SAN JOAQUIN REGIONAL RAIL COMMISSION FISCAL YEAR 2016/2017 WORK PROGRAM AND BUDGET EXECUTIVE SUMMARY ACE Service: In the past year, ACE ridership has continued unprecedented year over year growth and key efforts must be made in the upcoming year to provide adequate capacity. While some creative, short term solutions may tease out the final existing opportunities, mid and long term planning for new service, stations, parking, shuttles and partnerships is critical. The ACEForward work will continue the environmental, engineering and ridership work to improve the ACE service incrementally to 10 daily round trips, expand the ACE Corridor to serve Modesto, Turlock and Merced. The next several years will also involve increasing coordination with the host railroad and the contract operator for installation of Positive Train Control equipment on the ACE locomotives and cab cars and initial testing of the of PTC on the corridor. Some ACE Service highlights from this current year include:

91.7% On Time Performance

1.3 Million Annual Trips (estimated for June 30th)

Average 5,016 Trips/Day

Fare Revenue 5% Above Projections

Other Projects and Programs: The next phase of the Stockton Track Extension is ready to begin, which extends the safety and operational efficiencies near Cabral Station, demonstrated by the first two completed phases of the project. This phase of the project has the potential to leverage other funding to extend the track even further to the final connection and the Rail Maintenance Facility. The Rail Commission also plays a pivotal role in nearly all rail planning discussions affecting the Central Valley, Sacramento and the East Bay, including the Central Valley Rail Working Group, Altamont (BART/ACE) Working Group, and the HSR project from Merced to Sacramento. The Rail Commission was also recommended to continue on as the Managing Agency for the San Joaquin Intercity Rail Service for an addition three years. Under the direction of the San Joaquin Joint Powers Authority, a new 7

th daily round trip will be

introduced and the first Amtrak operating agreement will be executed, followed immediately by negotiations for the next October 1

st operating agreement.

An extensive, geographically targeted grass roots outreach effort will also be in full swing. Proposed Budget: The 2016/2017 SJRRC/ACE Operating Budget is proposed at $22,683,597 which is a $1,032,297 increase (4.8%) over the prior year, Of this, the significant drivers include:

A $406,700 increase in insurance associated with the increase in ACE ridership

A $240,000 increase in the O&M contract based upon the contractual CPI index

A $173,500 increase in security services / safety programs due to potential impact of increase to minimum wage

A $255,000 decrease in fuel due to economy of bulk purchases

The Capital Budget is proposed at $42,661,203 or an increase of just under $11M from the prior year. The capital program typically fluctuates according to the timing of projects and funding availability. The major project initiatives for 2016/17 include:

Altamont Corridor HSR/Regional Rail EIR/EIS (ACEforward) $9,900,000 Positive Train Control on Locomotives and Cab Cars $2,800,000 Sunol Wayside Horns $800,000 Stockton Station Track Extension $11,863,925

Commissioner, Bob Johnson, Chair, City of Lodi Commissioner, Steve Dresser, City of Lathrop Commissioner, Michael Maciel, Vice-Chair, City of Tracy Commissioner, Vince Hernandez, City of Manteca Commissioner, Moses Zapien, San Joaquin County Commissioner, Christina Fugazi, City of Stockton

Commissioner, Scott Haggerty, Alameda County Commissioner, Bill Harrison, City of Fremont

Executive Director, Stacey Mortenson

The Capital Projects Snapshot (right) reflects anticipated expenditures for the agency’s major capital projects. Staff will continue to focus on these projects, while pursuing resources for other, more conceptual programs and projects. Several programs listed are ongoing, routine investments and therefore do not have a corresponding report in the pages that follow. The Capital Revenues chart (below) shows the relationship between each of the capital projects and the corresponding funding sources.

