August 25, 2006
(For Board: September 8, 2006)

REPORT OF THE GOVERNMENTAL AFFAIRS
AND PUBLIC INFORMATION COMMITTEE/
COMMITTEE OF THE WHOLE

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

Honorable Members:

A meeting of the Governmental Affairs and Public Information Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Friday, August 25, 2006, at 9:30 a.m., Chair Boro presiding.

Committee Members Present (7): Chair Boro; Vice Chair Martini; Director Dufty, McGoldrick, Newhouse Segal and Reilly; President Middlebrook (Ex Officio).
Committee Members Absent (2): Directors Kerns and Sandoval
Other Members Present (7): Directors Cochran, Eddie, Grosboll, Hernández, Moylan, Pahre and Stroeh

Committee of the Whole Members Present (14): Directors Cochran, Dufty, Eddie, Grosboll, Hernández, Martini, McGoldrick, Newhouse Segal, Pahre, Reilly, and Stroeh; Second Vice President Boro; First Vice President Moylan; President Middlebrook
Committee of the Whole Members Absent (5): Directors Ammiano, Brown, Kerns, Murray and Sandoval

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; Director of Risk Management and Safety William L. Stafford Marketing and Communications Director Kellee J. Hopper; Real Estate Specialist Norma Jellison; Assistant Clerk of the Board Karen B. Engbretson; Executive Assistant to the General Manager Amorette Ko;

Visitors Present: William G. Hooper, Clear Channel Outdoor; Stephen R. Shinn, CBS Outdoor


1.	Status Report on State/Federal Legislation

	General Manager Celia Kupersmith reported on the status of the following federal legislation:

	Water Resources Development Act/Larkspur Ferry Channel Dredging: She reported on the reauthorization of the Water Resources Development Act (WRDA), which includes language that calls for the U.S. Army Corps of Engineers (Corps) to study the feasibility of taking on permanent responsibility for the dredging of the Larkspur Ferry Channel. She stated that there has been little activity on this bill in Congress since her last report to the Committee, and that staff will continue to monitor the progress of the WRDA as it moves through the House and Senate Conference Committee.

	Ms. Kupersmith reported on the status of the following state legislation:

	Senate Bill 988 – Ms. Kupersmith reported on the status of Senate Bill 988 (SB 988), the bill that would designate the Golden Gate Bridge as a Safety Awareness Zone. She stated that past bills designating certain highways as double-fine zones have not had the support of the Governor or the State of California, Department of Transportation. She noted that SB 988, in contrast to those past bills, uses the designation of “Safety Awareness Zone,” rather than “Safety Enhancement-Double Fine Zone.” She stated that SB 988 has been passed in the State Senate and is progressing through the legislative process.

	Infrastructure Bonds – Ms. Kupersmith reported on Proposition 1B, the statewide Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006, also known as the Infrastructure Bonds. She stated that staff will prepare a recommendation for the District to take a formal position of support for the Infrastructure Bonds, which will appear on the November 2006 statewide ballot. The recommendation will be presented to the Committee at its September 22, 2006 meeting, and if it is approved by the Committee, it will be presented for action by the Board of Directors at its September 22, 2006 meeting.

