September 22, 2006
(For Board: October 13, 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, September 22, 2006, at 9:00 a.m., Chair Boro presiding.

Committee Members Present (9): Chair Boro; Vice Chair Martini; Director Dufty, Kerns, McGoldrick, Newhouse Segal, Reilly and Sandoval; President Middlebrook (Ex Officio).
Committee Members Absent (0): None
Other Members Present (7): Directors Cochran, Eddie, Grosboll, Hernández, Moylan, Pahre and Stroeh

Committee of the Whole Members Present (16): Directors Cochran, Dufty, Eddie, Grosboll, Hernández, Kerns, Martini, McGoldrick, Newhouse Segal, Pahre, Reilly, Sandoval and Stroeh; Second Vice President Boro; First Vice President Moylan; President Middlebrook
Committee of the Whole Members Absent (3): Directors Ammiano, Brown and Murray

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/Bus Division Susan C. Chiaroni; Deputy General Manager/Ferry Division James P. Swindler; Director of Planning Alan R. Zahradnik; Public Affairs Director Mary C. Currie; Marketing and Communications Director Kellee J. Hopper; Budget and Programs Analysis Manager Jennifer Mennucci; Assistant Clerk of the Board Karen B. Engbretson; Executive Assistant to the General Manager Amorette Ko

Visitors Present: William G. Hooper and Greg Stewart, Clear Channel Outdoor; Steve Castleberry, San Francisco Bay Area Water Transit Authority

     
1. Status Report on State/Federal Legislation
     
  a.
Approve Support of Proposition 1A – Transportation Funding Protection, Legislative Constitutional Amendment and of Proposition 1B – Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006
     
   

In a memorandum to Committee, General Manager Celia Kupersmith provided staff’s recommendation to make an official statement of support for Propositions 1A and 1B, two propositions on the State of California November 2006 ballot.  The report stated that Proposition 1A, Transportation Funding Protection, Legislative Constitutional Amendment, would restrict the ability of the California State Legislature and the Governor to suspend Proposition 42.  Proposition 42 was passed by California voters in 2002 to dedicate most of the revenue from the sales tax on gasoline to the Transportation Investment Fund to provide for improvements to highways, streets, roads and transit systems.  However, Proposition 42 also allowed the transfer of revenue to the Transportation Investment Fund to be suspended when the State of California faces fiscal difficulties, which occurred in fiscal years 2003-2004 and 2004-2005.  Proposition 1A would amend the State Constitution to limit the conditions under which Proposition 42 can be suspended, and treat any suspension of funds as loans to be paid in full within three years of the suspension.  The report stated that it is estimated that Proposition 1A could bring approximately $270 million in annual funding to the Bay Area, and could provide approximately $1.5 million in operating revenue per year to the District.

Also, the report stated that Proposition 1B, Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006, also known as the transportation infrastructure bonds, authorizes the State of California to sell approximately $20 billion of general obligation bonds to fund statewide projects to relieve congestion, improve the movement of goods, improve air quality and enhance the safety and security of the transportation system.  Proposition 1B could provide approximately $4 million per year to the District for capital projects, including the local match to federal transit capital funds, enabling the District to apply to county congestion management agencies for additional Bridge and transit capital funding.

The report further stated that both Propositions 1A and 1B address the significant shortfalls in transportation funding that presently exist on a statewide basis, and if these Propositions receive an approval by the voters of California they will provide critically important new funding opportunities for the District.

It is recommended that the District approve an official position of support for Proposition 1A – Transportation Funding Protection, Legislative Constitutional Amendment, and for Proposition 1B – Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006.

Staff recommended, and the Committee concurred by motion made and seconded by Directors KERN/SANDOVAL 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 support of Proposition 1A – Transportation Funding Protection, Legislative Constitutional Amendment, and of Proposition 1B – Highway Safety, Traffic Reduction, Air Quality and Port Security Bond Act of 2006, issues on the State of California November 2006 ballot.

Action by the Board – Resolution
NON-CONSENT CALENDAR

     
   
AYES (12):  Directors Cochran, Dufty, Eddie, Grosboll, Hernández, Kerns, Martini, Newhouse Segal, Reilly, Sandoval and Stroeh; Second Vice President Boro
NOES (0):   None
     
   
[The above recommendation was forwarded to the Board of Directors meeting of September 22, 2006.]
     
