January 10, 2008

 

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, January 10, 2008, at 11:00 a.m., Acting Chair Pahre presiding.

Committee Members Present (8): Acting Chair Pahre; Directors Boro, Cochran, Eddie, Grosboll, Middlebrook and Reilly; President Moylan (Ex Officio)

Committee Members Absent (1): Chair Stroeh

Other Directors Present (1): Director Newhouse Segal

Staff Present: Acting General Manager and 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/Ferry Division James P. Swindler; Director of Planning Alan R. Zahradnik; Deputy District Engineer Ewa Z. Bauer; Budget and Program Analysis Manager Jennifer Mennucci; Assistant Clerk of the Board Karen B. Engbretson; Executive Assistant to the General Manager Amorette Ko

Visitors Present: None

 

     
1.

Approve an Increase in the 2008 Special Event Ferry Fare between the Larkspur Ferry Terminal and AT&T Park

In a memorandum to Committee, Director of Planning Alan Zahradnik, Deputy General Manager/Ferry Division James P. Swindler, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided staff’s recommendation to approve an increase in the 2008 special event ferry fare between the Larkspur Ferry Terminal and AT&T Park from $7.00 to $7.50. The report stated that the District’s policy regarding special event ferry service requires that passenger fares be set at a “break-even” rate that generates sufficient fare revenues to cover the operating costs of providing the service. The report also stated that staff has prepared a cost/revenue analysis of special event ferry service provided for Giants baseball games at AT&T Park, and staff estimates that it will cost approximately $510,000 to operate special event ferry service to eighty Giants’ home games during the 2008 season. Based on the average ridership per ferry trip of 425 passengers, staff recommends increasing the one-way special event ferry fare by $0.50 to $7.50, in keeping with the “break-even” policy.

The Board of Directors, by Resolution No. 2007-104 at its meeting of December 14, 2007, approved setting a public hearing for the purpose of receiving public comment on the proposal. A public comment period was initiated on December 20, 2007, and ended with the public hearing on January 10, 2008. During that time, four written comments were received: (1) One comment expressed support and asked that “the day game ferry be restored;” (2) One comment related to an observation regarding the poor, interior maintenance of the aging fleet of ferries being used on the ballpark run; (3) One comment expressed opposition and stated, “especially with no discount for seniors;” and, (4) One comment expressed support and requested that the ferryboat arrive an hour earlier, stating, “I have missed many innings due to late arrival.” Staff prepared responses to all of the comments, a copy of which was attached to the staff report. A copy of the staff report, with attachments, 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 MIDDLEBROOK/BORO 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 an increase in the 2008 Special Event Ferry fare between the Larkspur Ferry Terminal and AT&T Park from $7.00 to $7.50, in keeping with the goal to set special event fares at “breakeven” levels, effective March 1, 2008.

Action by the Board at its meeting of January 11, 2008 – Ordinance
NON-CONSENT CALENDAR

AYES (8): Acting Chair Pahre; Directors Boro, Cochran, Eddie, Grosboll, Middlebrook and Reilly; President Moylan (Ex Officio)
NOES (0): None
ABSENT (1): Chair Stroeh

     
2.

Authorize Execution of an Amendment to the Cooperative Agreement with the Bay Area Toll Authority for the Operation of the FasTrak® Regional Customer Service Center for a Modification to the Cost Allocation Formula

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided staff’s recommendation to authorize execution of an amendment to the Cooperative Agreement (Agreement) with the Bay Area Toll Authority (BATA) for the operation of the FasTrak® Regional Customer Service Center (CSC), to reflect the revised cost allocation formula for FY 07/08.

The report stated that BATA and the District entered into an Agreement in August 2003 for the joint operation and management of the CSC. The Agreement includes provisions for sharing the costs of the CSC operations, and also provides for revising the cost allocation formula from time to time if necessary.

The report also stated that under the current Agreement, costs for CSC operations are shared proportionally according to the volume of FasTrak® transactions on each agency’s facility. During the past year, BATA has embarked on an aggressive marketing campaign that has resulted in large increases in the number of FasTrak® accounts and additional CSC operating costs. However, these additional accounts have not translated into significant increases in FasTrak® transactions for the Golden Gate Bridge. As a result, it is being proposed to revise the cost allocation formula. The District’s cost share would be based on the District’s average payments from July 2005 to July 2007, and adjusted by the percentage increase of FasTrak® accounts that primarily use the Golden Gate Bridge. The result of this revised cost allocation formula is that a larger share of the increased CSC operating costs due to the marketing effort would be borne by BATA. Staff recommends that the Agreement be amended to reflect this more equitable cost allocation formula. If this amendment is approved, the District’s total annual cost for CSC operations will decrease by approximately $200,000. The report noted that the BATA Board of Directors took action to approve this modification on January 9, 2008. A copy of the staff report is available in the Office of the District Secretary and on the District’s web site.

Discussion ensued, including the following:

  • Director Boro commented that there have been recent news reports about the high number of FasTrak® violations, and inquired as to the District’s collection efforts for these penalties. In response, Mr. Wire described the “DMV Hold,” which places a hold on the registration of an automobile if a FasTrak® violator has unpaid violations. When the violator tries to register the vehicle, an itemized list of penalties would have to be paid first, before DMV would release the registration. Mr. Wire further stated that following the merger with BATA for management of the regional CSC, both the District and the BATA now use this process to collect unpaid FasTrak® violations. Mr. Wire noted that the District’s strategy for years has been to make sure that as a group, the violators pay for themselves, so that essentially the District collects enough money from the various violators to replace the toll revenue that was lost due to all violations.

