%
Countywide
Transit
Operations/ Fund Balances
Paratransit and Carryover
25.1% Other 0.9%
6.4%
- Major Transit and Highway Capital Projects
- Capital Funding Programs
- Bus and Rail Revenue Service Hours
- State of Good Repair
- Metro Administrative Support
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2017 Financial Baseline Key Assumptions
Fully fund the following priorities:
Operations
State of Good Repair (SGR) Needs
Prior Commitments (Measures R & M)
Debt Issued to Support Cash flow for Existing
Commitments
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2017 Financial Snapshot: First 10 Years
Over the next 10 years, funding appears
sufficient to meet estimated system-wide
operating and capital costs (on planned
schedule)
Lowered aggregate sales tax forecast due to slowing
economic activity
Board-approved adjustments of $2.4 billion cost
increases and new projects are addressed
Recent increase in State fuel taxes (SB1) will help
offset lower local revenue and higher costs
Federal funding assumptions are relatively
unchanged
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Board-Approved Adjustments Added to Baseline Expenditures
(since June 2016 update)
Amount
Category (millions)
1) Addition of Sub-regional Equity Program $1,196.0
2) Cost adjustments based on approved LOPs (aggregate) 428.7
3) New projects/Other (e.g., North San Fernando Valley BRT,
Westside Purple Line Ext.3) 759.1
Total $2,383.8
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Potential Projects & Costs
The financial baseline does not include costs or
funding for potential large-scale projects that are
currently under evaluation as first 10-year
investments (partial list)
Electrification of bus system
Link US redesign of Union Station
Wye improvements to Blue and Expo lines
Centinela Grade Separation
Additional Tier 1 Express Lanes
Rail Operations Center (ROC) expansion
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SB1 Impact
The State-approved increase in fuel and other
transportation taxes is expected to direct as much
as $5.9 billion for Metro over the next ten years
(estimated from State-based forecasts)
Provides for both operating and capital investments
Formula share is $2.5B; Competitive is assumed to be
$3.4B
Metros capture of State discretionary programs is based on past
performance & criteria
$1.0B of SB1 anticipated capacity needed to fill the tank
for prior State commitments
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SB1 Impact (10 years)
$8,000
$7,000
$6,000
Assumed
$5,000 Discretionary
$4.9B Available Award
for Additional
($ in millions)
$4,000 Programming
$3,000
Guaranteed
$2,000 Formula
$1.0B to fill
the tank
$1,000
$0
Pre SB1 (prior commitments) Post SB1
Total Pre SB1 (includes previous TIRCP & STA) State Transit Assistance
Local Partnership Transit and Intercity Rail Capital Program
Solutions for Congested Corridors Trade Corridors
State Active Transportation
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Federal Funding Outlook (10 years)
Financial baseline includes $2.0
billion New Starts funding in
FY18-FY22 (5 years) FederalFunding
$14,000
Regional Connector
$12,000
Purple Line Section 1 $10,000
$8,000
Purple Line Section 2 $6,000
($millions)
New funding for Purple Line $4,000
$2,000
Section 3 $0
New Starts funding over ten 5yrTotal
$5,645.6
10yrTotal
$11,876.6
10yrTotal
(w/WSAB)
years: $12,776.6
$3.5 billion adding Sepulveda Pass Discretionary(NewStarts&Other)
Phase 2 Formula(incl.Sec.5337,Sec.5307,CMAQ&RSTP)
Would be $4.4 billion if adding *Other includes TIGER & INFRA
accelerated West Santa Ana Branch
(WSAB) Phase 2 gap closure
schedule
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Fares and Farebox Recovery (10 years)
21.0% $600
20.5%
$500
20.0%
$400
19.5%
$millions
$300
19.0%
$200
18.5%
$100
18.0%
17.5% $0
2020
2021
2025
2023
2024
2026
Budget
Budget
2027
2022
2019
2018
2017
Farebox Recovery Fare Revenue
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Fares and Farebox Recovery (10 years)
Farebox recovery estimated at 19.1% in FY18
budget
Fare revenues projected to grow from $323
million to $520 million over 10 years
Farebox recovery is related to both ridership and fare
revenue
With regard to ridership, Metro has launched a Bus
Reimagining Study to potentially restructure the
system
Right-sized fare structure is assumed in order to
track revenue growth
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State of Good Repair (40 years)
Financial Forecast includes
$36.3 billion of state of ($mil)
Category FY18-FY57
good repair (i.e.,
Rail Facilities $49
replacement and repair)
Heavy Rail Vehicles 1,671
costs
Light Rail Vehicles 6,141
Costs based on Metro Transit
Asset Management (TAM) Rail - Existing Lines 8,069
database (for existing assets Rail - New Lines* 4,491
in service) Bus Fleet 12,153
SGR estimates attached to Bus Facilities 3,718
new infrastructure are
Total $36,292
extrapolations of TAM data
*includes vehicles & BRT lines
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Debt Financing
Financial baseline includes $41.0 billion of sales
tax-and grant-backed debt financing over forty
years
Future debt service expected to increase steadily over
time to match aggressive project delivery schedule
Debt service capped by Debt Policy maximums
Retirement of existing Prop A and Prop C debt offsets
future cash flow impact
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LRTP Baseline Forecast Assumptions (40 Years)
All combined revenues used to fully fund the following
assumed priority expenditures:
Operations associated with existing and expanded system
Sustaining and maintaining existing system and SGR projects for
expanded system
Capital Programs attached to the following commitments:
Measure R Projects & Programs
Measure M Projects & Programs
There is very limited unassigned fund or debt capacity in the
baseline assumptions
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Long Range Baseline Expenditure Forecast
$22,000
$20,000
FY18-FY57
FY18-FY57
$18,000 $41B Total
$49B Total
$16,000
$14,000
($ in millions)
Debt-based
$12,000 capital
expenditures
$10,000
$8,000
Cash-based
$6,000 expenditures
$4,000
$2,000
$0
Debt Service Expense Metro Debt-Financed Capital
Other, e.g., Administrative Costs, Annual Carryover of Grant Allocations Pay-As-You-Go Capital
Operations Unassigned Financial Capacity
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Baseline Funding Capacity Takeaway
All Measure R and M commitments can be
fulfilled under baseline assumptions
This includes inflationary impacts to costs over
40 year period
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Baseline Funding Capacity Takeaway
However, any addition of new projects or
acceleration of existing projects or programs
will require one or more of the following
trade-offs:
Additional debt financing
Cost offsets through innovations, scope changes,
or delivery efficiencies
Reassessment of investment priorities
New, unanticipated revenues
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Managing Risks
Financial baseline is predicated on:
Stable sales tax growth
Containment of operating and capital costs and right-
sized fare revenue
Reliable contributions from Federal and State funding
partners
Any significant loss in revenue or cost increases
will require offsetting action
Apply cost containment policies (Measure R and M)
Delay capital project start-up date
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Next Steps
Metro staff will continue to monitor and update
the long range financial forecast conditions
Sales tax receipts
Federal and State grants
Board-approved changes
Annual budget
As part of the LRTP, staff will recommend
financial scenarios and sensitivity analyses
Evaluate alternative assumptions and their impacts
against the baseline
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Next Steps (continued)
Recommend a 10-year strategy that identifies
and allocates funding consistent with the
LRTP investment plan
Refines priorities for most restricted investment
period
Provides mechanisms to address currently
unfunded, large scale capital projects under
consideration
Creates framework to assess
acceleration/deceleration policy
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