2.
Authorize Execution of a Professional Services Agreement with Clear Channel Outdoor, Inc., Relative to Request for Proposals (RFP) No. 2007-D-3, 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 execution of a professional services agreement with Clear Channel Outdoor, Inc., relative to Request for Proposals (RFP) No. 2007-D-3, Exterior Bus Advertising Services.  The report stated that the Board of Directors, by Resolution No. 2006-071 at its meeting of August 25, 2006, authorized rejection of all proposals received for RFP No. 2007-D-1, Exterior Bus Advertising Services, and authorized staff to re-advertise the RFP.  On August 29, 2006, RFP No. 2007-D-3 was issued for provision of the same exterior bus advertising services that were included in RFP No. 2007-D-1, with the addition of a third pricing structure.  Proposers were requested to submit three revenue options:   1)  a fixed annual guarantee; 2)  a minimum monthly guarantee plus an additional percentage of net advertising revenue; and, 3) a minimum monthly guarantee or a percentage of advertising revenue, whichever is greater as calculated on a monthly basis.  In addition, the RFP provided for a three-year contract, with two optional years to be exercised at the discretion of the District.

The RFP was mailed to eight potential bidders and proposals were received from two companies, CBS Outdoor (formerly Viacom Outdoor) and Clear Channel Outdoor, Inc. (Clear Channel), the same two bidders who had responded to RFP No. 2007-D-1.  The District’s incumbent providing exterior bus advertising services is CBS Outdoor, whose agreement with the District will expire on October 18, 2006.

The report further stated that an Evaluation Committee and the Attorney met to review each proposal, based on the evaluation criteria established in the RFP.  The report outlined in detail the compensation packages provided by each of the proposers and stated that both firms clearly demonstrated their ability and experience in providing exterior bus advertising services, both on a national and state level.  Additionally, both firms were able to provide a work plan, quality control program and maintenance program to meet the District’s requirements.  The report noted that after evaluating the proposed compensation packages, it was determined that the proposal submitted by Clear Channel would offer the best financial benefit to the District, by providing a predictable revenue stream through the minimum monthly guaranteed fee, while potentially achieving additional revenue based on a percentage of advertising sold by Clear Channel.  The attorney for the District has confirmed that Clear Channel properly submitted all forms and documents required by the RFP.

Accordingly, staff recommends execution of a professional services agreement with Clear Channel, on the basis of guaranteed minimum monthly payments or 55% of net advertising revenue, whichever is greater on a monthly basis, for bus side advertising services, full exterior bus wrap services and Ultra King (“Quarter”) wrap services, for a three-year term, with two one-year options, exercisable at the District’s discretion.  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, stating that the proposal submitted by Clear Channel offers the District the most prudent course of action by balancing risk and certainty of revenue.  She noted that Clear Channel’s proposal includes a fixed monthly revenue guarantee totaling $999,996 in the first year of the agreement.  However, if revenues exceed $1,818,175 in Year One, then the District will receive 55% of Clear Channel’s advertising revenue in that particular month.

Staff recommended, and the Committee concurred by motion made and seconded by Directors MARTINI/DUFTY 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 authorize execution of a professional services agreement with Clear Channel Outdoor, Inc., relative to Request for Proposals (RFP) No. 2007-D-3, Exterior Bus Advertising Services, on the basis of guaranteed minimum monthly payments or 55% of net advertising revenue, whichever is greater on a monthly basis, for bus side advertising services, full exterior bus wrap services and Ultra King (“Quarter”) wrap services, for a three-year term, with two one-year options, exercisable at the District’s discretion.

Action by the Board – Resolution
NON-CONSENT CALENDAR

     
 
AYES (13):  Directors Cochran, Dufty, Eddie, Grosboll, Hernández, Kerns, Martini, Newhouse Segal, Reilly, Sandoval and Stroeh; Second Vice President Boro; President Middlebrook
NOES (0):    None
     
 
[The above recommendation was forwarded to the Board of Directors meeting of September 22, 2006.]
     
