April 21, 2005

(For Board:  May 13, 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, April 21, 2005, at 10:40 a.m., Chair Stroeh presiding.

 

Committee Members Present (7): Chair Stroeh; Directors Boro, Eddie, Murray, Reilly and Shahum; President Middlebrook (Ex Officio)

Committee Members Absent (2):  Vice Chair Pahre; Director Cochran

Other Directors Present (3):  Directors Harrison, Hernández and Smith

 

Committee of the Whole Members Present (10): Directors Eddie, Hernández, Murray, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook

Committee of the Whole Members Absent (9): Directors Ammiano, Brown, Cochran, Dufty, Kerns, Martini, McGoldrick, Pahre 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; Deputy District Engineer Ewa Z. Bauer; Capital/Grant Programs Manager Nina Rannells; Executive Assistant to the General Manager; Assistant Clerk of the Board Karen B. Engbretson

 

Visitors Present:   Nancy Jones, Public Financial Management; Shannon Terry, Claims Management, Inc.

 

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 increasing interest rates over the past two months have led to a more positive economic outlook.  She stated that despite the fall in the market experienced on April 18, 2005, the District’s investment advisor believes that it is a temporary condition in the market and that the economy continues to grow.  She stated that it is anticipated that the Federal Reserve Bank will continue to raise interest rates by one-quarter to one-half percent when they meet in May and June.  She commented that the District’ s portfolio manager advises to continue to take advantage of short-term investment activity due to the sharp increase in interest rates, and waiting several months before investing in longer-term securities.  She noted that the portfolio manager purchases short-term securities that are timed to mature one day after the Federal Reserve Board of Governors meet, in order to reinvest the funds with a newly increased interest rate.

 

Discussion ensued, including the following:

 

  • Director Boro noted that Alan Greenspan of the Federal Reserve Bank appeared before the U.S. Senate, stating that unless deficits are held in check and controls placed on spending, the U.S. economy is “headed for complete disaster.”  Director Boro further noted that potential economic disaster would be compounded by proposed energy industry tax breaks of $8 billion.

 

  • In response to an inquiry by Director Smith as to whether the District had investments in oil companies, Ms. Jones replied that according to California state law, the District is prohibited from investing in equities.

 

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:

 

  • Ratify commitments and/or expenditures totaling $49,223.30;

 

  • Ratify investments made during the period March 15, 2005 through April 11, 2005, as follows:

Security

Purchase Date

Maturity Date

Original Cost

Percent Yield

Sheffield Rec Corp. Commercial Paper

03/21/05

04/19/05

2,075,325.20

2.79%

Sheffield Rec Corp. Commercial Paper

03/21/05

04/19/05

5,986,515.00

2.79%

Rabobank US Finance Commercial Paper

04/05/05

06/30/05

7,714,871.85

2.97%

 

  • Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between April 12, 2005 and May 16, 2005, as well as the investment of all other funds not required to cover expenditures that may become available; and,

 

  • Accept the Investment Report for March 2005 prepared by Public Financial Management.

Action by the Board - Resolution

                                                                               CONSENT CALENDAR

 
AYES (10):      Directors Eddie, Hernández, Murray, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0):        None

 

2.            Authorize Filing Grant Applications with the Metropolitan Transportation Commission for Fiscal Years 2006, 2007 and 2008 Federal Transit Administration Section 5307 and 5309 Program, and Surface Transportation Program Funding for Capital and Operating 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 applications with the Metropolitan Transportation Commission (MTC) for Federal Transit Administration Section 5307 Federal Urbanized Area Formula Program (Section 5307), Section 5309 Federal Capital Program (Section 5309) and Surface Transportation Program (STP) funding for Fiscal Years 2006, 2007 and 2008.  The report stated that MTC is now soliciting transit projects for programming the estimated $300 million annual regional apportionment for the next three fiscal years.  This solicitation is the first step in MTC ’s process for allocating annual federal transit administration grant funds to Bay Area transit operators for implementation of new and ongoing transit projects. 

 

The report stated that Section 5307 grant funds are authorized to support public transit activities pursuant to Section 5307 of Title 49 of the United States Code.  Section 5309 grant funds are authorized to support modernization of existing rail systems, new fixed guideway systems and new and replacement buses and facilities pursuant to Section 5309 of Title 49 of the United States Code.  Federal STP funds are available to support various transportation activities pursuant to Section 133 of Title 23 of the United States Code.   In order to be eligible to receive these funds, the District must adopt a resolution in accordance with MTC’s Transit Capital Priorities Process and Criteria, as listed in the staff report. 

The report also stated that District projects eligible to receive the federal grant funds include the following projects in the District ’s 10-Year Capital Plan:

  • Revenue Vehicle Replacements;
  • Fixed Guideway Connectors;
  • Ferry Major Components Replacement;
  • Dredging; and,
  • Preventative Maintenance.

