Meetings

March 24, 2005
(For Board: April 8, 2005)

REPORT OF THE FINANCE-AUDITING COMMITTEE/
COMMITTEE OF THE WHOLE

Honorable Board of Directors
Golden Gate Bridge, Highway
and Transportation District

Honorable Members:

A meeting of the Finance-Auditing Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Thursday, March 24, 2005, at 10:10 a.m., Chair Stroeh presiding.

Committee Members Present (9): Chair Stroeh: Vice Chair Pahre; Directors Boro, Cochran, Eddie, Murray, Reilly and Shahum; President Middlebrook (Ex Officio)
Committee Members Absent (0): None
Other Directors Present (2): Directors Harrison and Smith

Committee of the Whole Members Present (11): Directors Cochran, Eddie, Murray, Pahre, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
Committee of the Whole Members Absent (8): Directors Ammiano, Brown, Dufty, Hern ández, Kerns, Martini, McGoldrick and Sandoval

Staff Present: General Manager Celia G. Kupersmith; Auditor-Controller Joseph M. Wire; District Engineer Denis J. Mulligan; Secretary of the District Janet S. Tarantino; Attorney David J. Miller; Deputy General Manager/Bridge Division Kary H. Witt; Deputy General Manager/Bus Division Susan C. Chiaroni; Deputy General Manager/Ferry Division James P. Swindler; Deputy General Manager/Administration and Development Teri W. Mantony; Planning Director Alan R. Zahradnik; Public Affairs Director Mary C. Currie; Deputy District Engineer Ewa Z. Bauer; Capital/Grant Programs Manager Nina Rannells; Budget and Program Analysis Manager Jennifer Mennucci; Principal Planner Maurice P. Palumbo; Assistant Clerk of the Board Karen B. Engbretson

Visitors Present: Nancy Jones, Public Financial Management; Rex Clack, Sterling & Clack; David Pilpel, San Francisco Resident

1.  Ratify Actions by the Auditor-Controller
 

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith outlined commitments, disbursements and investments made on behalf of the District. A copy of the report is available in the Office of the District Secretary.

At the meeting, Nancy Jones reported on the latest economic news and described current interest rates in the District’s portfolio. Ms. Jones stated that the Federal Reserve Bank continues to raise interest rates by one-quarter percent each time they meet, which is good news for investors. She also stated that one-half of the District’s portfolio is invested in short-term securities, while the other half is invested in long-term securities. She reported that as of March 23, 2005, the interest rate for two-year U.S. Treasury Bills reached a high of 3.89%. She noted that investments in the Commercial Paper program are taking advantage of these increasing short-term interest rates. She commented that the District will continue to take advantage of short-term investment activity, but she advises waiting two to three months before investing in longer-term securities, because at some point the interest rates will slow down.

Staff recommended and the Committee concurred by motion made and seconded by Directors EDDIE/COCHRAN to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the following actions by the Auditor-Controller:

a. Ratify commitments and/or expenditures totaling $53,030.60;

b. Ratify investments made during the period February 15, 2005 through March 14, 2005, as follows:

Security Purchase Date Maturity Date Original Cost Percent Yield
Yorktown Cap Corp Comm Paper 03/08/05 04/05/05 $7,699,038.51 2.66%
Yorktown Cap Corp Comm Paper 03/10/05 03/21/05 $2,077,076.44 2.53%
FNMA Discount Note 03/10/05 04/01/05 $9,984,111.11 2.60%

c. Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between March 15, 2005 and April 11, 2005, as well as the investment of all other funds not required to cover expenditures that may become available; and,

d. Accept the Investment Report for February 2005 prepared by Public Financial Management.

