Procesos de evaluación del programa

FY15 revenues of $112.3 million represent 80.6% of the $139.4 million in annual budgeted revenues. Variances by type of revenue and detailed explanations are included below.

Annual

Original Amendments Amended Actual Balance % of Original Budget & Transfers Budget To Date Over/(Short) Budget*

Revenues:

Net Toll Revenue 116,813 - 116,813 90,975 (25,838) 77.9% (1)

Penalties 12,800 - 12,800 13,597 797 106.2% (2)

Fees 4,000 - 4,000 2,936 (1,064) 73.4% (3)

Development Impact Fees 3,500 - 3,500 3,548 48 101.4% (4)

Interest Earnings 2,316 - 2,316 1,292 (1,024) 55.8% (5)

Total Revenues 139,429 - 139,429 112,348 (27,081) 80.6%

Description

San Joaquin Hills Transportation Corridor Agency FY15 Budget to Actual Revenues

Nine Months Ending March 31, 2015 ($000)

(1) At the end of the third quarter of FY15, the agency recorded net toll revenue of $91.0 million or 77.9% of the annual budget. As a result of the conversion to AET and the resulting shift in payment patterns, including some patrons who may have previously paid with cash but are now initially identified instead as pursuable violation transactions, included in Net Toll Revenues are tolls identified during the violation process that were appropriately reclassed to Net Toll Revenue. See further discussion in Note (2) below. Approximately $5.6 million in tolls were reclassed as of the end of the third quarter.

(2) Penalties were budgeted for FY15 at $12.8 million. Actual year-to-date revenue received totaled $13.6 million, or 106.2% of the budget. The primary reason for the variance is that violation revenue is recorded as collected, and it increased following the AET conversion. The amounts collected from pursuable violations have been inflated, as many of the customers who previously paid cash at the toll booths have generated image-based transactions that must be pursued through the violation process. As a result, the toll amounts collected from these customers have been reclassified as toll revenue. However, additional violation penalty amounts have been collected during the first nine months of the fiscal year despite the

implementation of a policy to waive penalties for first-time violations. The agency continues its efforts in signing former cash patrons up for accounts and informing infrequent users of the available payment options in order to avoid handling through the violation process. However, violations were trending upward prior to the AET implementation and it appears the impact of the improving economy on local traffic has influenced the continuing trend seen in violations.

(3) Fees were budgeted for FY15 at $4.0 million. Actual year-to-date revenue received totaled $2.9 million, or 73.4% of the budget. This category consists primarily of FasTrak account maintenance fees and is near target.

(4) Development Impact Fee collections received totaled $3.5 million, representing 101.4% of the annual budget. Development impact fees, assessed on new residential and non-residential (commercial, industrial, etc.) development, are highly cyclical as they are based on market conditions. The increase in collections is mainly due to collections on commercial projects in San Clemente, Laguna Hills, and Irvine, and multi-family housing in Newport Beach.

(5) Interest earnings for the fiscal year are lower than budget at $1.3 million, or 55.8% primarily due to investments in special purpose securities at 0% interest to comply with tax laws after the November 2014 bond refinancing was completed under very favorable market conditions.

Uses Summary

FY15 actual uses on an accrual basis of $58.5 million represent 51.1% of the $114.6 million annual amended uses budget. Variances by use and explanations of any significant variances are provided below. A detailed expense report by category follows the summary explanations.

Prorated

% of % of Amended

Amends Annual Amended Original Prorated Budget vs

Original & Amended Actual Balance Budget Budget Amended Actuals Budget Transfers Budget To Date Remaining Used* Used Budget Variance

Administration:

Nonoperating Administration 2,217 916 3,133 741 2,392 23.7% 33.4% 2,350 1,609 Toll Operating Adminstration 5,052 45 5,097 3,195 1,902 62.7% 63.2% 3,823 628 Total Administration 7,269 961 8,230 3,936 4,294 47.8% 54.1% 6,173 2,237 (6) Planning, Environmental and Construction 1,582 205 1,787 654 1,133 36.6% 41.3% 1,341 687 (7) Toll Operations:

Customer Service and Toll Compliance 5,337 254 5,591 4,164 1,427 74.5% 78.0% 4,193 29 Toll Systems 809 299 1,108 468 640 42.2% 57.8% 831 363 Toll Facilities 431 (6) 425 178 247 41.9% 41.3% 319 141 Operations Equipment 917 - 917( ) 770 147 84.0% 84.0% 688 (82) Total Toll Operations 7,494 547 8,041 5,580 2,461 69.4% 74.5% 6,031 451 (8) Debt 96,497 - 96,497 48,367 48,130 50.1% 50.1% 48,367 - (9) Total Uses 112,842 1,713 114,555 58,537 56,018 51.1% 51.9% 61,912 3,375

*75% Target as of end of third quarter

Description

San Joaquin Hills Transportation Corridor Agency FY15 Budget to Actual Uses

Nine Months Ending March 31, 2015 ($000)

(6) Total Administration expenditures were $3.9 million or 47.8% of the $8.2 million annual amended budget. The variance of $2.2 million between the prorated amended budget and year-to-date expenses in this category is explained as follows:

• Salaries, benefits, employer taxes, and temporary help are approximately $314,000 lower than the prorated amended budget. A total of thirteen positions were unfilled for all or part of the fiscal year, mainly due to turnover and recruitment, and three employees were out on disability.

