October 12, 2007

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 Friday, October 12, 2007, at 9:10 a.m., Acting Chair Pahre presiding.

Committee Members Present (7): Acting Chair Pahre; Directors Boro, Cochran, Eddie, Grosboll, Middlebrook and Reilly
Committee Members Absent (2): Chair Stroeh; President Moylan (Ex Officio)
Other Directors Present (3): Directors Hernández, Newhouse Segal and Sandoval

Committee of the Whole Members Present (10): Directors Cochran, Eddie, Grosboll, Hernández, Middlebrook, Newhouse Segal, Pahre, Reilly and Sandoval; First Vice President Boro
Committee of the Whole Members Absent (9): Directors Brown, Dufty, Kerns, McGlashan, McGoldrick, Sanders and Stroeh; Second Vice President Ammiano; President Moylan

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; Deputy General Manager/Administration and Development Teri W. Mantony; Manager Business Implementation Marvin Miller; Assistant Clerk of the Board Patsy Whala

Visitors Present: None

     
1.

Authorize a Budget Increase in the FY 07/08 Bus Transit and Ferry Transit Divisions’ Operating Budgets Relative to State Operating Assistance Income

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to authorize a budget increase in the FY 07/08 Bus Transit and Ferry Transit Divisions’ Operating Budgets in the amount of $958,000 and $319,300, respectively, for a total amount of $1,277,300, bringing the grand total amount of FY 07/08 State Operating Assistance Income funds to $16,434,900.

The report stated that the Board of Directors, by Resolution No. 2007-051 at its meeting of June 8, 2007, adopted the FY 07/08 Budget, which included State Operating Assistance Income in the amount of $15,157,600. In September, the Metropolitan Transportation Commission’s (MTC) staff revised the original FY 07/08 fund estimate due to the following: 1) to account for the actual State Transit Assistance (STA) funding level enacted in the FY 07/08 state budget; and, 2) to reflect the distribution of a portion of the MTC region’s STA Spillover funding, pursuant to MTC Resolution 3814. The District’s share of the total increase is $1,612,900.

In accordance with the Agreement with Marin County Transit District (MCTD) for intra-county public bus service, $335,600 of the total increase will be credited back to MCTD to support local transit services and the remaining funds in the amount of $1,277,300 will go towards supporting the District’s bus and ferry transit services.

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/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 a budget increase in the FY 07/08 Bus Transit and Ferry Transit Divisions’ Operating Budgets in the amount of $958,000 and $319,300, respectively, for a total amount of $1,277,300, bringing the grand total of FY 07/08 State Operating Assistance Income funds to $16,434,900; with the understanding that funds in the amount of $335,600 will be credited back to the Marin County Transit District to support local transit services and that funds in the amount of $1,277,300 will go towards supporting the District’s bus and ferry transit services.

Action by the Board at its meeting of October 12, 2007 – Resolution
NON-CONSENT CALENDAR

AYES (10): Directors Cochran, Eddie, Grosboll, Hernández, Middlebrook, Newhouse Segal, Pahre, Reilly and Sandoval; First Vice President Boro
NOES (0): None

     
2.

Authorize the Competitive Negotiation Process for the Procurement of Request for Proposals No. 2008-MD-2, Asset and Vehicle Fluid Management Systems

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to authorize the competitive negotiation process for the procurement of Request for Proposals No. 2008-MD-2, Asset and Vehicle Fluid Management Systems, in accordance with the District’s Procurement Policy and the California Public Contract Code, in lieu of a sealed competitive bidding process.

As background, the Board of Directors, by Resolution No. 2003-106 at its meeting of October 10, 2003, authorized execution of Professional Service Agreements with SunGard/Bi-Tech (SBI) and Spear Technologies, Inc. (Spear), to implement a comprehensive information technology system for the District under Contract No. 2003-D-1, Financial Management System and Other Related Items. To date, the District has implemented all of the major SBI modules and the Spear Materials module.

In December 2005, the District and Spear mutually decided to suspend implementation of the Spear Work Manager/Asset Management System module due to the District’s obligations and to Spear’s desire to redirect its resources to another client. Since that time, Spear has gone through two buyouts. District staff is concerned that Spear may place the District’s software applications into “support mode” with no future enhancements to the product and/or merge the best features of Spear into their core Asset Management product. Due to the possible risks of continuing with Spear, staff is seeking a replacement product to the Spear Work Manager/Asset Management System.

The report stated that staff believes the benefits derived with the use of an automated asset and vehicle fluid management system are substantial, and could save the District as much as $560,000 per year on maintenance costs. The functionality of these systems and the benefits to be derived by the District from implementing these systems are described in detail in Attachment A of the staff report.

There is no fiscal impact associated with this item at this time. The remaining budget for Contract No. 2003-D-1 is $1.3 million. Although basic asset management can be achieved within the provisions of the allocated budget, staff recommends the procurement of an automated asset and vehicle fluid management system. The additional scope of work includes costs associated with software, hardware, configuration, testing and implementation, plus labor and fringe costs for District staff dedicated to project implementation and support. Preliminary reviews with vendors indicate that a budget increase will be required in FY 08/09 in the range of $400K to $1.7M.

