allocations they make as well as the regional, state and federal level on our behalf. they'll also be looking at establishing an update process so this information just doesn't sit in a book but becomes a regularly updated set of data that we can use. and finally, they're going to look at different measures of effectiveness. how do you measure a state of good repair? what are the metrics that would be used? this is a question that f.t.a. has been asking. they are trying to take an active stance in trying to see what will be useful metrics to measure the ability in order to maintain a state of good repair. now that we have the inventory in place, we're reviewing the assumptions to make sure that within our own data set that they're consistent and reasonable. we're also going through an effort to convert this inventory of 3,000-plus

individual items into capital project that we can rate and evaluate through our capital investment plan. we're linking the project prioritization process for the agency's goals and objectives so that the agency's values are what will be driving the priority of our needs. and we've been utilizing input from stakeholders throughout all of the divisions and functions within the agency to help us with this process. this graphic shows kind of the overall framework for managing our capital assets over the long term. and it starts at the top box with establishing the agency's goals and objectives. we had recently revised those to really focus on what the agency's values are nerms of its capital investments. we're using those to do an initial rating of all of the

individual projects that as mr. ford mentioned we have about 200 projects that we have to evaluate and prioritize. this will feed into the box called tradeoff analysis where we'll be looking at how those priorities best fit the agency's overall goals and tie that to what we anticipate receiving in funding. it feeds back into our two-year budget and also to our short and long-range transportation plans which you adopt on a periodic basis. and then the last few boxes reflect a continuous monitoring and feedback process of, again, we're learning as we go along in improving any of the aspects of our prioritization and analysis as we move forward.

so the thrift of the presentation will focus on some preliminary findings, and each of these bullets that are shown on this slide have a little bit more detail on a subsequent slide. so the first one is the current value of all the agency's assets are about $11 million. so that to re-create the transportation network that we have today from scratch would require about $11 million investment. some good news is that currently most of our assets are within their useful life. so they're not dufort replacement or rehad a bill digs -- not due for replacement or rehabilitation. a little bit of the bad news is that we're nearly $200 -- $2 billion deferred investment, things that should have been replaced or rehabilitated by this point that certainly haven't been. if we look forward over the next 20 years, about a third of

the program would be dedicated to the overhaul and replacement of vehicles. and this includes both the revenue vehicles and any support vehicles. and looking forward over again a 20-year period our average state of good repair need would total $455 million on an annual basis. now, that's that $2 billion backlog as well as to continue to maintain a state of good repair going forward each year. we look at how our assets are divided into different classes. the $11 billion. the largest component overall is the overhead system, and this includes not just the support to the trolly coach but also the l.r.v. system as well. the visible parts that you see, the overhead wires but also the traction power systems in the

substation which are quite high value assets that we're actually in the process of overhauling at this moment. the second category would be the facilities. again, these include the passenger facilities like the stations as well as all of our operating and maintenance facility. and third are all the vehicles, the transit vehicles and all of the support vehicles, 20% of the total assets. when we look at how well we are maintaining a state of good repair, this shows the assets that are within their useful life. this is dollar weighted so, you know, something that's a higher value would influence whether it's achieving the state of good repair more than something of a lower value. so in the top line, the

utilities line, because it's showing that it's 100% on this graph, that means that all of the assets in that category are within their useful life. if you go down to the third line, traction power, only about a third are within their useful life. and, again, we have a capital project that's developing to address some of those needs in the near future. so this gives you a sense of where some of that backlog is and by how much in the various different types of assets that we have. this is another way of looking at that backlog based on the total value. and looking at it today, the top area is in facilities and it's primarily due to the age of the metro stations. these were built in the 1970's and a lot of the components in them are coming dufort their --

due for their rehabilitation cycles. this is the parking facilities, mainly the parking structures, and then, third, is the overhead system that i already mentioned before. next slide shows the -- over the next 20 years we need to invest about $9.1 billion. as i mentioned before, about a third of the programs for vehicles followed by the overhead system and then the facilities. this bar graph shows the different need by asset class. so this is showing how much is needed each year for all the different asset classes. in the early years you can see the blue bar at the bottom is the facilities where we have a significant backlog.