CAPITAL

PROJECT MEASURE K ACTC

FUNDS CMAQ

CAP &

TRADE

FEDERAL SECTION

5307

FTA SECTION

5309 FUNDS MTC STA

ACEForward 9,900,000

Positive Train Control 2,800,000 890,695

UPRR Capital Access Fee 3,242,516 648,503 2,130,776

UPRR Capitalized

Maintenance Projects 4,000,000 1,465,582 2,000,000

Bond Repayment 3,034,762

Cabral Station Track

Extension 11,863,925 7,113,985 334,065 1,923,756

SJ COG Loan Repayment 1,200,000 240,000

Mid-Life Overhaul Of 1

Locomotive 1,500,000 1,500,000

Rail Maintenance & Layover

Facility 1,020,000 164,000 200,000

E-Ticketing 1,000,000

Capital Spares/ Upgrades 500,000 430,004 61,000

Wayside Horn Project

(Sunol Crossings) 800,000 800,000

San Joaquin Intercity Minor

Capital Projects 1,800,000

TOTALS $42,661,203 $3,838,784 $2,800,000 $8,613,985 200,000 $2,464,841 $1,923,756 61,000

Capital Budgets for 2016/2017

Capital Projects Snapshot - FY 2016/2017

Project Total for

FY 16/17

Pg. 6 ACEForward $9,900,000

Pg. 6 Positive Train Control $2,800,000

Pg. 7 UPRR Capital Access Fee $3,242,516

Pg. 7 UPRR Capitalized Maintenance Projects $4,000,000

Pg. 7 Bond Repayment $3,034,762

Pg. 7 Cabral Station Track Extension $11,863,925

Pg. 8 SJ COG Loan Repayment $1,200,000

Pg. 8 Mid-Life Overhaul Of 1 Locomotive $1,500,000

Pg. 8 Rail Maintenance & Layover Facility $1,020,000

Pg. 8 E-Ticketing $1,000,000

Pg. 9 Capital Spares/ Upgrades $500,000

Pg. 10 Wayside Horn Projects (Sunol Crossings) $800,000

Pg. 10 San Joaquins Intercity Minor Capital Projects $1,800,000

TOTAL CAPITAL PROJECTS BUDGET $42,661,203

5

FEDERAL

SECTION 5337

STATE PROP

1B PTIMESA

STATE

PROP 1A

BOND

REBATE

STATE PROP

1B

STATE PROP

1B SECURITY

STATE INTERCITY CAPITAL

FUNDS

CHSRA

STATE INTERCITY CAPITAL

FUNDS

9,900,000

1,387,000 522,305

463,237

534,418

2,144,790 889,972

2,492,119

960,000

656,000

623,629 376,371

8,996

800,000 1,000,000 1,000,000

$6,154,441 $1,145,934 $2,492,119 $889,972 $800,000 $376,371 $1,000,000 $9,900,000 $1,000,000

2015/2016 MAJOR CAPITAL PROJECTS

ALTAMONT CORRIDOR RAIL PROJECT—ACEforward $9,900,000

In fiscal year 2012/2013, $36.4 million of Proposition 1A funding was allocated in the state budget to the CHSRA for planning for improvements in the Altamont Corridor. To expedite progress in the Altamont Corridor, in June 2013 the CHSRA turned the leadership and management of this Altamont Corridor planning effort to the SJRRC. SJRRC’s focus is on delivering near-term incremental improvements to the existing ACE service that can be achieved by the end of 2019 and by the end of 2023. This work includes planning to connect the ACE service to what will be the northern terminus of CHSRA’s initial operating segment in Merced by the end of 2023 and to improve connectivity with BART (in the Tri-Valley and other potential locations) and other transit services. This program is called “ACEforward”.

SJRRC has progressed the ACEforward Environmental Impact Report (EIR) process utilizing the state CHSRA funds allocated for the Altamont Corridor. SJRRC is the lead agency for CEQA, and the Federal Railroad Administration (FRA) is the federal lead agency for the subsequent NEPA process. The corridor-wide program EIR is for the San Jose – Stockton – Merced corridor, and includes near and mid-term potential incremental improvements for the ACE service. Concurrently SJRRC is also doing the project level EIR work needed to enable increasing ACE service to six-daily round trips by 2019, to extend the ACE service to Downtown Modesto. By the end of 2023, the goal is to extend service to Downtown Merced and have ten-daily round trips.

