October 13, 2005

(For Board:  October 28, 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, October 13, 2005, at 10:30 a.m., Acting Chair Pahre presiding.

Committee Members Present (8): Vice Chair Pahre; Directors Boro, Cochran, Eddie, Murray, Reilly and Shahum; President Middlebrook (Ex Officio) 

Committee Members Absent (1): Chair Stroeh

Other Directors Present (2): Directors Kerns and Moylan

Committee of the Whole Members Present (10): Directors Cochran, Eddie, Kerns, Murray, Pahre, Reilly and Shahum; Second Vice President Boro; First Vice President Moylan; President Middlebrook

Committee of the Whole Members Absent (8): Directors Ammiano, Brown, Dufty, Hernández, Martini, McGoldrick, Sandoval and Stroeh

 

[On this date, there was one vacancy on the Board of Directors.]

 

Staff Present: General Manager Celia G. Kupersmith; District Engineer Denis J. Mulligan; Auditor-Controller Joseph M. Wire; 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; Public Affairs Director Mary C. Currie; Planning Director Alan Zahradnik; Director of Risk Management and Safety Bill Stafford; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Patsy Whala

Visitors Present:  Anthony R. Withington, President, Amalgamated Transit Union, Local No. 1575
   
1.

Authorize Budget Adjustments in the FY 05/06 Bridge, Bus, Ferry and District Divisions’ Operating Budgets to Correct the CalPERS Pension Rate

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to authorize budget adjustments in the FY 05/06 Bridge, Bus, Ferry and District Divisions’ Operating Budgets, in the total amount of $2,467,400, to correct the California Public Employees' Retirement System (CalPERS) Pension Rate. 

The report stated that the Board of Directors, by Resolution No. 2005-050 at its meeting of June 10, 2005, adopted the FY 05/06 Operating Budget in the amount of $142,298,122.  Following adoption, it was discovered that, due to a misinterpretation of the CalPERS pension rate in the actuarial document, the Operating Budget did not include sufficient funds for the CalPERS employee contribution..  The CalPERS expense is determined by CalPERS and displayed as a percent of salary.  The original rates in the adopted Operating Budget were 7% of salary for the employee contribution and 8.54% for the employer contribution for a total of 15.54%.  The actual rates are 7% for the employee contribution and 15.544% for the employer contribution for a total of 22.544%.  The difference in the overall operating budget is $2.4 million.

The report also stated that due to the significant size of this adjustment, staff recommends including the corrected amount in the FY 05/06 District’s Operating Budget to allow for consistency in forecasts and to facilitate tracking of expenses.  The fiscal impact will increase the FY 05/06 Operating Budget by $2,467,400, resulting in a revised Operating Budget of $144,765,522.  A copy of the report is available in the Office of the District Secretary and on the District’s web site.

             

              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 budget adjustments in the FY 05/06 Bridge, Bus, Ferry and District Divisions’ Operating Budgets, in the total amount of $2,467,400, to correct the CalPERS Pension Rate, as follows:

a.           Increase in the Bridge Division in the amount of $943,600;

b.           Increase in the Bus Division in the amount of $622,100;

c.           Increase in the Ferry Division in the amount of $208,200; and,

d.           Increase in the District Division in the amount of $693,500.

Action by the Board - Resolution

NON-CONSENT CALANDAR

AYES (10):      Directors Cochran, Eddie, Kerns, Murray, Pahre, Reilly and Shahum; Second Vice President Boro; First Vice President Moylan; President Middlebrook

NOES (0):        None

 

[Note:  The above recommendation was forwarded to the Board of Directors meeting of October 14, 2005, for action.]
   
2.

Discussion Regarding a Revised Five and Ten-Year Financial Projection

 

[NOTE:  The following item was taken out of Agenda Item order.]

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith presented a revised report on the District’s financial projection for the five- and ten-year period from FY 06/07 through FY 15/16, to correctly reflect the District’s contribution rates for the CalPERS Pension Plan.  This revision to the original projection increases overall operating expenses.  As a result, the revised five-year deficit is $89 million, and the ten-year deficit is $295 million, compared to the original projection of $76 million and $270 million respectively. 