3.
Report by San Francisco Bay Area Water Transit Authority (WTA) Chief Executive Officer Steve Castleberry Relative to Transit Mode Patterns
     
 

Chair Boro introduced Steve Castleberry, Chief Executive Officer of the San Francisco Bay Area Water Transit Authority (WTA), who provided a PowerPoint presentation relative to transit mode patterns.  Chair Boro stated that at the April 13, 2006 meeting of the Transportation Committee, there had been a discussion as to what factors determine how people select different transit modes, including bus, ferry, train and personal automobile.  He also stated that since the WTA had undertaken studies on traveler attitudes in the Bay Area, he had invited Mr. Castleberry to present the WTA’s findings to the members of the Board of Directors. 

Mr. Castleberry proceeded with the PowerPoint presentation, noting that the WTA’s consultant, Cambridge Systematics, Inc., (Cambridge) prepared a study to forecast potential ferry ridership for planned WTA ferry routes around San Francisco Bay.  He explained that traditional computer models do not reveal traveler attitudes and do not provide any insight into marketing to potential riders.  Mr. Castleberry described how Cambridge used market segmentation to determine traveler attitudes towards various transit modes.  He stated that such a market-based planning process has been successfully used in the private sector, as well as by other transit agencies, such as the Bay Area Rapid Transit District and the San Diego Metropolitan Transit System. 

Mr. Castleberry stated that the WTA undertook several passenger surveys, asking specific questions through which the following significant traveler attitudes were identified:

 
  • Need for flexibility;
  • Sensitivity to personal travel experience;
  • Desire to help the environment;
  • Need for time savings;
  • Insensitivity to transport costs; and,
  • Sensitivity to stress.
     
 

He stated that the sensitivity factors listed above were correlated with demographic data to determine eight different market segments within the total group of Bay Area transbay commuters.  Mr. Castleberry also stated that based on the study data, three of the above factors seemed to be common characteristics of ferry riders: 1)  desire to help the environment; 2)  need for time savings; and, 3)  sensitivity to stress.  He noted that cost did not appear to be a factor that distinguished ferry riders from bus riders or other types of transit users.

Mr. Castleberry displayed charts summarizing the characteristics of each of the eight market segments, which were given distinctive names for the purpose of the study.  He noted that one of the unexpected findings in the study was that most ferry riders are from a middle-income market segment, contrary to the common perception that ferry riders have high incomes.  He also displayed a series of charts that depicted the demographic characteristics of the eight market segments.  Mr. Castleberry noted that this data, which showed the market segments most likely to be ferry riders, could be used for targeted marketing to try to gain new ferry riders.    

 

Mr. Castleberry also displayed a table that provided data for the Larkspur-to-San Francisco commute market, which includes people who live near the Larkspur Ferry Terminal and travel to the San Francisco Financial District by automobile or transit.  He pointed out that contrary to the perception that the market catchment area for the Larkspur Ferry Terminal is saturated with existing ferry riders, the study data showed that there are more than 19,000 residents who currently make automobile trips to San Francisco.  He further noted that members of this market segment, who have a high sensitivity to stress, could become potential ferry riders if their transit stress concerns are addressed in a positive manner.  He also stated that WTA is using new technologies such as “NextBus,” which uses Global Positioning System tracking satellites to provide passengers with real-time vehicle arrival information, as one way to make riding transit less stressful.

In conclusion, Mr. Castleberry described how the market segmentation in the study allowed WTA to identify potential ferry ridership markets and to customize marketing messages in order to gain new ferry riders.  He stated that once all the data from the study is fully analyzed and processed, the WTA will be able to capture the highest number of new ferry riders for the smallest marketing investment.  A copy of the PowerPoint presentation is available in the Office of the District Secretary, as well as on the District’s web site.

Discussion ensued, including the following:
     
 
  • Director Kerns inquired as how the WTA’s passenger surveys were undertaken.  In response, Mr. Castleberry stated that telephone calls were made to a sample of approximately 10,000 people who crossed the San Francisco Bay in order to compile the data used in the study.  In addition, with the help of Bay Area ferry operators such as Golden Gate Ferry, ferry riders were directly surveyed to compile data specific to ferry service.
     