• Insurance is lower than the prorated amended budget by $102,000 primarily due to the self-insured retention that has not been used and renewals of other policies that came in under budget. In addition, the November 2014 bond refinancing eliminated the requirement for one policy.

• Legal Expense is lower than the prorated amended budget by $504,000 primarily due to legal costs that had been budgeted in relation to the SJHTCA refinancing in the event that the transaction was not completed during the year. The refinancing was completed in the second quarter of the fiscal year and these costs were recorded as part of the cost of issuance of the bonds.

• The Board of Directors approved budget amendments for the Consulting and Other Services category of $900,000 for rating agency costs related to the refinancing in July, $28,000 to fund the increase in the TTI consulting contract in August, and $33,000 in November for investment advisory services which started in the third quarter. However, this category is lower than the prorated amended budget by $1.3 million primarily as a result of costs that were budgeted for the SJHTCA refinancing in the event that the transaction was not completed during the year. The refinancing was

completed in the second quarter of the fiscal year and these costs were recorded as part of the cost of issuance of the bonds. Also, various projects in this category are scheduled to occur later in the fiscal year.

• Marketing is higher than the prorated budget by $100,000 due to the prepayment of fourth quarter media in March. The agency expenses these items rather than recording a prepaid expense unless their term falls between two fiscal years. This item is considered on track with the annual budget.

• Several expenses including Board Compensation, Telephone/ Communications, Office Expense, Education, Seminars and Memberships, Publications and Subscriptions, Transportation and Travel, Office Equipment, and Pacifica Fixed Assets comprise $161,000 of the remaining Administrative Expenses that are under the prorated amended budget. These expenses are incurred on an as needed basis or are scheduled to occur later in the fiscal year.

(7) Expenditures in the Planning, Environmental and Construction categories totaled $654,000 or 36.6% of the $1.8 million amended budget. The variance of $687,000 between the prorated amended budget and actual results to date is a result of the following:

• The Strategic and Policy Planning Study-AET is under the prorated amended budget by $100,000 with expenditures through the third quarter of $579,000, or 64.0% of the $905,000 amended budget. The on-road testing and final acceptance phase of AET is near completion and the agency is currently testing and tuning the on-road systems prior to final acceptance which is expected to be complete in the fourth quarter of the fiscal year.

• The expenditures for Other Planning, Environmental, and Construction are under the prorated amended budget by $587,000. The majority of this variance relates to the timing of the signage enhancement project, which will be expended in FY15 and FY16. Also, funding for miscellaneous right-of- way work, and various habitat management activities for the agency’s open space parcels occur at various times throughout the year or on an as needed basis.

(8) FY15 actual expenses for Toll Operations of $5.6 million were under the prorated amended budget by $451,000 and are 69.4% of the $8.0 million annual amended budget. Toll Operations consists of costs associated with toll collection services, toll systems, toll facilities, customer service, toll compliance, and toll equipment. Other toll operations expenses are spent as needed or are incurred at specific times of the fiscal year.

• Customer Service and Toll Compliance expenditures were at 74.5% of the amended budget. Various costs in this area have been higher during the post-

AET transition period and relate to the increased volumes of customer calls, violations notices processed, and One-Time-Toll payments. These costs include additional contract labor for the call center for which $248,000 was approved by the Board of Directors as a budget amendment in August. The contract labor has not been at full staffing levels therefore offsetting increased costs for credit card processing fees and for postage to mail violation notices. These costs are continuing to be closely monitored.

• The Board of Directors approved two budget amendments for the Toll Systems category in August totaling $299,000 for auxiliary toll system equipment maintenance not covered under the installation contract and AET transitional contract labor office equipment. However, Toll Systems is lower than the prorated amended budget by $363,000, at 42.2% of the amended budget due to the delay in final system acceptance of on-road systems. Under the installation contract, systems maintenance fees are not paid until after system acceptance which is now expected to take effect in the fourth quarter of the fiscal year.

• Toll Facilities is lower than the prorated amended budget by $141,000, at 41.9% primarily due to energy and water conservation efforts taken at the toll plazas and ramps, and other projects and maintenance that are incurred as needed or expected to occur later in the fiscal year.