The report reiterated information provided to the Committee at its meeting of August 25, 2005, as part of the agenda item entitled, Discussion Regarding Updates to the Five- and Ten-Year Financial Projection.  The report included the following sections, as well as a detailed narrative on each of these sections:  Introduction:  What is a Projection?  Why is a Projection Essential; Fiscal Strength of the District; Projection Findings; Assumptions; and, Next Steps; as well as the following Appendices:  Appendix A, Projection; Appendix B, Assumptions; Appendix C, Ten-Year Capital Plan Projection; Appendix D, Capital Contribution Calculation; and, Appendix E, Reserve Structure.  The report incorporated the material change in the five- and ten-year projection figures, noting that the projected ten-year deficit of $295 million is approximately $28 million less than last year’s $323 million estimate.  The projected five-year deficit is $89 million, $19 million less than last year’s $108 million estimate.  The report also noted that the new five-year deficit is an 80% reduction of the original $441 million five-year deficit.  Information supporting these numbers was included in the report and was further detailed in Appendix A, “Revised Operating Budget Projection – With PERS Adjustment.”  A copy of the report is available in the Office of the District Secretary and on the District’s web site.

 

              At the meeting, Joseph Wire summarized the staff report, stating that the revised projection reflects changes in the dollar figures to include CalPERS contributions which will assist staff in analyzing the District’s actual spending and planning efforts throughout the fiscal year.   In addition, Mr. Wire reported that the paychecks for a number of Bus Operators for the last pay period did not properly reflect payroll contributions.  Mr. Wire stated that staff is working with the Amalgamated Transit Union to make them aware of the many steps necessary to execute in order to complete a Bus Driver payroll and to find ways to simplify these steps.  In addition, Staff reported that due to the implementation of the new payroll system, it is necessary that staff develop a plan, including the cross training of Payroll Department staff, to prevent any delay in the processing of paychecks.

              Discussion ensued, including the following:

  • Director Murray inquired if the District has business contingency plans in the event of an interruption.  In response, Ms. Kupersmith stated that the District has contingency plans in place in some areas of the District, but will work with staff to ensure that these plans are in place Districtwide.
  • President Middlebrook recognized that the processing of paychecks can be complicated to implement due to the various terms as set forth in the Bus Operator Memorandum of Understanding and suggested that the District and the Union consider options to make timekeeping less complicated.  In response, Ms. Kupersmith stated that the District and the Union are working collaboratively to explore ways to simplify paycheck processing.

Action by the Board - Resolution

   
3.

Authorize Implementation of a Regional Bus And Ferry Fare Restructure Program and Amend the Master Ordinance 2005

In a memorandum to Committee, Planning Director Alan Zahradnik, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided staff’s recommendation to simplify the District’s regional transit fare system by implementing a regional bus and ferry fare restructure program, changing the District’s current fare ordinance effective December 11, 2005, and amending the Master Ordinance 2005 accordingly. 

The report stated that the District’s current fare structure is complex and difficult to understand, with 300 possible cash fares to choose from in the fare zone matrix.  The fare system and associated policies apply to four inter-related, but somewhat distinct, public transit services: Golden Gate Transit (GGT) regional bus, Golden Gate Ferry (GGF), Marin County Transit District (MCTD) local bus, and GGT bus service across the Richmond-San Rafael Bridge.  The report described how staff developed the fare restructure program, which entailed peer comparison of the fare programs of other public transit operators, staff discussion by the Service Review Committee and outreach to the District’s Bus and Ferry Advisory committees.