Staff recommended and the Committee concurred by motion made and seconded by Directors BORO/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 execution of an amendment to the Cooperative Agreement with the Bay Area Toll Authority for the operation of the FasTrak® Regional Customer Service Center to modify the cost allocation formula, basing the District’s cost share on its average payments from July 2005 to July 2007, to be adjusted by the percentage increase of Golden Gate Bridge FasTrak® accounts.

Action by the Board at its meeting of January 11, 2008 – Resolution
NON-CONSENT CALENDAR

AYES (8): Acting Chair Pahre; Directors Boro, Cochran, Eddie, Grosboll, Middlebrook and Reilly; President Moylan (Ex Officio)
NOES (0): None
ABSENT (1): Chair Stroeh

     
3.

Authorize Execution of an Amendment to the Professional Services Agreement with Traffic Technologies, Inc., for Extended Support Services Relative to Contract No. 2006-B-19, Replacement of FasTrak® Lane and Plaza/Host Equipment

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided staff’s recommendation to authorize execution of an amendment to the Professional Services Agreement (Agreement) with Traffic Technologies, Inc., (TTI) relative to Contract No. 2006-B-19, Replacement of FasTrak® Lane and Plaza/Host Equipment, to provide extended technical oversight, and to authorize the necessary budget increase.

The report stated that in July 2006, the District authorized execution of an Agreement with Traffic Technologies, Inc. (TTI) to provide technical support services and oversight for the design, development, testing, integration and acceptance of the replacement FasTrak® lane and plaza/host systems. The original Agreement with TTI was to expire on April 1, 2007, upon the anticipated completion date of the FasTrak® project. However, in April of 2007, the Board approved a six-month extension to the Agreement, due to revisions in project implementation of the primary contract with The Revenue Markets, Inc. (TRMI).

The report also stated that due to further delays in project implementation and system acceptance testing, it is now necessary to amend the Agreement with TTI to extend its support services for the District through June 2008, by which date the FasTrak® system is estimated to be accepted. The report noted that as the District gets closer to system acceptance testing of the new FasTrak® system, it is critical to have available the technical services of TTI. TTI’s detailed knowledge of the Golden Gate Bridge toll operations and FasTrak® system has made it an invaluable asset to this project. TTI has provided a proposal for its continued support services through June 2008, at a rate of $125 per hour. TTI estimates that approximately 1,120 hours are necessary to complete the scope of work, for a total amount of $140,000. However, given that TRMI’s schedule for completion has fallen so far behind, it is recommended that an additional $140,000 be authorized in the project budget, in case TRMI continues to delay completion and a further amendment is needed to secure TTI’s services beyond July 1, 2008.

The report further stated that TRMI currently has completed 80 percent of the contract milestones, and the District is withholding $791,697.98 until completion of system acceptance. In the past, TRMI has paid for the District’s third-party consultants when the need for such consultants resulted from TRMI’s delays. District staff is in discussions with TRMI regarding reimbursement of those costs that will be incurred by the District for TTI’s additional services. The report also described the fiscal impact, noting that this project is included in the FY 07/08 Bridge Division Capital Budget at a total cost of $4,830,000 and is 100% District funded. A capital budget increase in the amount of $280,000 from District reserves is required to fund the additional TTI services, which will increase the total project budget to $5,110,000. It is noted, however, that a portion of the approved $280,000 may not be needed, and some of the costs may eventually be recouped through a negotiated agreement with TRMI. 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 Middlebrook made the following comments and inquiries:
    • She noted that TRMI’s delays have necessitated the extension of the Agreement with TTI, and inquired as to why TRMI is not simply paying for the cost of extending TTI’s Agreement. In response, Mr. Wire stated that the District’s strategy is to have TRMI complete all work associated with Contract No. 2006-B-19, and then negotiate with them regarding outstanding contract payments. He noted that currently, the District is withholding its payments to TRMI, and that the amount of the monies withheld is far greater than the cost of extending TTI’s Agreement.
    • She inquired regarding the quality of TRMI’s work. In response, Mr. Wire stated that TRMI’s work on Contract No. 2006-B-19 has been overall satisfactory to date, with the exception of timely completion of the project requirements, and that staff is looking forward to a long-term working relationship with TRMI. He further stated that the new FasTrak® lane and plaza/host equipment is working, but not to final standards, and that the primary users are mostly pleased with the system.
    • She requested that staff provide a report at a later date updating the Committee on the progress of the FasTrak® lane and plaza/host equipment project.
  • Acting Chair Pahre inquired regarding communications between the District and TRMI for contract payments and the status of contract completion. In response, Mr. Wire stated that staff has met with TRMI as recently as this week and that the District has corresponded with TRMI regarding those issues.


Staff recommended and the Committee concurred by motion made and seconded by Directors BORO/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 Contract No. 2006-B-19, Replacement of FasTrak® Lane and Plaza/Host Equipment:

  a.
Authorize execution of an amendment to the Professional Services Agreement with Traffic Technologies, Inc., to provide technical oversight services, at a cost not to exceed $280,000; and,
  b.

Authorize a budget increase in the FY 07/08 Bridge Division Capital Budget from District Reserves in the amount of $280,000, for a total project budget of $5,110,000.

Action by the Board at its meeting of January 11, 2008 – Resolution
NON-CONSENT CALENDAR

 

AYES (8): Acting Chair Pahre; Directors Boro, Cochran, Eddie, Grosboll, Middlebrook and Reilly; President Moylan (Ex Officio)
NOES (0): None
ABSENT (1): Chair Stroeh

     
4.

Public Comment

There was no public comment.

     
5.

Adjournment

All business having been concluded, the meeting was adjourned at 11:10 a.m.

     

 

Respectfully submitted,

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