February 7, 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/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Thursday, February 7, 2008, at 10:15 a.m., Chair Stroeh presiding.

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

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

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 Madeline Chun; Deputy General Manager/Bus Division Susan C. Chiaroni; Deputy General Manager/Ferry Division James P. Swindler; Director of Risk Management/Safety William Stafford; Director of Planning Alan R. Zahradnik; Assistant Clerk of the Board Karen B. Engbretson; Executive Assistant to the General Manager Amorette Ko

Visitors Present: None

   
1.

Approve Actions Relative to Filing an Application with the Metropolitan Transportation Commission for Programming RTIP/STIP Funds to Support the Golden Gate Bridge Moveable Median Barrier Project

In a memorandum to Committee, Capital and Grant Programs Manager Gayle S. Prior, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to approve actions relative to the filing of an application with the Metropolitan Transportation Commission (MTC) for programming 2008 Regional Transportation Improvement Program/State Transportation Improvement Program (RTIP/STIP) funds. The report stated that in January 2008, the District filed an application with the MTC for 2008 RTIP/STIP funds in the amount of $20 million to support the Golden Gate Bridge Moveable Median Barrier Project.

The report also stated that as a condition of grant award, project applicants are required to adopt a resolution authorizing the General Manager or her designee to act on behalf of the applicant and its governing body, as well as to provide the related certification of assurances for the RTIP/STIP project application. Attached to the staff report was list of the applicable RTIP/STIP certification of assurances. The report further stated that staff recommends approving the actions necessary to secure the RTIP/STIP funds to support the Golden Gate Bridge Moveable Median Barrier Project. A copy of the staff report, with attachment, 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/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 authorize the General Manager or her designee to execute for and on behalf of the Golden Gate Bridge, Highway and Transportation District any actions necessary, including submitting the related certification of assurances, relative to the filing of an application with the Metropolitan Transportation Commission for programming 2008 Regional Transportation Improvement Program/State Transportation Improvement Program funds in the amount of $20 million to support the Golden Gate Bridge Moveable Median Barrier Project.

Action by the Board at its meeting of February 8, 2008 – Resolution
NON-CONSENT CALENDAR

AYES (7): Chair Stroeh; Vice Chair Pahre; Directors Cochran, Eddie, Middlebrook and Reilly; President Moylan (Ex Officio)
NOES (0): None
ABSENT (2): Directors Boro and Grosboll

   
2.

Status Report on the Renewal of the Marine Insurance Program

In a memorandum to Committee, Director of Risk Management/Safety William Stafford, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a status report on the District’s Marine Insurance Program, which renews on February 28, 2008. The report stated that the Marine Insurance Program is comprised of Hull and Machinery/Protection and Indemnity Insurance, Vessel Pollution Insurance and Marine Liability Insurance (including Terminal Operator’s Legal Liability and Excess Protection and Indemnity Insurance).

The report also stated that the District purchases Hull and Machinery/Protection and Indemnity Insurance in amounts equal to the approximate replacement costs of its ferry vessels, along with primary Protection & Indemnity limits of $1,000,000. The limits of liability for the excess Protection & Indemnity and Marine liabilities were raised from $75,000,000 to $100,000,000 in 2006, given the scope of potential loss from Marine operations.

The report further stated that premiums for the Hull and Machinery/Protection and Indemnity classes of insurance have been favorable to the District since FY 04/05. In FY 06/07, there was an overall 23 percent decrease in the Marine Insurance Program premiums, with an overall decrease of 31 percent in FY 07/08. For the start of 2008, for Marine accounts with a favorable loss history, insurers are typically requesting renewal premiums with a decrease of 5 percent, partly due to the continued high level of competition in the Marine insurance market for Hull and Machinery policies. As a result, staff has requested that Marsh Risk & Insurance Services (Marsh), the District’s insurance broker, limit their marketing efforts to the most competitive markets this year, after expanded marketing in 2007.

The report also stated that, over the past several years, the District has continued to work aggressively to reduce its loss experience and has achieved significant claims reduction by instituting proactive risk management practices. The report included a list of recent actions taken by the Ferry Transit Division to maintain a favorable loss history. The report noted that since FY 04/05, the District has been reimbursed from the District’s prior Marine insurer ACE for over $1.6 million in open claims, mostly dating from 1995-2002, which are now closed. The District currently does not have any open high value Marine insurance claims, and with no losses at the $350,000 deductible that the District currently carries, the District’s Insurance Advisor is pursuing lowering the deductible to $150,000.

The report further noted that quotes for the Marine Insurance Program are expected on February 11, 2008, and that staff anticipates that the FY 08/09 premium quotations will be approximately $372,679, which is in the range of plus or minus five percent of the expiring premium. 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, William Stafford provided a brief overview of the District’s Marine Insurance Program and stated that the premiums for the Marine Insurance Program have decreased by approximately 50 percent since 2005. He also stated that staff will be reviewing the marketing results for the Marine Insurance Program, and will present a recommendation for renewal at the February 21, 2008, meeting of the Finance-Auditing Committee.

Action by the Board – None Required

   
3.

Public Comment

There was no public comment.

   
4.

Adjournment

All business having been concluded, the meeting was adjourned at 11:20 a.m.

   

 

Respectfully submitted,

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