• Transponder Equipment is over the prorated amended budget by $137,000 at 91.8% of the annual amended budget partly due to the timing of transponder deliveries. Transponders are delivered as scheduled, based upon need. This category is considered on track with the annual budget.

• Toll Equipment expenditures are under the prorated amended budget by $55,000 with expenditures at 19.2% of the annual amended budget. The Customer Service portion of the computer upgrade project was canceled due to the timing of the Customer Service Operations procurement. In addition, server replacements are scheduled for late in the fiscal year, and the purchase of a facilities truck has been postponed to FY16.

(9) FY15 Debt of $48.4 million represents 50.1% of the annual amended budget. Debt is lower than budget due to the refinance completed in November 2014. The agency budgets and makes debt payments as scheduled.

CONCLUSION:

Through the end of the third quarter of Fiscal Year 2015, the San Joaquin Hills Transportation Corridor Agency received a total of $112.3 million in revenue or 80.6% of the annual budget. Net Toll Revenue, Penalties, and Development Impact Fees were above target at 77.9%, 106.2%, and 101.4%, respectively. Fees and Interest Earnings were below target at 73.4% and 55.8%, respectively.

Total uses were $58.5 million or 51.1% of the annual amended budget at the end of the third quarter of the fiscal year. Administration, Planning, Environmental and Construction, Toll Operations, and Debt were below the annual amended budget at 47.8%, 36.6%, 69.4%, and 50.1%, respectively.

Annual % of % of Original Amendments Amended Actual Balance Budget Budget

Category Budget & Transfers Budget To Date Remaining Used* Remaining

Administration:

Regular Salaries & Temporary Help 2,090 - 2,090 1,377 713 65.9% 34.1% Board Compensation 78 - 78 33 45 42.3% 57.7% Benefits 836 - 836 506 330 60.5% 39.5% Employer Taxes 40 - 40 28 12 70.0% 30.0% Insurance 854 - 854 538 316 63.0% 37.0% Legal Expense 880 - 880 156 724 17.7% 82.3% Telephone/Comm 44 - 44 22 22 50.0% 50.0% Office Expense 129 6 135 70 65 51.9% 48.1% Educ, Seminar, Membership, Mtgs 67 - 67 32 35 47.8% 52.2% Consulting & Other Services 978 961 1,939 198 1,741 10.2% 89.8% Marketing 728 - 728 646 82 88.7% 11.3% Publications & Subscriptions 7 - 7 2 5 28.6% 71.4% Rents & Leases 386 - 386 289 97 74.9% 25.1% Transportation & Travel 78 - 78 27 51 34.6% 65.4% Office Equipment 58 - 58 9 49 15.5% 84.5% Pacifica Fixed Assets 16 (6) 10 3 7 30.0% 70.0% Total Administration 7,269 961 8,230 3,936 4,294 47.8%(6) 52.2% Planning, Environmental and Construction:

Capital Improvement Plan (CIP):

Strategic & Policy Planning Study (AET) 700 205 905 579 326 64.0% 36.0% Total Capital Improvement Plan 700 205 905 579 326 64.0% 36.0% Other Planning, Environmental and Construction:

Environmental 179 - 179 49 130 27.4% 72.6% Design/Program Mgmt 158 - 158 26 132 16.5% 83.5% Design Special Studies & Other 240 - 240 - 240 0.0% 100.0% ROW Acquisitions, Appraisals & Other 5 - 5 - 5 0.0% 100.0% Other Construction SJH 300 - 300 - 300 0.0% 100.0% Total Other Planning, Environ and Construction 882 - 882 75 807 8.5% 91.5% Total Planning, Environ and Construction 1,582 205 1,787 654 1,133 36.6%(7) 63.4% Toll Operations:

Customer Service & Toll Compliance 5,337 254 5,591 4,164 1,427 74.5% 25.5% Toll Systems 809 299 1,108 468 640 42.2% 57.8% Toll Facilities 431 (6) 425 178 247 41.9% 58.1% Subtotal Toll Operations 6,577 547 7,124 4,810 2,314 67.5% 32.5% Operations Equipment:

Transponder Equipment 818 - 818 751 67 91.8% 8.2% Toll Equipment 99 - 99 19 80 19.2% 80.8% Total Equipment 917 - 917 770 147 84.0% 16.0% Total Toll Operations 7,494 547 8,041 5,580 2,461 69.4%(8) 30.6% Debt 96,497 - 96,497 48,367 48,130 50.1%(9) 49.9% Total Uses 112,842 1,713 114,555 58,537 56,018 51.1% 48.9%

*75% Target as of end of third quarter

125 Pacifica, Irvine, CA 92618 949/754-3400 FAX 949/754-3467

DATE: May 14, 2015

TO: Foothill/Eastern Transportation Corridor Agency Board of Directors San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Coleen Franco, Manager, Contracts and Procurement

SUBJECT: Quarterly Procurement Report