and those bars rise and fall over the years depending on the needs. but the dash line in the middle is that $455 million average over the 20 years. we're showing the backlog here as, you know, spread over the first few years but that's really going to be dependent on the level of funding that we're able to achieve. that backlog just may be pushed out in time. hopefully be reduced over time but it probably -- we wouldn't realize the resources actually address it on the time frame that's shown here. the last chart i'd share with you. looking at that same information but this time looking at the different modes of operation. if we look at the various modes, about 40% of the need is for the rail services. so that would include the l.r.v.'s, the track stations and the operating facilities to

support them. so this inventory is feeding into a larger effort to update our overall capital plan. so in june we had finished the asset inventory, and at this point we're in the process of developing what our capital project list is and beginning to raise each of those projects. in august and into september we'll be analyzing results of the prioritization, applying our funding projection, seeing where we have efficiencies or how well we're able to address our capital needs. as i mentioned before, we'll be submitting our first state of good repair report in august. and submitting our inventory of assets to m.t.c., also, next month. in september, as part of the new starts reporting process, we'll be submitting the

agency's 20-year financial plan and then we'll have the draft of the capital investment plan to bring back to you in october of this year. >> thank you very much for a very comprehensive look at where we're at. chairman nolan: where would the b.r.t.'s fit into this? >> it would be an expansion. chairman nolan: over and above? >> central subway. this is what we currently have under our watch in terms of assets and the status of those assets. >> so future needs is just based on what we currently have, right? >> right. chairman nolan: thank you. members of the boards, question? >> one question, mr. chairman. on page 80 of your presentation the current conditions, most of your graph shows a pretty severe need for capital expenditures in our overhead system. and yet looking on page 8 here, traction power is down at 32%

within design life. and yet substations and overhead, 81%. what comprises the huge chunk of that number? >> i don't have the exact figures here. but i believe that, you know, that 2/3 of the traction power system is driving that to a large degree. the substations and the overhead itself while being relatively low percentage-wise has a fairly high dollar value in terms of the arse etc. and those assets would need to be repaired -- replaced at this time. director beach: ok. i understand the value of overhead and substations. i just find it hard to believe that they are that much higher than a vehicle fleet, although in design life, is not far from being outside that number?

>> yeah. one of the things that we'll be looking to refine in subsequent reports is breaking down these graphs to show, you know, which assets are coming up to their useful life so it's not just a black and white, you're within your useful life or not, but we'll show some progression of how much our assets is less than half, 3/4, coming to the end of the useful life. that will help shed more life on those types of questions. director beach: and i understand what you're effectively being asked to do is a three dimensional graph here which is not easy to do. thank you. chairman nolan: director heinicke. director heinicke: this is a suggestion or request for next time, if possible. these are obviously huge numbers on large-scale projects which are difficult for me and presumably the public to translate to actual service. and one thing that i'm always interested in is, what is -- what effect is our state of good repair in capital system

or asset system having on service today? and so if in the future discussions of our state of good repair we could have some presentation as to the current effect on service, you know, so many runs are being missed or whatever because of state of good reparish use, and here's what we anticipate if we don't do what's suggested here. i think that's a good way to make this understandable to us and so folks understands this isn't just money for building shiny monuments. this is money to keep the system running on time. director beach: exactly. excellent point. chairman nolan: thank you very much. >> next item is the joint powers authority has been hosting several public events leading to an official groundbreaking event on august 11. i believe all of you have been invited to that event. we hope to see you there.