The Board of Directors, by Resolution No. 2005-072 at its meeting of August 12, 2005, set a public hearing to receive public comment on staff’s proposal to simplify the District’s transit fare system.  The report described, in detail, the history of the District fare structure, and staff’s proposal consisting of the following changes to the fare program:

  • Consolidate regional bus fare zones 7 and 9 with zone 2; consolidate regional bus fare zone 8 with zone 3; and, eliminate zones 7, 8, and 9 from the regional bus fare matrix.
  • Remove local Marin County bus fares from the regional zone fare matrix and establish a separate fare table for local Marin bus travel.
  • Remove local East Bay and inter-county East Bay bus fares from the regional fare zone matrix; establish a separate table for East Bay bus travel; set the inter-county bus fare from the East Bay to all points in the District’s service area at the current zone 10 to zone 3 fare; and, eliminate zone 10 from the regional bus fare matrix.
  • Redefine the ferry youth fare category from ages 6 through 12, to ages 6 through 18, to be consistent with the current bus youth fare category definition.
  • Increase the discount for the regional bus and ferry youth fare category to 50% of the adult cash fare from the current 25% to be consistent with discounts provided to seniors and persons with disabilities.
  • Eliminate the weekend ferry family fare plan category.
  • Eliminate the ferry children and senior group fare categories.
  • Establish TranslinkP® fares at the current discounted fares rates to position Translink P® as the Golden Gate Transit bus and Golden Gate Ferry regional fare card to eventually replace Bus Ride Value Tickets and Ferry Frequent Rider Tickets and to expand the convenience of pre-paid fares to youths, seniors and persons with disabilities.

The report briefly described the public comments received during the public comment period that was initiated on August 23, 2005, and ended with a public hearing on September 22, 2005.  During this period, the District received 12 e-mails, two letters and oral comments by two individuals at the hearing, for a total of 16 comments.  The report included a detailed list of comments and staff responses.  The report noted that this proposed fare restructure program is statutorily exempt from the California Environmental Quality Act since there is no possibility of significant impact to the environment and any fare increase included with the program is necessary to cover operating expenses. 

The report provided a detailed description of the recommended fare restructure program regarding the regional bus fare zone changes, the youth fare changes, the ferry group fares and Translink®. The report further explained the fiscal impacts of the fare restructure program.  The report further stated that restructure of the existing regional fare system will improve customer convenience while having a minimal impact on existing District transit fare revenues.  A copy of the staff report is available in the Office of the District Secretary and on the District’s web site.

Discussion ensued, including the following:

  • Director Shahum requested clarification regarding the ferry group fares.  In response, Alan Zahradnik stated that staff will manage any special group travel during pre-arranged times and that the established discounted ferry fares will be applied. 

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 the Board of Directors authorize implementation of a regional bus and ferry fare restructure program, changing the District’s current fare ordinance effective December 11, 2005, and amending the Master Ordinance 2005 accordingly, as outlined in the attached Ordinance.

Action by the Board - Ordinance

NON-CONSENT CALENDAR

AYES (10):      Directors Cochran, Eddie, Kerns, Murray, Pahre, Reilly and Shahum; Second Vice President Boro; First Vice President Moylan; President Middlebrook

NOES (0):        None

 

[Note:  The above recommendation was forwarded to the Board of Directors meeting of October 14, 2005, for action.]
   
4.

Closed Session

 

              Attorney David Miller, at the request of Acting Chair Pahre, stated that the Committee would convene in closed session to discuss one matter of pending litigation listed on the agenda as Item No. 5.a.1., Carl Schoelles vs. Golden Gate Bridge, Highway and Transportation District (District).

After closed session, Acting Chair Pahre 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 item of pending litigation, as listed above.  Mr. Miller stated that the Committee provided settlement authority for disposition of this matter.

 

Action by the Board - Resolution

   
5.

Public Comment

There was no public comment.

   
6.

Adjournment

All business having been concluded, the meeting was adjourned at 10:45 a.m.
   

Respectfully submitted,

                                                                                           

Barbara L. Pahre, Acting Chair

                                                                     

Finance-Auditing Committee

                                                                                                                                                                                                                 

Attachment:      Ordinance Relative to Authorize Implementation of a Regional Bus and Ferry Fare Restructure Program and Amend the Master Ordinance 2005