A copy of the report is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Marvin Miller summarized the staff report and stated that the company that bought out Spear has two other products offering similar functionality and that staff believes that there is significant risk that the Spear product will be merged into one of the other similar products. Mr. Miller also briefly described the benefits of implementing an asset and vehicle fluid management system at the District.

Discussion ensued, including the following:

  • In response to a question from Director Grosboll, Mr. Miller explained that the SBI applications include financial, fixed assets, accounting and payroll, and that the Spear applications include inventory and maintenance management. Mr. Miller noted that all Spear applications have been fulfilled, except the Spear Work Manager/Asset Management System. Mr. Miller also stated that there is still $1.3 million available from the original budget allotment.
  • Director Middlebrook inquired as to whether the District will be at risk if the contract with Spear is severed. In response, Mr. Miller stated that the District will not be at risk and that, in the interim, the District will maintain the contract with Spear. Ms. Kupersmith stated that the District is seeking a better product, a consistent team and a good price.

Staff recommended and the Committee concurred by motion made and seconded by Directors MIDDLEBROOK/GROSBOLL 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 competitive negotiation process for the procurement of Request for Proposals No. 2008-MD-2, Asset and Vehicle Fluid Management Systems, in accordance with the District’s Procurement Policy and the California Public Contract Code, in lieu of a sealed competitive bidding process.

Action by the Board at its meeting of October 12, 2007 – Resolution
NON-CONSENT CALENDAR

AYES (10): Directors Cochran, Eddie, Grosboll, Hernández, Middlebrook, Newhouse Segal, Pahre, Reilly and Sandoval; First Vice President Boro
NOES (0): None

     
3.

Approve Actions Relative to the Execution of a Change Order to Contract No. 2007-FT-7, Vessel Refurbishment, with Bay Ship & Yacht Co.

In a memorandum to Committee, Deputy General Manager/Ferry Division James Swindler, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to approve actions relative to the execution of a Change Order to Contract No. 2007-FT-7, Vessel Refurbishment, with Bay Ship and Yacht Co. to pay the requisite California State sales tax for certain items purchased and manufactured by the shipyard relative to the project.

As background, the Board of Directors, by Resolution No. 2006-084 at its meeting of October 27, 2007, authorized award of Contract No. 2007-FT-7 for complete refurbishment of the M.S. Marin. The Bid Documents stated that bidders were not to include sales tax with the bid price, but were to submit to the District a separate invoice for the sales tax at the time of each purchase, so that the tax could be included with regular progress payments. However, the shipyard did not follow these instructions per the bid specifications and submitted a detailed invoice in the amount of $245,988.41 for the total sales tax that is due in one lump sum.

The report stated that this project was included in the FY 06/07 Ferry Transit Division Capital Budget at a total cost of $7,525,000; however, all available funds have been expended. It is recommended that a budget increase in the amount of $346,000.00 be approved, to be funded from District reserves, for a total project cost of $7,871,000.

A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Discussion ensued, including the following:

  • Director Cochran inquired as to the reason why the sales tax was not paid up front. In response, Mr. Swindler stated that staff was not certain what the shipyard costs would be regarding fabrication; therefore, were not included in the Bid Documents.

Staff recommended and the Committee concurred by motion made and seconded by Directors COCHRAN/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 approve the following actions relative to the execution of a Change Order to Contract No. 2007-FT-7, Vessel Refurbishment, with Bay Ship & Yacht Co.:

  a.
Authorize execution of a Change Order, in the amount of $245,988.41, to pay the requisite California State sales tax for certain items purchased and manufactured by Bay Ship & Yacht Co.; and,
  b.
Authorize a budget increase in the FY 07/08 Ferry Transit Division Capital Budget in the amount of $346,000.00, to cover sales tax and project close-out costs;
 

with the understanding that the total project budget for Contract No. 2007-FT-7 will be increased from $7,525,000.00 to $7,871,000.00.

Action by the Board at its meeting of October 12, 2007 – Resolution
NON-CONSENT CALENDAR

AYES (10): Directors Cochran, Eddie, Grosboll, Hernández, Middlebrook, Newhouse Segal, Pahre, Reilly and Sandoval; First Vice President Boro
NOES (0): None

     
4.

Closed Session

Attorney David Miller, at the request of Acting Chair Pahre, stated that the Committee would convene in closed session to discuss two matters of potential litigation in regards to certain claims that have arisen relative to the vessel refurbishment, which relates to the project contingency concerning: 1) the consultant for the initial design; and, 2) the shipyard for additional work.

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 two matters of potential litigation. There is no action required at this time and the Committee has been informed as to how staff plans to resolve these disputed matters.

Action by the Board – None Required

     
5.

Public Comment

There was no public comment.

     
6.

Adjournment

All business having been concluded, the meeting was adjourned at 9:35 a.m.

     

 

 

Respectfully submitted,

/s/ Barbara L. Pahre, Acting Chair
Finance-Auditing Committee