Alternatives to carry forward in the EIR have been presented to the SJRRC and are available on the ACEforward webpage. The Alternatives include potential new ACE stations at downtown Tracy, West Tracy, River Islands, Manteca Transit Center, downtown Ripon, downtown Modesto, Ceres, Turlock, Livingston or Atwater, and downtown Merced. Initial ACEforward ridership and revenue forecasts and benefits were presented to the SJRRC Board in October 2014. The remaining ridership work is expected to be presented at the July 2016 SJRRC Board Meeting. Detailed engineering and environmental analysis, and additional ridership analysis will be completed by the end of June 2016. The ACEforward Draft EIR is expected to be released by fall-2016.

POSITIVE TRAIN CONTROL $2,800,000

Positive Train Control (PTC) is a federally mandated program put into effect as part of the Rail Safety Act of 2008 and implemented through the Federal Railroad Administration rule making process on January 15, 2010. PTC is a communication-based/processor-based train control technology designed to prevent train-to-train collisions, over speed derailments, incursions into established work zone limits, and the movement of a train through a main line switch in the improper position. PTC is required on all railroad mainlines hauling hazardous material, or having regularly scheduled passenger rail service.

The PTC project for FY 2016/2017 is to purchase and install on-board train equipment on the ACE

locomotives and Cab cars. The cost to modify the ACE locomotives and Cab cars to communicate

with PTC is estimated at $2.5 million. This portion the project is scheduled to be complete by the

May 2017 so interoperability testing can begin with UPRR and Caltrain systems.

UPRR CAPITAL ACCESS FEE $3,242,516

UPRR requires an annual access fee to be paid by all parties for use of their tracks. The Access Fee assessed for the ACE trains are based on ACE’s proportional use of the tracks. Payment of the Access Fee is capitalized using federal formula grants and local funds. A new 10-year agreement was finalized in 2014 and includes the 3rd and 4th trains. Payment is due in January 2017.

UPRR Capitalized Maintenance Projects $4,000,000

As part of the SJRRC/UPRR Trackage Rights Agreement ACE participates in capitalized maintenance projects with the UPRR to ensure service reliability and ride quality and improved operations along the ACE Corridor. ACE contributes $4M to projects annually for projects mutually agreed upon by ACE and UPRR.

BOND REPAYMENT $3,034,762

In November 2010, the agency issued $35,435,000 in bonds to help finance the construction of the ACE Maintenance and Layover Facility. The bonds issuance consisted of two series of bonds: Tax-Exempt Bonds, totaling $7,535,000, and Recovery Zone Economic Development Bonds (RZEDB), totaling 27,990,000. While the Tax-Exempt Bonds issued do not provide a federal subsidy on interest paid to the bond holders, RZEDB’s do provide a 45% subsidy from the federal government on interest paid to bond holders. The bond repayment schedule is a 30-year timeframe, and payments are made semi-annually to bond holders (April and November). Funding for the Bond payments are capitalized using federal formula capital funding, local funds, and the federal subsidy received.

CABRAL STATION TRACK EXTENSION $11,863,925

This is a multi-year project to extend the existing station track north for a direct connection with the Rail Maintenance Facility. This is a multi-year project scheduled to be completed in the summer 2018. Funds budgeted at this time to finalize the engineering for track and signal work, complete of the bid documents and begin construction.

7

SJCOG LOAN REPAYMENT $1,200,000

Re-payment of the Measure K loan from the San Joaquin Council of Governments loan for Construction Costs associated with the ACE Equipment Maintenance Facility.

MID-LIFE OVERHAUL OF 1

LOCOMOTIVE $1,500,000

This project is to complete the overhaul of the final locomotive included in the original contract for the overhaul of 5 ACE locomotives. This final overhaul was delayed due to funding constraints. The overhaul includes; rebuilding the prime mover, replacing head-end power generator sets, upgrading the microprocessor systems, rebuilding electrical system, including components; rebuilding air compressors; performing body work; and repainting locomotives.

