October 26, 2006
(For Board: November 17, 2006)

REPORT OF THE FINANCE-AUDITING COMMITTEE

 

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

Honorable Members:

A meeting of the Finance-Auditing Committee was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Thursday, October 26, 2006, at 10:20 a.m., Chair Stroeh presiding.

Committee Members Present (5): Chair Stroeh; Directors Cochran, Eddie and Reilly; President Middlebrook (Ex Officio)

Committee Members Absent (4): Vice Chair Pahre; Directors Boro, Grosboll and Murray

Other Directors Present (4): Directors Hernández, Martini, Moylan and Newhouse Segal

Staff Present: General Manager Celia G. Kupersmith; District Engineer Denis 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; Public Affairs Director Mary C. Currie; Human Resources Director Larry Daniel; Director of Planning Alan R. Zahradnik; Assistant Clerk of the Board Karen B. Engbretson; Executive Assistant to the General Manager Amorette Ko

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 commitments, disbursements and investments made on behalf of the District.  A copy of the staff 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 quoted a press release from Bloomberg Financial News regarding the decision by the Federal Reserve Bank at its meeting of October 25, 2006, to keep its benchmark interest rate at 5.25%.  She noted that leading Wall Street investment firms have differing opinions as to whether or not the Federal Reserve Bank will increase interest rates at its next meeting on December 12, 2006.  Ms. Jones highlighted a chart in her report depicting yields for two-year U.S. Treasury Notes, which peaked in late June 2006, fell three-quarters of a percentage point until mid-October and then spiked significantly during the past two weeks from 4.5% to 4.9%.  She stated that the investment strategy for the District’s portfolio has been adjusted to meet changing market conditions.  In contrast to the strategy over the past two years to invest in shorter-term securities, the District’s Portfolio Manager is now starting to invest the District’s portfolio in three-year, four-year and five-year securities at higher yields.  Ms. Jones further stated that the District’s portfolio is in excellent shape, with more than half of the portfolio currently earning more than 5%. 

Staff recommended and the Committee concurred by motion made and seconded by Directors COCHRAN/EDDIE 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 for the period September 1, 2006, through September 30, 2006, totaling $11,296.00;
   
  b.
Ratify investments made by the Auditor-Controller during the period September 12, 2006, through October 16, 2006, as follows;
     
SECURITY

PURCHASE

DATE

MATURITY

DATE

ORIGINAL

COST

PERCENT

YIELD

FHLB Disc Note
09/14/06
10/06/06
1,458,386.67
5.16
FHLB Notes (Callable)
09/14/06
02/27/09
4,866,600.00
5.17
Wells Fargo Company Notes
09/22/06
01/15/10
4,850,300.00
5.193

CITIGROUP Funding

Commercial Paper

09/21/06
10/23/06
5,733,120.00
5.27

CBA (DE) Finance

Commercial Paper

10/02/06
10/31/06
4,978,854.17
5.27

UBS Finance Delaware

Commercial Paper

10/02/06
10/24/06
5,232,191.54
5.26

CBA (DE) Finance

Commercial Paper

10/05/06
11/06/06
2,990,008.04
5.26

Bear Stearns Co., Inc.,

Commercial Paper

10/05/06
11/06/06
7,697,976.75
5.26
FHLMC Disc Note
10/06/05
10/31/06
8,312,600.24
5.09
     
  c.
Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between October 17, 2006, and November 6, 2006, 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 September 2006 prepared by Public Financial Management.

Action by the Board - Resolution
CONSENT CALENDAR

     
 
AYES (5):     Chair Stroeh; Directors Cochran, Eddie and Reilly; President Middlebrook (Ex Officio)
NOES (0):     None
ABSENT (4): Vice Chair Pahre; Directors Boro, Grosboll and Murray
     
2.
Authorize Budget Increase Relative to the Award of Contract No. 2007-FT-7, Vessel Refurbishment, to Bay Ship & Yacht Co.
     
 
This item was referred to the Finance-Auditing Committee from the Building and Operating Committee meeting of October 26, 2006, for concurrence with a budget adjustment. In a memorandum to Committee, Deputy General Manager/Ferry Division James Swindler and General Manager Celia Kupersmith reported on staff’s recommendation relative to the award of Contract No. 2007-FT-7, Vessel Refurbishment to Bay Ship & Yacht Co. The report stated that this vessel refurbishment project was included in the FY 06/07 Ferry Division Capital Budget in the amount of $6,500,000, to be funded by 80% Federal Transit Administration grant funds, and 20% District funds. The report further stated that a budget adjustment in the amount of $700,000 is necessary in the FY 06/07 Ferry Division Capital Budget, in order to fully fund the estimated total project cost of $7,200,000 for Contract No. 2007-FT-7. A copy of the staff 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 COCHRAN/EDDIE 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 a budget increase in the amount of $700,000, in the FY 06/07 Ferry Division Capital Budget, to be funded with $560,000 additional Federal Transit Administration grant funds and $140,000 from District reserves, relative to the award of Contract No. 2007 FT-7, Vessel Refurbishment to Bay Ship & Yacht Co.

Action by the Board – Refer to the
Building and Operating Committee Meeting of October 26, 2006

     
  AYES (5):     Chair Stroeh; Directors Cochran, Eddie and Reilly; President Middlebrook (Ex Officio)
NOES (0):     None
ABSENT (4): Vice Chair Pahre; Directors Boro, Grosboll and Murray
     
3.
Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares for Three Months Ending September 30, 2006
     
 

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a schedule comparing categories of Bridge traffic for three months ending September 30, 2006. 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.
Review of Financial Statements for Three Months Ending September 30, 2006
     
  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 Three Months Ending September 30, 2006. 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, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a financial statement entitled, Statement of Capital Programs and Expenditures for Three Months Ending September 30, 2006. 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

     
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 provided a report summarizing budget adjustments and budget transfers authorized by the Board of Directors during the three-month period from July 1, 2006, through September 30, 2006. A copy of the report, including attached charts outlining applicable budget adjustments and transfers, 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 report summarizing all contracts and change orders executed under the General Manager’s procurement authority, as set forth in the Rules of the Board, during the three-month period from July 1, 2006, through September 30, 2006. 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. Public Comment
     
 

There was no public comment.

     
8. Adjournment
     
 
All business having been concluded, the meeting was adjourned at 10:30 a.m.
     

 

Respectfully submitted,

/s/ J. Dietrich Stroeh, Chair
Finance-Auditing Committee