City of Alexandria, Virginia
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MEMORANDUM
DATE: SEPTEMBER 4, 2013
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: RASHAD M. YOUNG, CITY MANAGER /s/
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Update on the Implementation of the DASH Efficiency Study Recommendations.
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ISSUE: Update on the implementation of the DASH Efficiency recommendations outlined by City Council during the February 26, 2013 annual stockholder meeting for the Alexandria Transit Company (ATC).
RECOMMENDATION: That City Council endorse the recommendations detailed in this report and authorize the City Manager to execute a Memorandum of Understanding between the City and the ATC Board along the lines of the terms and conditions outlined in this report.
DISCUSSION: At the February 26 stockholder meeting, Council agreed upon several principles and directed staff to work with ATC to develop a Memorandum of Understanding (MOU) that includes a detailed implementation plan. The agreed upon principles were intended to improve the accountability and transparency of the structure, but insure that the operational strengths of the system remained intact. The principles included:
§ Expand the ATC Board to include additional transit and finance expertise, combined with more City government representation;
§ Increase the Board's role to include broader transit policy, including the high capacity transit corridors and DOT Paratransit;
§ Review the management services agreement with First Transit, which employs the General Manager and Assistant General Manager, and explore how the structure could be modified to provide a direct line of reporting between the General Manager and the ATC Board:
§ Consider a professional services contract with outside vendors to provide staff augmentation or other services as needed; and
§ Maintain the subsidiary corporation, Transit Management of Alexandria, Inc., (which employs all of the DASH employees, including bus operators, mechanics, supervisors and managers, and support staff).
As described in the July 10, 2013 memorandum to City Council, City and ATC staff and management, including the ATC Board Chairman have met about weekly since the February stockholder meeting, with the goal of developing an MOU that addresses the above principles. Through those weekly meetings, the City and ATC have agreed to the following:
1. The ATC Board will be expanded to nine members, including two additional City staff positions. Positions will include:
a. City Manager or designee*
b. T&ES representative (new)
c. City Finance representative (new)
d. Transportation Commission representative*
e. Resident with transportation expertise*
f. Resident with financial expertise*
g. Three additional residents/riders*
* The current DASH Board has members who meet these criteria.
2. The ATC Board will continue to provide the overall policy guidance for the system and continue to approve and set fare structure and route changes/expansion. The Board functions will be expanded to include:
i. BRT/Transitway operational policy and coordination with other jurisdictions and transit agencies;
ii. DOT Paratransit policy and fares;
iii. Provide recommendation on proposed Metrobus fare and route changes;
iv. Implementation policy considerations associated with transit infrastructure throughout the City (excluding Metrorail).
3. A Board agenda will be developed at monthly City-DASH coordination meetings. The Transit Division Chief will coordinate the agenda and materials with input from DASH and other City divisions, as needed. The General Manager of DASH will continue to (a) serve as the principal transit advisor to the Board on DASH and ATC matters, (b) prepare DASH-related materials, and (c) report on DASH-related agenda items. City staff will take the lead on other transit issues to come before the Board.
4. ATC will be fully transitioned to the City's financial and accounting systems with no shadow system in place by December 31, 2013, with implementation beginning July 1, 2013. The City will provide the necessary financial data from and training for the new system to support the development of DASH reports to the ATC Board. ATC's Director of Finance and Administration will continue to report directly to the DASH General Manager. The City and ATC will evaluate this arrangement after one year and assess whether there has been an improvement in process and coordination between the two agencies. Examples of process and coordination improvements will include:
a. Development of an overall financial plan for the system;
b. Collection and recording of all cash revenue including collections from fareboxes;
c. Timely preparation of the DASH portion of the National Transit Database report;
d. Certified weekly reconciliations of cash receipts;
e. Submission of line item budgets by Object;
f. As a subrecipient of federal grants awarded to the City, full compliance with City laws, policies and procedures for acquisition, accounting, program compliance and ongoing contract administration;
g. Compliance with City Administrative regulations and policies for cash deposits;
h. Timely submission of required documents for Comprehensive Annual Financial Report (CAFR) and external audit requests;
i. Monthly reconciliation of journal vouchers for the Transit Store;
j. Development of detailed cash handling policy, certification that all staff handling cash have read and will abide by City policies and procedures, and implementation of mandatory periodic training for cash handling;
k. Development of detailed policies and procedures for the sales program and notification to City Finance staff of any changes to the program;
l. Reconciliation of monthly physical inventory accounts to Transit Store monthly reconciliation spreadsheet; and
m. Verification of revenues in Accounting system and notification to Accounting of any discrepancies.