RAIL MAINTENANCE & LAYOVER FACILITY $1,020,000

Two important projects at the Rail Maintenance Facility were not able to be completed last year due to funding constraints:

1) Extending the ballast walkways throughout the yard. This facilitates safer, more productive employee movement between switches in the yard, particularly in the early morning and evening train movements 2) Expand the wayside power to all Service & Inspection track. This project is for the design and construction of two wayside power panels to allow the train head end power engines to be shutdown at night saving on fuel, reducing emissions, and decreasing noise levels at the facility.

E-TICKETING $1,000,000

The development of E-ticketing apps and systems allows transit agencies a better way to manage operations more effectively and efficiently and making the ticketing process easier for customers.

E-Ticketing goals for the SJRRC are as follows:

The system must provide the passenger more convenience and time savings than the current method;

The system must provide improved passenger data to SJRRC for safety and security purposes.

After commissioning two different technology studies, the most effective application looks to be an

account-based RFID card passively scanned by virtual gates on the trains, acting as the “tag-on/tag-off”, coupled with directional active scanning by the ACE onboard Passenger Service Agents (PSAs). The funds in this year’s budget are slated for the initial development of the Request for Proposals, equipment list, and integration activities. Total equipment and project management costs for deployment are anticipated to be in the $2.0M range. Staff believes a system could be deployed within 24 months.

CAPITAL SPARES/UPGRADES $500,000

The agency maintains an inventory of spare parts to maintain the ACE passenger cars and locomotives. The inventory of parts is kept to ensure the rolling stock is service-ready at all times. The budget for spare parts is applied toward the replenishment of supplies used to maintain, prevent failures, and extend the life of the equipment. Typical purchases include windows for the cars and locomotives, brake shoes, wheels, reconditioning of brake valves, and system and components for the electrical equipment. This is a recurring line in the Capital Budget.

WAYSIDE HORN PROJECT (Sunol Crossings) $800,000

This is the final year of a multi-year project is to design, engineer and install a wayside horn system at two at-grade crossings in Sunol in Alameda County. The project will decrease the noise level at the Railroad Crossing by focusing the horn noise along the roadway corridor. The total project is estimated to cost $800,000. Because the project is tied into the Union Pacific Railroad (UPRR) signal system all the design, engineering and installation work will be completed by the UPRR. The project is estimated to be completed by December 2016.

SAN JOAQUIN INTERCITY MINOR CAPITAL PROJECTS $1,800,000

This funding is for small or minor capital, and safety and security projects for the San Joaquin Intercity Service. Projects include but are not limited to; station repairs, repairs at stations, new amenities at stations, equipment modifications, signage along the corridor, fencing along the right-of-way, and new or additional cameras at stations. The funding is an annual allocation from the State and is used only if projects are identified and approved by the SJJPA Board.

9

OPERATING BUDGET Budgets for 2016/2017

2016/17

SJRRC

Operating

Budget

2016/17

ACE

Operating

Budget

2016/17

SJRRC/ACE

Operating

Budget

PROJECT MANAGEMENT, SERVICES, AND SUPPLIES

Salaries/Benefits/Contract Help $332,525 $3,727,501 $4,060,026

Office Expense Postage 32,565 38,285 70,850

Subscriptions/Periodicals/Memberships 6,325

8,825 15,150

Office Equipment/Furniture 31,808

55,470 87,278

Computer Systems 16,915

35,235 52,150

Communications 29,515

80,000 109,515

Motor Pool 19,660

56,610 76,270

Transportation/Travel 6,200

26,550 32,750

Training 6,315

14,085 20,400

Training—Security Grant Funded -

30,000 30,000

Audits Regulatory Reporting 3,900

79,100 83,000

Professional Services Legislative 25,000

75,000 100,000

Professional Services Legal 40,000

50,000 90,000

Professional Services General 41,917

146,273 183,190

Publications/Legal Notices 7,750

12,250 20,000

Taxes Assessments 23,025 - 23,025

Project Management, Services, and Supplies Subtotal $623,420 $4,435,184 $5,058,604