Action by the Board - Resolution

CONSENT CALENDAR


AYES (11): Directors Cochran, Eddie, Murray, Pahre, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0): None

   

2.a.     Authorize the Transfer of Funds from the Fiscal Year 2005 District Division Operating Budget

to the Fiscal Year 2005 Bus Division Capital Budget Relative to Contract No. 2004-BT-10, Marin County Bus Stop Improvements – Phase II

   
 

In a memorandum to Committee, Auditor-Controller Joseph Wire, District Engineer Denis Mulligan and General Manager Celia Kupersmith reported staff’ s recommendation to approve a budget transfer to account for increased staff cost for work associated with Contract No. 2004-BT-10, Marin County Bus Stop Improvements – Phase II. The report stated that while all work has been completed on the Marin County Bus Stop Improvements project, the construction encountered delays due to the extended time to obtain an encroachment permit from the State of California, Department of Transportation, as well as work delays due to inclement weather. The report also stated that staff recommends a transfer of $5,856.30 from the Engineering Department Operating Budget in the District Division to the Bus Division Capital Budget for Contract No. 2004-BT-10. A copy of the report is available in Office the District Secretary.

At the meeting, Chair Stroeh requested that staff prepare a recommendation for a future meeting of the Committee to allow budget transfers in such small amounts as this one to be under the General Manager’ s authority, rather than requiring action by the Board of Directors.

Staff recommended and the Committee concurred by motion made and seconded by Directors COCHRAN/SHAHUM to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the transfer of funds from the Fiscal Year 2005 District Division Operating Budget to the Fiscal Year 2005 Bus Division Capital Budget, relative to Contract No. 2004-BT-10, Marin County Bus Stop Improvements Phase II, in the amount of $5,856.30, for expenses related to staff time, effective March 25, 2005; with the understanding that requisite funds are available for this transfer in the Fiscal Year 2005 District Division Operating Budget.


Action by the Board - Resolution
NON-CONSENT CALENDAR

AYES (11): Directors Cochran, Eddie, Murray, Pahre, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0): None

   

3.a.     Authorize Filing Grant Applications with the Federal Transit Administration for

Fiscal Year 2005 Sections 5307 and 5309 Capital Assistance

   
 

In a memorandum to Committee, Capital and Grant Programs Manager Nina Rannells, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff ’s recommendation for approval to file Section 5307 and Section 5309 grant applications with the Federal Transit Administration (FTA) for Fiscal Year 2005 federal capital assistance funds. The report stated that the Metropolitan Transportation Commission (MTC) has programmed $19,260,266 in Fiscal Year 2005 to support implementation of seven new and ongoing District transit capital projects. These grant funds are earmarked through the Section 5307 Federal Urbanized Area Formula Program, the Section 5309 Federal Capital Program, the Transportation Enhancement Activity Program, the Surface Transportation Program and the Federal Congestion Mitigation and Air Quality Improvement Program. The report stated that these grant funds require a District local match of $4,675,754.

The grant funds will be used for the following new and ongoing capital projects:

1. Ferry Replacement;
2. Ferry Fixed Guideway Connectors;
3. Ferry Major Components Rehabilitation;
4. Ferry Channel Dredging;
5. Bus Radio System Replacement;
6. Particulate Matter Trap Retrofits; and,
7. Merchant Road Improvements.

As background, the report noted that MTC, in partnership with Bay Area county congestion management agencies and local transit operators, has developed a multi-modal approach to programming the above-described federal grant funds to high-priority transit, bicycle, pedestrian and roadway projects. Once these funds are programmed by MTC, individual transit agencies must secure the funds through grant application and execution of a grant funding agreement with the FTA. The report further stated that staff recommends approval to submit the District’s Fiscal Year 2005 Section 5307 and Section 5309 grant applications to the FTA to secure these federal capital funds in the amount of $19,260,266. A copy of the report is available in Office the District Secretary.

Staff recommended and the Committee concurred by motion made and seconded by Directors SHAHUM/REILLY to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the General Manager to file Section 5307 and Section 5309 grant applications with the Federal Transit Administration for Fiscal Year 2005 federal grant funds available to support various capital projects.