as part of that array of special events, the joint powers authority will close the terminal at midnight and relocate all operations to the new temporary terminal on august 6, 2010. we've been working very closely with the tjpa and the m.t.a. has played a significant role in relocating all transit operations and services. transit services that will be relocated to the temporary terminal include our muney operation, greyhound, golden gate transit. director ford: as it relates to our automatic fair collection program, our pilot program for the clifford is on schedule and moving along quite well. the contractor has delivered the pilot fair collection equipment and recently began installing a new fare at the civic station center. this will be accompanied with three new ticket vending machines and one control terminal at the east end of the civic center station complete installation will take about a

week and shortly thereafter staff will begin testing equipment. the pilot equipment at civic center will be in service on tuesday, august 18. as it relates to our federal transit administration and our funding, we recently received some good news. we received some national recognition. of the $71 million of the m.t.a. received in our funding we have logged nearly $800,000 total job hours under that fund -- 800,000 total job hours under that funding. this ranks sixth among all the transit agencies that received our funding. so out of the largest systems in the country we were ranked number six. and beyond that the m.t.a. ranked number fourth for jobs created or retained in the first quarter of 2010 using these federal funds. the transit capital assistance program, a grant of $85 million, is funding 14 of our transit-related capital projects. and as a result of these funds, 568 jobs were created and/or

sustained including laborors, coordinators, electricians, engineers and expectors, quality control specialists as well as machinists and installers. so we remain committed to working with the federal government to retain and create more jobs and continue our efforts in seeking additional federal funding to support improving the m.t. arment. -- m.t.a. at some point we will be bringing back to the board a status update of the funded projects that we have under way so you'll have an update in terms of what's occurring with that funding at a more practical -- more direct level. you've read and heard a great deal of information of our september 4 service restoration at the st. francis circle project comes to an end, we're simultaneously preparing to restore service to the -- to our pre-- to our service modifications that we reduced

10%. we were planning on restoring. we were planning to restore approximately 6%. and based on some of the planning of our staff, we are going to be restoring a bit more than that. we've modified our service planning strategies to restore approximately 61% of the 10% service that was reduced. and while we have not fully restored the entire 10%, we are going to continue that work and our planning to try and reach a january 1 timeline in conjuncture with the board of supervisors and the mayor's office and the task force that will be created to strive for that target. with that i'd ask john to come before you at this time and present and overview of the service restoration plans. john. >> thank you, mr. ford. mr. chairman, board members, i appreciate the opportunity to come before you to talk to you

about our proposed service restoration plan. before we introduce you to the specifics of it, i just wanted to point out that what we've done in putting the restoration plan together is try to follow the policy guidelines and views you provided us with -- you know, through your leadership over the last several months as we've gone through the budget and service discussions. number one, that as we put back or look to restore service, so in a strategic fashion. we look at the roots, ridership and benefits along those lines. throughout the last several months there have been numerous discussions on audits and our approach to schedule making. of course schedules and the levels of service being the biggest driver. we are following in this particular case and are looking at our plan to restore service,

doing everything we can to write and develop more efficient schedules, particularly as we have heard loud and clear that the discussions that have taken place over the last several months to minimize the amount of stand by time. so that is the second principle . the third principle that we wanted to follow in restoring the service was to make sure that whatever we put back, we have the ability to mana are aw last several months we have gone threw ups and downs in terms of our staffing and manpower. you heard an overview of our entire capital assets and also about our vehicles. so, part of what we are doing here is looking at the service that we can restore and effectively manage at the same time. so, those are the three underlying principles that we followed as we looked at what service to restore.

the highlights of what we are restoring, first of all, we talked about as we went through the difficult decision to curtail service in the first place and where the impact would be. restoring the later hours and the earlier start-ups, particularly on weekends on the community routes. over the last several months monitoring the crowding and bunching on key lines where we spread like the california where we open up the headways a little bit. we looked at following all of those principles. in addition we looked at the way we scheduled the up line, which continues to remain extremely popular and heavyly

traveled. the last thing we did is restore l.r.b. with your approval. so, from a broad brush, that is the approach that we took in order to restore the service. in terms of the second point on the efficiency and where we stand and how much service we are able to put back, you heard this report indicate that we in fact are going a little better than 50% of what was cut. in fact, we are able to get up in terms of hours to just over 6% additional service hours from where we were going from

