January 26, 2006
(For Board: February 10, 2006)

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, January 26, 2006, at 11:00 a.m., Chair Stroeh presiding.

Committee Members Present (8): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Eddie, Murray and Reilly; President Middlebrook (Ex Officio)
Committee Members Absent (1): Director Shahum
Other Directors Present (4): Directors Hernández, Martini, Moylan and Newhouse Segal

Committee of the Whole Members Present (12): Directors Cochran, Eddie, Hernández, Martini, Murray, Newhouse Segal, Pahre, Reilly and Stroeh; Second Vice President Boro; First Vice President Moylan; President Middlebrook
Committee of the Whole Members Absent (7): Directors Ammiano, Brown, Dufty, Kerns, McGoldrick, Sandoval and Shahum

Staff Present: General Manager Celia G. Kupersmith; 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; Budget and Program Analysis Manager and Acting Auditor-Controller Jennifer Mennucci; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Karen B. Engbretson

Visitors Present: Nancy Jones, Public Financial Management

     
1. Ratify Actions by the Auditor-Controller
     
 

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

At the meeting, Nancy Jones described the latest economic news and current interest rates for the District’s portfolio. She reported that the current yield on two-year U.S. Treasury notes has reached the highest rate it has been in the past five years. She highlighted the yield chart included in the staff report, noting that rates for two-year U.S. Treasury notes seem now to be in a trading range rather than steadily increasing. She stated that although the Federal Reserve Bank has increased interest rates 13 consecutive times over the past year, only the short-term and overnight interest rates have been affected, and that now some longer term rates are actually lower than the current overnight rate. She stated that Public Financial Management staff undertook a study of past interest rate trends, and discovered that whenever interest rates increase quickly, they subsequently decrease just as quickly.

Ms. Jones further stated that over the past few months, the Portfolio Manager has been focusing on buying shorter-term securities, with over $30 million of these purchased in the last quarter, at rates ranging from 4.25% to 4.30%. The Portfolio Manager is now investing some of the District’s portfolio in longer-term securities in order to protect the District’s investments in case interest rates turn around and decrease. In summary, she stated that the District’s portfolio is currently well positioned because of a good balance between investments in longer-term securities and funds in shorter-term securities that can be reinvested longer when they mature.

Staff recommended and the Committee concurred by motion made and seconded by Directors MURRAY/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 $29,918.71;
     
  b.
Ratify investments made by the Auditor-Controller during the period December 6, 2005, through January 17, 2006, as follows:
     
     
SECURITY

PURCHASE

PRICE

MATURITY

DATE

ORIGINAL

COST

PERCENT

YIELD

Ranger Funding Company, LLC Commercial Paper
12/28/05
01/18/06
5,524,968.70
4.2750
Federal Home Loan Bank Bonds
12/08/05
10/14/08
4,960,850.00
4.7950
Kitty Hawk Funding Corp. Commercial Paper
12/12/05
01/10/06
7,401,273.70
4.30
Ranger Funding Company, LLC Commercial Paper
12/12/05
12/15/05
3,341,816.02
4.25
GreyHawk Funding, LLC Commercial Paper
12/15/05
01/30/06
3,341,495.73
4.31
Dexia Bank, New York Branch CD
12/22/05
02/01/06
7,389,751.03
4.36
Societe Generale North American Commercial Paper
12/29/05
01/05/06
7,681,571.98
4.30
Wells Fargo Bank North American CD
12/29/05
01/11/06
5,000,000.00
4.30
Bears Stearns Company, Inc. Commercial Paper
01/05/06
01/19/06
7,687,183.78
4.28
CBA (Delaware) Finance Commercial Paper
01/10/06
02/10/06
7,426,142.75
4.34
UBS AG Stamford Connecticut CD
01/11/06
02/17/06
5,000,000.00
4.385
     
  c.
Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between January 18, 2006, and February 13, 2006, as well as the investment of all other funds not required to cover expenditures that may become available.
     
  d.

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

Action by the Board - Resolution

              CONSENT CALENDAR
     
 
AYES (12):  Directors Cochran, Eddie, Hernández, Martini, Murray, Newhouse Segal, Pahre, Reilly and Stroeh; Second Vice President Boro; First Vice President Moylan; President Middlebrook
NOES (0):   None
     
2.
Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares for Six Months Ending December 2005
     
 

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a schedule comparing categories of Bridge traffic for six months ending December 31, 2005.  A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

     
3. Review of Financial Statements for Six Months Ending December 31, 2005
     
  a. Statement of Revenue and Expenses
     
   

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a financial statement entitled, Statement of Revenues and Expenses for Six Months Ending December 31, 2005. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

     
  b. Statement of Capital Programs and Expenditures
     
   

In a memorandum to Committee, Capital and Grants Manager Nina Rannells, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a financial statement entitled, Statement of Capital Programs and Expenditures for Six Months Ending December 31, 2005.  A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

     
4. Public Comment
     
  There was no public comment.
     
5. Adjournment
     
  All business having been concluded, the meeting was adjourned at 11:05 a.m.
     

Respectfully submitted,

/s/ J. Dietrich Stroeh, Chair

Finance-Auditing Committee