2.	Approve Actions Relative to Request for Proposals (RFP) No. 2007-D-1, Exterior Bus Advertising Services

	In a memorandum to Committee, Marketing and Communications Director Kellee Hopper, Deputy General Manager/Administration and Development Teri Mantony and General Manager Celia Kupersmith provided staff’s recommendation to authorize rejection of all proposals for Request for Proposals (RFP) No. 2007-D-1, Exterior Bus Advertising Services, and to authorize staff to re-advertise the RFP. The report stated that the current contract for exterior bus advertising services expires in mid-October 2006. On June 6, 2006, an RFP was issued for provision of exterior bus advertising services. The RFP provided for a three-year contract, with two optional years to be exercised at the discretion of the District. Proposers were requested to submit two revenue options: 1) a fixed annual guarantee; or, 2) a minimum monthly guarantee with an additional percentage of net advertising revenue (“revenue sharing”). The report also stated that in addition to exterior bus advertising services, staff included in the RFP two options for potential bidders: 1) full exterior bus wrap advertising (limited to two percent of the active fleet); and, 2) ultra king bus wrap advertising. These two options were included to test the market for the amount of potential revenue the District could receive. Eight potential bidders were mailed the RFP and proposals were received from CBS Outdoor (formerly Viacom Outdoor) and Clear Channel Outdoor. The District’s incumbent providing exterior bus advertising services is CBS Outdoor. The report further stated that an Evaluation Committee and the Attorney met to review each proposal. Based on the review of the proposals and the application of the evaluation criteria established in the RFP, consideration was given to recommend executing an agreement with one of the companies using the fixed annual guarantee structure, which would result in a new contractor being hired. Based on further analysis by staff, it was believed that a revenue sharing option might be a more beneficial financial arrangement for the District. Unfortunately, one proposer made an error in its revenue sharing proposal that resulted in submission of a third alternative compensation proposal. Upon the advice of the Attorney, the third alternative compensation proposal cannot be considered, based on requirements established in the RFP. Staff recommends that the Board: 1) authorize rejection of all proposals for RFP No. 2007-D-1 in order that staff can revise the original RFP to request an additional alternative compensation proposal in order to maximize the potential advertising revenue; and, 2) re-advertise the RFP. A copy of the report is available in the Office of the District Secretary and on the District’s web site. At the meeting, Celia Kupersmith summarized the staff report, noting that the Board has directed staff to seek revenue generation strategies to help address the five-year $87 million budget deficit. She stated that exterior bus advertising is an example of a revenue generation opportunity that does not impact toll payers.

	Public Comment

	Stephen R. Shinn, CBS Outdoor noted that his company has provided exterior bus advertising services for the District since it launched bus advertising in 1996. He stated that CBS Outdoor supports the staff recommendation to re-advertise the RFP to seek a new revenue sharing option. William G. Hooper, Clear Channel Outdoor provided a letter to the Committee that outlined his company’s position on the staff recommendation. He stated that his company had made the error in the revenue sharing proposal that was described in the staff report. He also stated that the third alternative compensation proposal was not intended to be a mistake, but had been included as an improvement to the proposal. He urged the Committee to consider executing a professional services agreement with Clear Channel Outdoor, allowing for either a modification to its proposal or executing an agreement with Clear Channel Outdoor based on its higher fixed annual guarantee, and then entering into negotiations with his company regarding the revenue sharing option. He expressed his concerns that his company might be placed at a disadvantage if the RFP is to be re-advertised. Discussion ensued, including the following:

	Attorney David Miller responded to the public testimony of William G. Hooper, stating that in his opinion, it would not be legally prudent for the District to accept the proposal from Clear Channel Outdoor based on the claim of an error made on the revenue sharing proposal. He further opined that it would not be appropriate in the framework of the competitive procurement process to condone a modification of a proposal under a situation with a claimed mistake. Therefore, he stated that the proper remedy in this particular situation would be to re-advertise the RFP. Mr. Miller also assured Mr. Hooper that the District will continue to maintain the integrity of the bid process by making sure that the respective proposals that were submitted do not present a disadvantage to either CBS Outdoor or to his company, Clear Channel Outdoor. Mr. Miller advised of the District's intention to withhold information regarding the details of the proposals received in the event requests for such information are made. He advised that this action is intended to maintain the integrity of the competitive procurement process by assuring that neither party to the recent procurement, as well as any new party, obtains no competitive advantage or is disadvantaged as a result of a decision to reject proposals and re-advertise.

	Director Martini stated that in his opinion, the District will be better served by executing a professional services agreement with the proposer with the higher compensation proposal and then negotiating for the higher alternative revenue sharing option, rather than going through the process of re-advertising the RFP. In response, Mr. Miller explained that staff considered the possibility of negotiating with the proposer that had submitted the higher compensation proposal, but found that the proposer is not prepared to execute an agreement based upon the alternative with the higher percentage revenue that was in their submitted proposal. He stated that the District is seeking to avail itself of the highest possible revenue, and to simply execute an agreement based on the fixed annual guarantee structure, would not meet the District’s goals of generating maximum revenue.