Action by the Board – Resolution
NON-CONSENT CALENDAR


AYES (11): Directors Cochran, Eddie, Murray, Pahre, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0): None

   

3.b.     Authorize Filing a Grant Application with the State of California, Department of Transportation, for

Fiscal Year 2005 Federal Operating Assistance Funds to Support West Marin Bus Service

   
 

In a memorandum to Committee, Capital and Grant Programs Manager Nina Rannells, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff ’s recommendation for approval to file Section 5311 grant applications with the State of California, Department of Transportation (Caltrans) for Fiscal Year 2005 federal operating assistance for Golden Gate Transit Bus Route 63. The report stated that Route 63 provides regularly scheduled weekend public transit service between the West Marin community of Stinson Beach and Marin City. The report stated that this intercity service is eligible for Federal Non-Urbanized Area Formula Program operating support authorized pursuant to Section 5311 of Title 49 of the United States Code. The report also stated that these Section 5311 funds are programmed annually by the Metropolitan Transportation Commission (MTC) and are administered through a grant application and an agreement with Caltrans. The maximum allowable operating subsidy of 50% has been provided by MTC from the Federal Non-Urbanized Area Formula Program annually since Fiscal Year 1996 to support Route 63.

The report further stated that staff recommends approval for staff to file the Section 5311 grant application with Caltrans, including related certifications and assurances, in order to secure Federal Non-Urbanized Area Formula funds in the amount of $47,000 to provide operating support for Route 63. It is further recommended that the General Manager be authorized to execute a related grant funding agreement and that the Auditor-Controller be authorized to submit invoices for project funding reimbursement. A copy of the report is available in Office the District Secretary.

Staff recommended and the Committee concurred by motion made and seconded by Directors SHAHUM/REILLY to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the following actions related to $47,000 Federal Non-Urbanized Area Formula grant funds programmed to provide Fiscal Year 2005 operating support for Golden Gate Transit Bus Route 63:
a. Authorize the General Manager or her designated representative to file and execute applications to the State Department of Transportation for West Marin Bus Route 63 operating assistance support;
b. Authorize execution of related annual certifications and assurances, including attachments that the State Department of Transportation may require before awarding a Federal Assistance Grant or Cooperative Agreement, by the General Manager and Attorney for the District;
c. Authorize the General Manager or her designated representative to execute a related grant and cooperative agreement with the State Department of Transportation; and,
d. Authorize the Auditor-Controller or his designee to submit invoices for project funding reimbursement.

Action by the Board – Resolution
NON-CONSENT CALENDAR

AYES (11): Directors Cochran, Eddie, Murray, Pahre, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0): None

   
4. Approve Renewal of the Boiler and Machinery Policy Relative to the Property Insurance Program
   
 

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to approve renewal of the remaining element of the Property Insurance Program, the Boiler & Machinery policy. The report stated that the other two elements of the Property Insurance Program, the Bridge Physical Damage and Use and Occupancy policy and the District Buildings and Facilities policy, were approved for renewal by the Committee at its March 10, 2005 meeting, and by the Board of Directors at its March 11, 2005 meeting. Renewal of the Boiler & Machinery policy was continued to this meeting of the Committee to allow time for further negotiations with the carrier by Marsh Risk & Insurance Services (Marsh), the District’s insurance advisors. The report included a detailed stated on the Boiler & Machinery policy prepared by Marsh. The report stated that staff and Marsh recommend that the District renew the Boiler & Machinery policy with Hartford Steam Boiler, at a premium of $2,729, which was negotiated down from the previously quoted price of $2,925.

The report further stated that the Fiscal Year 2005 impact of the three recommendations would increase expected Fiscal Year 2005 expenses by approximately $75. A copy of the report, including the Marsh report, is available in the Office of the District Secretary.

Staff recommended and the Committee concurred by motion made and seconded by Directors EDDIE/COCHRAN to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors approve renewal of the Boiler and Machinery Policy relative to the Property Insurance Program with Hartford Steam Boiler Company, providing coverage for breakdown of equipment, including all boilers, fired storage water heaters, fired coil water heaters, electric steam generators, sandblasting equipment and all metal unfired pressure vessels used as air tanks, which objects require city and state inspection and certification, with a limit of liability of $1 million per accident and a deductible of $1,000 per accident, at a premium of $2,729, for a one-year term, effective April 8, 2005; with the understanding that requisite funds are available in the Fiscal Year 2005 Operating Budgets for the Bridge, Bus, Ferry and District divisions and that requisite funds will be budgeted in the appropriate division operating budgets for Fiscal Year 2006.