CONTRACTED SERVICES

Maintenance of San Joaquin County Facilities $76,500 $76,500

Maintenance and Improve System Wide ACE Stations - 51,900 51,900

Maintenance of Headquarters Structures/Grounds 68,520 155,460 223,980

ACE Operations & Maintenance - 5,748,550 5,748,550

Consumables/Repair Parts - 1,000,000 1,000,000

Operating Leases 29,500 72,000 101,700

Fuel - 1,579,217 1,579,217

RR Maintenance, Oversight/Dispatching - 1,735,000 1,735,000

Insurance 151,417 2,437,999 2,589,416

Insurance Management Fees 31,500 143,500 175,000

Security Services/Safety Programs 42,785 319,600 362,385

FRA/FTA Drug Testing Program - 6,200 6,200

Community Engagement & Marketing 25,000 340,472 365,472

Special Trains - 317,970 317,970

Passenger Services - 14,500 14,500

Ticketing Services - 472,950 472,950

Professional Services Operations 41,725 295,300 337,025

Communications, Operations - 137,226 137,226

Communications, Wi-Fi - 129,856 129,856

Emergency Ride Home Emergency Bus Bridges - 37,500 37,500

Rail Maintenance Facility - 900,414 900,414

San Joaquin Intercity Rail Operations - -

Contracted Services Sub-Total $466,947 $15,895,814 $16,362,761

SHUTTLE SERVICES - $1,262,232 $1,262,232

TOTAL OPERATING EXPENSES $1,090,367 $21,593,230 $22,683,597

2016/17

SJJPA

Operating

Budget

1,513,160

-

-

-

-

-

12,000

30,000

-

-

20,000

-

50,000

20,000

5,000

-

1,650,160

-

-

-

-

-

-

-

-

20,000

5,000

20,000

1,000,000

-

-

25,000

10,000

-

-

-

46,000,000

47,080,000

$0

$48,730,160

ACE Operating Revenues for 2016/2017

2016/17

SJRRC

Operating

Budget

2016/17

ACE Service

Operating

Budget

2016/17 Combined

SJRRC/ACE Operating

Budgets

San Joaquin County Local Measure K $1,090,367 2,231,841 $3,322,208

Local Transportation Funds (LTF) 3,000,000 3,000,000

Federal Section 5307 —PM 0 -

Federal Section 5307— ADA Set-Aside 0 -

Federal Section 5307— Congestion Mitigation and Air Quality (CMAQ) 0 -

Fare Revenues 8,500,000 8,500,000

ACTC Measure B Local 3,002,697 3,002,697

Santa Clara VTA Local 3,224,089 3,224,089

Transportation for Clean Air (TFCA) 100,000 100,000

SJCOG—State Transit Assistance (STA) Funds 602,908 602,908

MTC—State Transit Assistance (STA) Funds 206,925 206,925

ACTC Measure B Local (Admin fee) 30,000 30,000

Employer Shuttle Contributions 4,800 4,800

Amtrak Thruway Service 75,000 75,000

Special Event Train Tickets & Tickets Sales Others 317,970 317,970

FEMA Security 147,000 147,000

Sponsorship Contribution 0 0

High Speed Rail 150,000 150,000

State Intercity Rail Funds 0 0

TOTAL OPERATING REVENUES $1,090,367 $21,593,230 $22,683,597

The Operating Revenues chart (below) shows the this year’s (2016/2017) budgets for the Rail Commission, the ACE service separately and combined and the San Joaquin Join Powers Authority operating budget.