	Director Reilly inquired as to whether there would be any financial disadvantage to the District by delaying the contract through the re-advertisement process. In response, Ms. Kupersmith stated that if the Board approves the recommendation submitted by the Committee, staff is prepared to re-advertise immediately, and has a plan for an expedited time frame for submission of proposals. She further stated that although there might be a possibility of a delay before the new agreement is in place, it is more likely that a new agreement will be executed before the current one expires. Ms. Kupersmith noted that over the long-term, it is expected that the District will gain financially from the new exterior bus advertising contract.

	Staff recommended, and the Committee concurred by motion made and seconded by Directors STROEH/MIDDLEBROOK to forward the following recommendation to the Board of Directors for its consideration.

	RECOMMENDATION

	The Governmental Affairs and Public Information Committee recommends that the Board of Directors approve actions relative to RFP No. 2007-D-1, Exterior Bus Advertising Services, as follows:
	a. Reject all proposals for RFP No. 2007-D-1; and, b. Authorize staff to re-advertise the RFP, by revising the RFP to include an additional alternative compensation cost proposal to afford the District the maximum revenue that may be generated by advertising on the exterior of its buses. Action by the Board – Resolution NON-CONSENT CALENDAR

	AYES (14): Directors Cochran, Dufty, Eddie, Grosboll, Hernández, Martini, McGoldrick, Newhouse Segal, Pahre, Reilly, and Stroeh; Second Vice President Boro; First Vice President Moylan; President Middlebrook NOES (0): None

3.	Status Report from the Board Appointee on the San Francisco Bay Area Water Transit Authority (WTA)

	Chair Boro, the San Francisco Bay Area Water Transit Authority (WTA) Board Appointee, provided a status report on recent activities of the WTA. The following items were provided to the Committee of the Whole:
	1. Notice of Cancellation for the August 24, 2006, meeting of the WTA Board of Directors; 2. Notice of Cancellation for the August 9, 2006, meeting of Planning and Development Committee; 3. Notice of Cancellation for the August 8, 2006, meeting of the Administrative/ Finance/Legislative Committee; 4. Agenda for the July 27, 2006, meeting of the WTA Board of Directors; 5. July 2006 CEO’s Report presented to the July 27, 2006, meeting of the WTA Board of Directors; and, 6. Minutes of the June 22, 2006, meeting of the WTA Board of Directors.
	Copies are available in the Office of the District Secretary and on the District’s web site. Chair Boro noted that the August meeting of the WTA Board of Directors has been cancelled and reported on topics discussed at the July 27, 2006, meeting of the WTA Board of Directors. He stated that the cities of Berkeley and Alameda are both interested in having ferry terminals in their particular jurisdictions, and that the WTA is currently studying possible terminal locations in Berkeley and near the Golden Gate Fields race track in Albany. He also reported that the WTA is negotiating with city of South San Francisco and the San Mateo Harbor District regarding the location of a ferry terminal in that city. He noted that the WTA is actively seeking terminal locations and storage berths for the two 150-passenger high-speed ferry vessels, which are anticipated to be launched in 2007. Celia Kupersmith announced to the Committee that WTA Chief Executive Officer Steve Castleberry will be making a presentation to the Committee at its September 22, 2006, meeting, on the topic of transit modes and how transit users’ travel behavior is influenced. Chair Boro recommended that Board members attend that meeting, to learn information about why transit users prefer some transit modes over other modes. Action by the Board – None Required

4.	Public Comment

	Public comment was received relative to Agenda Item No. 2, above.

5.	Adjournment

	All business having been concluded, the meeting was declared adjourned at 10:00 a.m.

Respectfully submitted,

/s/ Albert J. Boro, Chair
Governmental Affairs and Public Information Committee