Action by the Board - Resolution
CONSENT CALENDAR

AYES (11): Directors Cochran, Eddie, Murray, Pahre, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0): None

   
5. Approve the Setting of a Public Hearing Relative to a Proposed July 2005 Bus, Ferry and Paratransit Fare Increase
   
 

In a memorandum to Committee, Planning Director Alan Zahradnik, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith presented staff’ s recommendation to set a public hearing on April 21, 2005, for the purpose of receiving public comment relative to increasing Golden Gate Transit (GGT) bus, ferry and paratransit fares by 5%, effective July 1, 2005, in order to meet operating expenses.

The report stated that the District is in the midst of a financial emergency that has resulted in developing strategies to reduce costs and increase revenues. These strategies are currently being re-evaluated in the context of new financial projections that factor in recent cost reductions and the latest estimates of bridge toll and transit fare revenues. Staff anticipates that since bridge and transit user fees represent the majority of District revenues, further increases in fees will be a component of the new plan. In this regard, staff has developed a proposal to continue the practice of annually increasing transit fares to meet operating expenses.

The report described the rationale in proposing a 5% fare increase, noting the following circumstances: (1) the District’s projected budget shortfall of $8 million in Fiscal Year 2006 and $108 million over five years; (2) annual cost inflation, resulting in higher transit costs; (3) low fare recovery due to decreased transit ridership from a variety of factors; and, (4) development of a Comprehensive Transit Fare Program, which will restructure the existing complex fare structure. Since it is not possible to implement these comprehensive changes to the fare structure prior to July 2005, staff is recommending that bus, ferry, and complementary ADA inter-county paratransit fares be increased by 5% effective July 1, 2005, in order to allow for structural changes to be made in the future.

The report further stated that it is recommended that a public hearing be held on Thursday, April 21, 2005, at 9:30 a.m., in order to receive public comment on the proposal to increase transit fares. The report noted that the proposed fare increase would only apply to GGT regional bus routes, and that if approved, staff will request that the Marin County Transit District consider taking concurrent action to raise local Marin bus fares. A copy of the report is available from the Office of the District Secretary.

At the meeting, Celia Kupersmith summarized the staff report, noting that staff is recommending that the District continue its past practice of annual fare increases coinciding with the start of the fiscal year. She noted that while staff is recommending that the public hearing be held in the Board Room, just prior to a regularly scheduled Committee meeting, the Board has the option of setting a hearing in the evening at an alternate location. She further noted that if the 5% fare increase is implemented following the public outreach process, it would result in $600,000 annually in additional revenue for the District.

Discussion ensued, including the following salient points:

Director Eddie inquired as to whether rising fuel costs contributed to the need to increase transit fares. In response, Joseph Wire stated that the cost of fuel is just one element of the total transit costs, and that there is not a one-to-one correlation between fare increases and fuel cost increases. He further noted that in the past, the District’s annual fare increases have not quite caught up with the growth in total transit costs.

Director Shahum suggested that it might be appropriate to combine the fare increase public hearing with the initial public outreach for the Comprehensive Transit Fare Program, currently under development. In response, Ms. Kupersmith stated that the public hearing is legally required for the proposed fare increase, and that other public outreach opportunities relative to fare restructuring will definitely be undertaken once development of the Comprehensive Transit Fare Program is underway.

Director Boro commented that the public is aware of rising fuel costs, and that they should be educated regarding the impact of such rising costs on the District’s transit operations in the context of the necessity of increasing fares.
President Middlebrook noted that it is also important to educate the public on the fact that a 5% fare increase does not match the level of increased transit costs borne by the District.

In response to an inquiry by Director Smith as to whether increasing fuel costs leads to an increase in GGT ridership, Ms. Kupersmith explained that while other transit agencies across the country sometimes experience an increase in transit use when fuel prices increase, GGT has not seen such a correlation.

Public Comment

David Pilpel suggested that the $1.00 discount for Golden Gate Bridge FasTrak users be eliminated on July 1, 2005, the beginning of Fiscal Year 2006, since such a move would generate more revenue than a 5% fare increase.