 

The report further stated that staff recommends approval to file applications with MTC for FTA Section 5307, Section 5309 and STP funding for Fiscal Years 2006, 2007 and 2008 in an amount up to $110.9 million, requiring a 20% District local match of up to $21.9 million over the three year programming period, to support implementation of various District projects.   The report noted that annual revenue projections are subject to change and that once actual apportionments are known for each fiscal year, authorization to file grant applications with FTA will be brought forth for Committee and Board approval.  A copy of the report is available in the Office the District Secretary.

 

Staff recommended and the Committee concurred by motion made and seconded by Directors EDDIE/MIDDLEBROOK 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 submit applications to the Metropolitan Transportation Commission (MTC) for Fiscal Years 2006, 2007 and 2008 Federal Transit Administration (FTA) Section 5307 Federal Urbanized Area Formula Program (Section 5307), Section 5309 Federal Capital Program (Section 5309) and Surface Transportation Program (STP) capital and operating assistance funding; with the understanding that the District commits to MTC’s Transit Capital Priorities Process and Criteria, as outlined below:

1.            The District will commit the necessary local matching funds of at least 20% for FTA Section 5307 and 5309 funds, and 11.47% for STP funds;

2.            The District understands that funding for FTA Section 5307 and 5309 and STP programs is fixed at the programmed amount and that any cost increase cannot be expected to be funded from these programs;

3.            If the application is approved, the District will provide assurance to complete the projects, as described in the application, and as programmed in the Transportation Improvement Plan; and,

4.            The District understands that FTA funds must be obligated within three years of programming and that the STP funds must be obligated by September 30 of the year for which the project is programmed in the Transportation Improvement Plan, or the project may be removed from the program.

 

Action by the Board – Resolution

NON-CONSENT CALENDAR

AYES (10):      Directors Eddie, Hernández, Murray, Reilly, Shahum, Smith and Stroeh; Second Vice President Boro; First Vice President Harrison; President Middlebrook
NOES (0):        None

 

 

3.            Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares for Nine Months Ending March 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 nine months ending March 31, 2005.  Copies of the reports are available in the Office of the District Secretary.

 

At the meeting, Celia Kupersmith reported that in response to an inquiry by the Committee at its meeting of March 24, 2005, as to whether rising gasoline prices results in increasing Golden Gate Transit ridership, staff had researched the matter and found that an impact due to rising gasoline prices has not been felt on ridership in the Golden Gate Transit travel corridor.

 

Discussion ensued, including the following:

 

  • In response to an inquiry by Director Murray as to whether the statistics for bus patronage and fares included Marin County Transit District local bus routes, Mr. Wire stated that the staff report includes system-wide bus statistics.  Director Murray requested that the above-mentioned statistics be provided to the Committee in chart form, and in response Ms. Kupersmith stated that staff will provide this information to the Committee in chart form.

 

  • In response to an inquiry by Director Boro as to whether the District has an established goal for FasTrak market penetration among Golden Gate Bridge southbound morning commuters, Mr. Wire replied that while no specific goal has been set, 70% of morning commuters are using FasTrak.

 

Action by the Board – None Required

 

4.           Review of Financial Statements for Nine Months Ending March 2005

 

  • 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 nine months ending March 2005.  Copies of the reports are available in the Office of the District Secretary.

 

 

 

  • 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 nine months ending March 31, 2005 Copies of the reports are available in the Office of the District Secretary.

 

Action by the Board – None Required

 

5.            Review of Auditor-Controller’s Quarterly Report on Authorized Budget           Adjustments and Budget Transfers

 

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported that during the three-month period from January 1, 2005, through March 31, 2005, there were no budget adjustments made.   A copy of the report is available in the Office of the District Secretary.

 

Action by the Board – None Required

 

6.            Review of Auditor-Controller’s Quarterly Report on Contracts and Change Orders/Contract Amendments Executed Under the General Manager’s Authority

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a quarterly report for the months of January, February and March, of Fiscal Year 2005, for all contracts and change orders executed under the General Manager ’s procurement authority, as set forth in the Rules of the Board.  A copy of the report, including attached charts outlining applicable contracts and change orders, is available in the Office of the District Secretary.

  Action by the Board – None Required

 

7.           Closed Session

 

Attorney David Miller, at the request of Chair Stroeh, stated that the Committee would convene in closed session to discuss two matters of pending workers’ compensation litigation listed on the agenda as Item Nos. 8.a.1., James O’Hare vs. Golden Gate Bridge, Highway and Transportation District (District) and 8.a.2, John Youlden vs. 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 the items of pending litigation, as listed above.  Mr. Miller stated that with regard to the workers’ compensation items as noted above, the Committee provided settlement authority for disposition of these matters.

  Action by the Board – None Required

 

8.           Public Comment

 

Public comment was provided under Agenda Item Nos. 5 and 6, as noted above.

 

9.           Adjournment

 

All business having been concluded, the meeting was adjourned at 11:05 a.m.

 

                                                                                                   Respectfully submitted,

 

 

 

 

                                                                                                    J. Dietrich Stroeh, Chair

                                                                                                   Finance-Auditing Committee

JDS:JST:KBE:kbe