some 2 million in may to almost 2.4 million in september. so, from that standpoint and most of the restoration approaching 5% is on the bus, the remainder is on the rail. so, in terms of a comparative a nal sis, that is what the hours look like. in terms of how we were able to do this, and the point on the schedule efficiency. i want to draw your attention to a couple of planned numbers that we did for planning purposes. number one, in the drive that you directed us to take to schedule more fulfill, the key indicator there is going down to the bottom under stand by hours, you will see a significant drop.

all we have done is being off work and on pay status to on work and in a vehicle. we were able to do that through more effective and efficient scheduling to enable to add some of the tighter headways back rather than having someone say on the one california be out on the street and go in on a stand by for a couple of hours. to keep the vehicle on the street for the entire time so that allows us to drop stand by number now. the second thing is the number of operators. for the first time we have in several months, i think almost six or five or so. we have an operator class in training right now. we have a second one following. in addition we will have operators from st. francis circle will be available for planing purposes that we should be in relatively good shape in

terms of operators. the other thing from the manager's side, i would remind the board that we, beginning of this month we have a new management tool to control and monitor and plan our day-to-day workforce areas. the point on this is to show that we are able to restore this service through more efficient scheduling. one of the other bigger challenges for us remains our vehicles, both in keeping them in reliable state as well as the numbers themselves. if you take a look, and this goes to where we are following point one of the areas that we will have to watch closely for

example. it points to where we are really driving to add the service where the riders would benefit. the trolley coach fleet is the most difficult for us to keep maintained and is the least reliable. we are going to add a little more service in that area. that is a challenge we have to monitor closely. our numbers show that is the number where the most riders would benefit. we are comfortable. we are looking as an institution to get great support from our colleagues to move this along and that is something else we will watch closely. in terms of where we are at this point, over the last several months when it comes to schedules and service levels, i think we have all become masters of the two-minute drill, if you will. so, once again we are on a very

tight and unforgiving schedule to get this to successful execution. at one point perhaps we are concerned about hand offs from st. francis circle. as you have been briefed that project seems to be proceeding effectively. so, what do we need to do. we will discharge our obligation to meet and confer with t.w. local 250 a. first meetings have been held. we have a deadline of a week from day august 1 to post the sign ups. the sign up needs to be beginning on the 16th of august . and we are looking at engaging and involving the union as part of that effort. we believe as you saw last time that when there are active partners and participants that

the exercise goes well. once again we need to keep them involved and engaged. given the complexity and the size and the scope, it is important to keep on the schedule if we have. with that i would provide you with an overview of our approach to this and make ourselves available for any questions. >> what i would like to do before any questions, as you can see this is something that is hot off of the process in terms of our efforts over the last few weeks and months to try to get to this point. i want to make sure we made the schedules as efficient as possible so that one, we were able to restore the 5% service -- the 50% of the 10% service cut on september 4. we were able to do that because

we received money from the m.t.c., we received money from the transportation authority and identified early on approximately $900,000 in service efficiencies. i asked john and his folks to go even further in terms of looking at our schedules and efficiencies, and we found what appears to be addition 10.1% of the 10% service reduction that we can add back without additional costs. these numbers are rolling all over the place. what it is, is additional efficiencies in the schedule. that 232 hours in terms of stand by on a daily basis is a significant amount of stand by to pull out of this schedule. on a daily basis. 232 hours.

>> thank you. >> given the newness of this, have we had a chance to confer with the t.w.u. about their views of these efficiency changes or that not happening yet. >> it happened today. >> and how do they feel? >> i would say that they were engaged. they raised some issues or concerns with the efficiencies created by the schedules. >> in light of those concerns are you still confident that these can happen and are realistic? >> she could probably give us a more up-to-date and accurate description. >> specifically this was one of a series of