OPERATING REVENUES

13

2016/17

SJJPA

Operating

Budget

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

48,730,160

$48,730,160

FY 15/16 SJJRC Organizational Chart

Director of Operations

Manager of Community

Engagement & Marketing

Customer Service, Safety

& Security Coordinator

Facility

Watchman

Maintenance Facility

Superintendent

Maintenance

Assistants (4)

Regional Rail Commission

Manager of

Operations

Manager of Facilities

and Equipment

Maintenance

Supervisor

Assistant Manager of

Operations

Transportation

Specialists (2)

Onboard Passenger

Service Agents (7)

Customer Service/Station Ticket Sales

Representatives (6)

Special Groups

Coordinator

Marketing

Coordinator

Marketing

Specialist (ACE)

Marketing

Specialist (SJJPA)

Security Officer

Executive Director

Director of Fiscal Services & Administration

Administrator

Coordinator

San Joaquin

Regional Rail Commission

Senior Planner

Manager of Regional

Initiatives Senior Grants Planner

Staff Accountant

Grants

Assistant Transit

Analyst

Controller

Contracts & Compliance

Assistant (2)

Senior Staff

Accountant

Staff

Accountant

Fiscal

Assistant (3)

Human Resources/

Payroll Coordinator

Office Manager Rail

Maintenance Facility

Office Manager

Agency HDQRTS

Admin Assistant Ticketing Program

(2)

50%

Color Denotes Percentage Dedicated to the SJJPA:

40% 100% 30% 25% 20%

23

Relations And

Outreach Coordinator

Planning Analyst

RESOLUTION RRC-R-15/16

RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE SAN JOAQUIN REGIONAL RAIL COMMISSION ADOPTING THE SAN JOAQUIN REGIONAL RAIL COMMISSION/ACE/SJJPA FISCAL YEAR 2015/2016 WORK

PROGRAM AND OPERATING BUDGET OF $71,413,757 AND CAPITAL BUDGET OF $42,661,203

WHEREAS, the San Joaquin Regional Rail Commission Joint Powers Agreement requires approval of an operating and capital budget each year; and

WHEREAS, the adoption of an operating and capital budget is necessary for obtaining Federal, State and

Local funds to support the San Joaquin Regional Rail Commission; and WHEREAS, the San Joaquin Regional Rail Commission (Rail Commission) Budget incorporates the

operating, shuttle and capital budget for the Altamont Corridor Express (ACE) Service and the San Joaquin Intercity Service; and

WHEREAS, the Rail Commission, ACE and San Joaquin service projects and programs have separate

revenue and expense accounts; and WHEREAS, the Executive Director has prepared and presented an operating budget of $71,413,757 and a

capital budget of $42,661,203 which sets forth the projected revenues and expenses associated with the San Joaquin Regional Rail Commission for Fiscal Year 2016/2017; and

WHEREAS, as part of the budget approval process, the Executive Director is responsible for, and authorized

to implement, the adopted budget; and WHEREAS, there are many business expenses that are routine in nature and are required to conduct the

ordinary day-to-day activities of the Rail Commission, ACE and the San Joaquin service; and WHEREAS, the Executive Director is authorized to make these ongoing expenditures within the approved

levels of the adopted budget; and WHEREAS, all budget increases, amendments, or transfers between major budget categories are submitted

to the Board for approval, and the Executive Director has the authority to transfer funds within a major budget category; and

WHEREAS, revenue and expense reports comparing the cumulative revenue receipts and expenses to the

approved budget are submitted to the Commissioners as part of the monthly meeting packets; and

WHEREAS, these reports provide the Commissioners an opportunity to monitor the budget status regularly throughout the fiscal year and make recommended adjustments when necessary.

NOW THEREFORE, BE IT RESOLVED that the Board of Commissioners of the San Joaquin Regional Rail

Commission approve the Fiscal Year 2016/2017 Work Program and Operating Budget in the amount of $71,413,757 and Capital Budget in the amount of $42,661,203.

PASSED AND ADOPTED, by the San Joaquin Regional Rail Commission this 3rd day of June 2016, by the

following vote:

AYES: NOES: ABSENT: ABSTAIN:

SAN JOAQUIN REGIONAL

ATTEST: RAIL COMMISSION:

_____________________________ ________________________________ STACEY MORTENSEN, Secretary BOB JOHNSON, Chair