Staff recommended and the Committee concurred by motion made and seconded by Directors EDDIE/PAHRE to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the setting of a public hearing on Thursday, April 21, 2005, at 9:30 a.m., in the Board Room, Administration Building, Golden Gate Bridge Toll Plaza, for the purpose of receiving public comment relative to a proposal to increase bus, ferry and paratransit fares by 5%, in order to meet operating expenses, effective July 1, 2005.

Action by the Board – Resolution
NON-CONSENT CALENDAR

AYES (11): Directors Cochran, Eddie, Murray, Pahre, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0): None

   
6. Discussion and Possible Action Relative to a Restructured Transit Fare Program
   
 

General Manager Celia Kupersmith introduced the topic of discussion relative to a restructured Golden Gate Transit (GGT) Regional Bus and Ferry Fare program. Ms. Kupersmith stated that the PowerPoint presentation provided at this meeting would be a continuation of what was provided at the Committee ’s March 10, 2005 meeting regarding the development of a restructured transit fare program. She noted that while staff had presented an aggressive goal in the Strategic Plan for Achieving Long-Term Financial Stability to generate $10 million over five years from fare increases, it now may be more appropriate to seek additional revenue from other sources rather than relying on annual fare increases over the next five years.

Planning Director Alan Zahradnik presented to the Committee a PowerPoint presentation regarding fare restructuring, fare recovery policy and fare increases. The presentation included a summary of the prior presentation and discussion that took place at the Committee ’s March 10, 2005 meeting. Mr. Zahradnik outlined possible improvements to the regional bus and ferry fare system suggested by staff, including the following:

Continue distance-based, regional bus fares but reduce number of fare zones from 10 to 5 to better reflect the cost of service and location of bus yards.
Establish “flat” bus fares for travel within each County and remove the Marin local fares from the zone fare matrix. Continue local fare pricing in cooperation with the local bus transit agency and at a premium level if appropriate.
Establish one set of fares for Golden Gate Ferry regularly scheduled services by increasing the Sausalito ferry commuter fare to the level of the Larkspur ferry to better reflect the cost structure of the ferry system.
Establish uniform definitions for bus and ferry discount fare categories by changing the youth age range for ferry to match that of the bus and increasing the youth discount to 50% so special ferry family and group fares can be eliminated.
Adopt Translink as the regional transit cashless fare instrument. Maintain current cash fare discounts to encourage implementation. Reconsider discount policy at a later date.
Consider offering bigger discounts in off-peak periods to encourage off-peak travel and benefit low income riders, smooth out ridership peaks and reduce need for more expensive peak bus and ferry services – all toward improving service efficiency.
Consider “value pricing” within the regional bus service: for example, charging less for slower, indirect, all day basic bus services than for faster, direct, peak express bus service.

Mr. Zahradnik presented several slides regarding fare recovery goals for the District, in the context of fare recovery goals set by comparable transit agencies in the Bay Area and across the United States. He noted that the current fare recovery for GGT bus service, excluding Marin County Transit District (MCTD) local service, is at 22%, and projected to decrease to 20% in the next fiscal year due to higher costs and lower ridership. He also noted that the current fare recovery for GGT ferry service is 40%, and projected to increase to 43% in the next fiscal year due to slightly higher ridership. He noted that in order to achieve the current goal of 33% for bus service, fares would have to be increased by 25%, which would likely have a negative impact on ridership. He further explained how much fares would need to be increased, and for how long, in order to achieve the proposed fare recovery goals of 50% for ferry and 25% for bus.

Mr. Zahradnik also provided several charts and graphs regarding transit ridership trends from the 1970s to the present. He described key factors influencing transit ridership and explained the relationship between fare increases and ridership, noting the following points:

In a growing travel market, fare increases may slow ridership growth but will not stop growth.
In a declining travel market, fare increases may speed the ridership decline and fare reductions may slow the decline but will not stop the decline.
If customers are satisfied with service, they will pay a higher fare to preserve it.
If customers are not satisfied with service, they will not pay a higher fare to preserve it unless they have no other choice.