5. The City's Chief Financial Officer (CFO) participated in the hiring of the new Director of Finance and Administration. The CFO will play an ongoing role in evaluating the current employee and will participate in the decision-making regarding hiring, evaluation, compensation changes, and termination of any future candidate for the position.
6. To maintain the focus of the Director of Finance and Administration on financial management of the system, the City will support the increase of the existing ATC human resources manager function by 20 hours per week, to the extent permitted by the budget process.
7. ATC will maintain its current planning functions and positions. Currently, the City is co-managing the DASH Comprehensive Operational Analysis with ATC staff. Following the completion of this study, ATC and City staff will meet to discuss how well this partnership worked and whether there is a need to better integrate planning functions and improve coordination.
8. The City and ATC Board are exploring options for modifying the Transit Management Agreement with First Transit, Inc. No change to the subsidiary corporation that employs the rest of DASH's staff is anticipated.
9. Each of the above items will be evaluated by senior DASH and City staff, to include both an interim (January 2014) and annual evaluation (July 2014).
In addition to the action items outlined above, the City and ATC will implement several items approved by the ATC Board, including:
1. Additional reports for Council and staff;
2. Regular monthly meetings between ATC and T&ES staff;
3. Quarterly interagency meetings with ATC, T&ES, Office of Management and Budget, Planning and Zoning;
4. Inclusion of DASH General Manager in high level City meetings, as appropriate. The proposed quarterly interagency meetings should meet this need;
5. Reinstitute regular meetings between ATC and the CFO and their City financial staff designee;
6. Explore additional strategies to engage the public in Board activities; and
7. Amend First Transit Management Agreement so the General Manager and the Assistant General Manager report to the ATC Board, and amend the management contract to provide operational, management, and technical support in order to offer the Board more opportunities to provide guidance to the General Manager in a more direct manner.
BACKGROUND: ATC provides local bus service (DASH) with connections to regional Metrobus, Metrorail, Virginia Railway Express, and other local bus systems. Since the ATC was created 29 years ago, the route network has more than doubled, and ridership has increased fourfold. As Council is aware, the City initiated the DASH Efficiency Study to evaluate the current governance structure, organization, and management practices, and to ensure that there is capacity to accommodate the planned expansion of service. City staff presented the major findings of the DASH Efficiency Study to City Council at the annual meeting of the ATC stockholders on February 26, 2013 (Attachment 1). Since then, City and ATC staff have been meeting regularly to develop an implementation plan for the DASH Efficiency Study recommendations outlined by City Council at that meeting.
The DASH Efficiency Study found that the system has many strengths, including: productivity, flexibility, efficiency, and high staff morale. While the operational and financial performance of DASH is generally excellent, improvements in transparency, accountability, and the level of City involvement were recommended. The City has appropriated $14 million for DASH capital and operating expenses in FY 2014. DASH's operating expenses continue to grow annually, in part due to service expansion and the absorption of the King Street Trolley, and the City has dedicated additional capital funding for DASH expansion through the Transportation Improvement Program. Given the growth of the system, and the associated growth of the City's investment in DASH, the City is seeking greater involvement.
FISCAL IMPACT: The approved FY 2014 budget includes a $10.8 million operating subsidy for DASH, in addition to $3.25 million in local capital funding and $4.05 million in Federal and State grant funding for vehicle purchases. As described above, City and ATC staff agreed that additional administrative support is needed in the form of an additional 20 hours per week for human resources management. The cost of this addition will likely be $50,000 annually.
STAFF:
Mark B. Jinks, Deputy City Manager
Laura Triggs, Chief Financial Officer
Jerome Fletcher, Special Assistant to the City Manager
Richard Baier, Director, Transportation & Environmental Services
Marti Reinfeld, Division Chief, Transportation & Environmental Services
Sandy Modell, General Manager, Alexandria Transit Company
Brad Putzier, Assistant General Manager, Alexandria Transit Company