 
  • Director Grosboll inquired as to whether the survey responses included any complaints about ferry service frequency.  In response, Mr. Castleberry stated that contrary to expectations, in general, ferry riders were willing to sacrifice frequency of trips for the lack of stress that is associated with ferry travel.  He also stated that using computer modeling, when trip frequency was increased from one hour to one-half hour or 15 minutes, ridership did not go up significantly enough to balance the cost of extra service. 
     
 
  • Director Reilly inquired regarding as to how the WTA has benefited from county transportation sales tax measures.  In response, Mr. Castleberry stated that with a combination of local sales tax revenues and Regional Measure 2 funding, the WTA has funded 100% of planned ferry service to South San Francisco and Berkeley.  He reported that the design of the South San Francisco ferry terminal has begun, and that the WTA is moving forward with the environmental review process for the Berkeley ferry route.  Mr. Castleberry stated that it is anticipated that the WTA will launch ferry service from South San Francisco and Berkeley in 2010.  He also reported that the WTA has recently contracted with a shipyard to construct two new ferries, which will be the first boats in the WTA’s fleet.   He further stated that the WTA is also beginning the environmental review process for ferry service to Richmond and Hercules, although those routes are not yet fully funded. 
     
 
  • Director Martini inquired as to the relationship among ridership for ferries, buses and trains. In response, Mr. Castleberry stated that the results of WTA’s study found that bus riders are distinct from ferry or train riders and that in general, new ferry service would not take away riders from existing bus service. Mr. Castleberry stated that the WTA was particularly meticulous with regards to its ridership forecasts, to ensure that the forecasts were highly accurate and incontrovertible. He noted that the ridership forecasts were endorsed by the Metropolitan Transportation Commission. He also stated that the ridership forecasts were subject to international peer review, including inspection by a representative of the Federal Transit Administration, who observed that the market segments for commuter rail are very similar to those for ferry.
     
 
  • Director Newhouse Segal inquired as to the costs associated with WTA’s study. In response, Mr. Castleberry stated that the overall study effort, including the passenger survey, ridership forecasts and computer modeling, cost approximately $750,000. Mr. Castleberry also stated that the ridership forecasts will be updated in two to three years when the WTA is ready to launch service in site-specific areas, such as South San Francisco.
     
 
  • Chair Boro remarked that in 1999, when the California State Legislature formed the WTA, the legislature allocated $12 million to the WTA to undertake extensive technical studies that examined ridership demand, cost-effectiveness, vessel design, environmental impacts, safety and operations.  He stated that the study presented today was part of that effort, leading to the WTA’s Implementation Plan, which was certified by California statute in 2003.  He added that during review of the draft Environmental Impact Report (EIR) for the Sonoma-Marin Area Rail Transit, one of the significant issues was whether or not rail service in the North Bay would take away riders from existing bus service.  He noted that it was determined that, similar to the findings in the WTA’s study, different people take different modes of transit for different reasons.  He emphasized the importance of providing as many transit choices as possible.
     
 
  • Director McGoldrick inquired as to the estimated subsidy per rider for ferry service compared to other transit modes in the region.  In response, Mr. Castleberry stated that regional subsidy amounts vary widely depending on geographic area, transit market, land use and population density.  He further stated that in general, the subsidy per rider for ferry is comparable to that for bus, differing between the two modes in any given area by approximately one dollar.  Mr. Castleberry provided the examples of transit subsidies in two geographic areas:  1)  in Berkeley, the subsidy for bus and ferry is approximately $4.00 to $5.00; and, 2)  in Antioch, the subsidy for bus and ferry is approximately $12.00 to $13.00.
     
4. 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, stated that information for this item was provided as part of Item No. 3, Report by San Francisco Bay Area Water Transit Authority (WTA) Chief Executive Officer Steve Castleberry Relative to Transit Mode Patterns

The following items were provided to the Committee of the Whole:
 
  1. Agenda for the September 19, 2006, meeting of the WTA Technical Advisory Committee;
  2. Notice of Cancellation for the September 13, 2006, meeting of Planning and Development Committee; and,
  3. Notice of Cancellation for the September 12, 2006, meeting of the Administrative/ Finance/Legislative Committee.
 

Copies are available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

     
5. Public Comment
   
 

There was no public comment.

     
6. Adjournment
     
 
All business having been concluded, the meeting was declared adjourned at 9:55 a.m.
     

Respectfully submitted,

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