He noted that the District must keep in mind that there is a certain threshold of fare levels which transit riders will tolerate, and that when that point is crossed, ridership will decrease.

He also noted the following critical factors in developing a specific fare increase program, as follows:

Over the next five years, transbay bus ridership is not likely to grow and, at best, may stay constant.
Over the next five years, ferry ridership may grow, but will be constrained by lack of peak vessel capacity and parking at Larkspur Ferry Terminal.
Without significant growth in regional bus and ferry ridership during the five year fare program, fare increases will result in reduced ridership.
Under new contract, fares on 20 MCTD local and four transition local Marin bus routes will be under MCTD control by the end of Fiscal Year 2006. Any changes to fares on District regional bus routes for intra-Marin trips must be coordinated with MCTD.

In conclusion, Mr. Zahradnik noted the next steps in the development of a long-term fare program, including revising transit cost and fare recovery estimates based on the Fiscal Year 2006 budget, reconsidering the fare revenue generation target for the Strategic Plan for Achieving Long-Term Financial Stability, coordination with GGT partners and extensive public outreach, with the goal of implementation of a restructured GGT Regional Bus and Ferry Fare program scheduled for early 2006. A copy of the presentation is available in the Office of the District Secretary.

Discussion ensued, including the following salient points:

President Middlebrook made the following comments and inquiries:

  • She inquired as to whether the concept of value pricing for off-peak or basic bus service would be considered in the near future. In response, Mr. Zahradnik stated that if such pricing strategies are implemented, it would require basic changes in the Translink system design.
  • She requested clarification as to why Vallejo Ferry, the District’s closest ferry service peer operator in the Bay Area, had such a higher fare recovery rate than the District ’s rate. In response, Mr. Zahradnik and Ms. Kupersmith explained that the Vallejo Ferry, with a farebox recovery rate of 70%, has less service, fewer vessels and does not operate and maintain ferry terminal facilities on the same scale as the District’s facilities located at Larkspur and San Francisco, and as a result does not have the same kind of operating costs as the District.
  • She noted that a farebox recovery rate is a function of the amount of fares collected, combined with transit operating costs and suggested that staff investigate how transit costs have continued to increase over time.
  • She suggested that staff revisit the question of a cap on the transit subsidy from Bridge tolls, noting that the District has a responsibility to all of its customers, including toll payers.
  • She inquired as to the level of cost inflation that the District has experienced in recent years. In response, Joseph Wire explained that over the past four years, cost inflation has remained steady at 5% each year, with slightly lower inflation rates prior to that period.

Director Reilly made the following comments and inquiries:

  • She inquired as to whether the District would realize any cost savings once Translink is fully implemented for GGT. In response, Mr. Zahradnik stated that such a cost analysis was performed, with the conclusion that the District may achieve some cost savings in the long term, but not in the short term. Ms. Kupersmith noted that in a similar fashion to the District’s experience with FasTrak, Translink will make it easier for transit customers to pay their fares, but will not necessarily result in cost savings to the District.
  • She inquired as to the highest level farebox recovery rate that the District has reached in the past. In response, Mr. Zahradnik stated that in the 1970s, the District set and reached a farebox recovery rate of 50%.

Director Shahum suggested that when staff is comparing fare recovery rates between the District and other peer transit agencies, staff should include comparisons with other agencies that operate services similar to the District’s local transit services which we operate for Marin County Transit District.

Directors Murray, Harrison and Reilly suggested that the following items be added to the list of key factors influencing transit ridership, depicted on slide 9 of the presentation:

  • Director Murray suggested that factors such as the state of the Bay Area economy and the effect of tourism on bus ridership be added.
  • Director Harrison suggested that factors such as increasing gasoline costs and the growing availability of high gas mileage hybrid vehicles be added.
  • Director Reilly suggested that the changing work patterns among Marin County commuters due to the aging Baby Boomer generation reaching retirement age be added.

Director Murray made the following comments:

  • She stated that it would be appropriate to survey the District’s transit users regarding their attitudes toward using transit, perhaps using focus groups.
  • She noted that the County of Marin provides its employees with a pre-tax benefit of a 50% discount as an incentive to use transit to commute to work.

Director Boro made the following comments and inquiries:

  • He noted that the number of transit riders is directly related to the number of buses operating in revenue service.
  • He inquired as to whether staff continues to analyze all bus runs for the highest possible productivity. In response, Mr. Zahradnik stated that service is continually adjusted to meet demand, and that at present there are less buses in revenue service due to reduced demand.
  • He expressed his concerns that the District’s embedded transit costs are still high while ridership is decreasing, and emphasized the need to reduce those embedded costs.

Director Smith suggested that the District consider possible retail uses of its ferry terminals, and as an example, cited the success of the farmers’ market at the San Francisco Ferry Building.

Director Harrison noted that with regard to future provision of local bus service in Marin County, whether such service is provided by the District through contract with MCTD or by another transit provider, local buses will still use bus stops and terminals maintained by the District. Ms. Kupersmith stated that the issue Director Harrison mentioned, as well as the fact that approximately one million local transit riders use GGT regional buses, would be issues for the boards of both the District and MCTD to discuss in the future.

Director Eddie stated that since the District’s transit service has to compete with San Francisco employers that provide free or subsidized parking for their commuters, perhaps the District can provide more amenities onboard its buses, such as wireless laptop internet access, in order to allow commuters to more constructively use the time spent commuting on GGT buses. Ms. Kupersmith stated that a local technology company has approached the District with a proposal to provide wireless internet access onboard GGT ferries, and that she would provide more information to the Committee as the plan develops.

Public Comment

David Pilpel made the following comments:

  • He noted the significance of the fact that as GGT ridership has decreased, fixed costs have increased.
  • He suggested that GGT use ticket machines instead of ticket agents to sell ferry tickets, as a way to reduce fixed costs.
  • He noted that the fact that most ferry riders are high-income, choice riders could justify charging higher fares for ferry service.
  • He cautioned against offering any discount for all Translink users, as opposed to a discount just for commuters who use Translink, since a broad-based discount would reduce District revenue.
  • He suggested that as full time Bus Operators retire, they be replaced with part-time Bus Operators as a cost-saving measure.
  • He suggested that an off-peak ferry fare be considered.

Action by the Board – None Required

   
7. Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares for Eight Months Ending February 2005
   
 

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided schedules comparing categories of Bridge traffic, Bridge tolls, Golden Gate Ferry patronage and fares, as well as Golden Gate Transit patronage and fares for eight months ending February 28, 2005. Copies of the reports are available in the Office of the District Secretary.

Action by the Board – None Required

   
8. Review of Financial Statements for Eight Months Ending February 2005
   
 

a. Statements of Revenue and Expenses

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided financial statements entitled, Statement of Revenues and Expenses, for eight months ending February 2005. Copies of the reports are available in the Office of the District Secretary.

b. Statements of Capital Programs and Expenditures

In a memorandum to Committee, Capital and Grant Programs Manager Nina Rannells, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided financial statements entitled, Statement of Capital Programs and Expenditures, for eight months ending February 28, 2005. Copies of the reports are available in the Office of the District Secretary.

Action by the Board – None Required

   
9. Closed Session
   
 

Attorney David Miller, at the request of Chair Stroeh, stated that the Committee would convene in closed session to discuss one matter of pending litigation, listed on the agenda as Item No. 9.a.1., George McAnern vs. Golden Gate Bridge, Highway and Transportation District (District).

After closed session, Chair Stroeh called the meeting to order in open session with a quorum present. Attorney Miller reported that the Committee met in closed session, as permitted by the Brown Act, to discuss one item of pending litigation, as listed above. He stated that with regard to Item No. 9.a.1, the Committee is making a recommendation that will be presented to the Board of Directors for discussion and necessary action at its meeting of March 25, 2005.

Action by the Board – None Required

   
10. Public Comment
   
  Public comment was provided under Agenda Item Nos. 5 and 6, as noted above.
   
11. Adjournment
   
  All business having been concluded, the meeting was adjourned at 11:45 a.m.
   

Respectfully submitted,

/s/J. Dietrich Stroeh, Chair
Finance-Auditing Committee
JDS:JST:KBE:kbe