July 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, July 10, 2008, at 10:00 a.m., Chair Stroeh presiding.

Committee Members Present (6): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran and Eddie; President Moylan (Ex Officio)

Committee Members Absent (2): Directors Grosboll and Reilly

Other Directors Present (1): Director Newhouse Segal

Staff Present: General Manager Celia G. Kupersmith; District Engineer Denis J. Mulligan; Auditor-Controller Joseph M. Wire; Secretary of the District Janet S. Tarantino; Attorneys David J. Miller and Madeline Chun; Deputy General Manager/Bus Division Teri W. Mantony; Deputy General Manager/Ferry Division James P. Swindler; Director of Planning Alan R. Zahradnik; Public Affairs Director Mary C. Currie; Assistant Clerk of the Board Patsy Whala; Executive Assistant to the General Manager Amorette Ko

Visitors Present: David Schonbrunn, TRANSDEF, Tilly Chang, San Francisco Transportation Authority, Raymond Messier, Vice President, Amalgamated Transit Union, Local No. 1575

       
1.

Authorize Filing a Grant Application with the Bay Area Air Quality Management District for FY 08/09 Transportation Fund for Clean Air Program Grant Funds to Support Larkspur Ferry Shuttle Operations

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 Bay Area Air Quality Management District for FY 08/09 Transportation Fund for Clear Air Program grant funds to support a two-year peak period ferry feeder service between Fairfax/Sir Francis Drake and the Larkspur Ferry Terminal (LFT). These funds are distributed to agencies to implement projects to reduce air pollution, such as ferry feeder services.


The report stated that Golden Gate Ferry ridership has been increasing by over five percent per year and staff anticipates an increase in future ridership due to the escalating gasoline prices. The goal of the service is to reduce traffic congestion and vehicle emissions in the U.S. Highway 101 Golden Gate Corridor by offering an effective shuttle service that will encourage LFT patronage.

The report also stated that, in accordance with federal guidelines, grant funding will be requested for a two-year period, which represents the maximum amount of time allotted for shuttle/feeder services. The proposed shuttle service will be funded at an estimated annual cost of $324,307 (90% Federal/10% District), for a total project cost of $648,614. As a result of the proposed ferry feeder service, additional parking spaces will become available at the LFT, and it is anticipated that the fare revenue generated from new ferry riders will offset the District’s local match. A copy of the staff report is available in the Office of the District Secretary and on the District’s web site.

Public Comment

David Schonbrunn, TRANSDEF, expressed his opposition to implementation of a ferry shuttle service to the Larkspur Ferry Terminal (LFT), stating that in his opinion, the ferry feeder service will not work as long as parking is free at the LFT.

Staff recommended and the Committee concurred by motion made and seconded by Directors COCHRAN/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 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 relative to the filing of applications with the Bay Area Air Quality Management District for FY 08/09 Transportation Fund for Clear Air Grant Program funds to support a two-year peak period ferry feeder service between Fairfax/Sir Francis Drake and the Larkspur Ferry Terminal for a total project cost of $648,614 (90% Federal/10% District).

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

AYES (6): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Eddie; President Moylan (Ex Officio)
NOES (0): None
ABSENT (2): Directors Grosboll and Reilly

       
2.

Approve Actions Relative to Filing an Application with the Metropolitan Transportation Commission for FY 08/09 Transportation Development Act, State Transit Assistance and Regional Measure 2 Operating Funds to Support Bus, Ferry and Paratransit Services

In a memorandum to Committee, 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 FY 08/09 Transportation Development Act, State Transit Assistance and Regional Measure 2 operating funds to support bus, ferry and paratransit services. The report stated that the availability of Transportation Development Act (TDA) statewide sales tax revenues, State Transit Assistance Act (STA) gasoline and diesel fuel sales tax revenues and Regional Measure 2 (RM2) funds are made available annually to the District for operating assistance through the MTC. The report also stated that the District is eligible to claim $15,288,580 of TDA funds and $7,714,175 of STA funds for various operating purposes.

The report further stated that consistent with past years, the District is eligible to receive 100 percent of the Marin County TDA apportionment, or $10,447,584, of which 34.3 percent, or $3,583,521, will be credited back to Marin County to support local transit services, in accordance with the Marin Local Transit Services Agreement between this District and the Marin County Transit District. The report also stated that the District is eligible to receive 25 percent of the Sonoma County apportionment, or $4,840,996.

The report provided details regarding the disbursement of STA funds, including the amounts to be credited back to Marin County for local transit services and also described how RM2 transit operating funds are disbursed, which funds are derived from the extra $1.00 toll collected on all seven state-owned toll bridges in the San Francisco Bay Area. Golden Gate Transit Route Nos. 40/42, 72x and 75 are eligible services for the receipt of RM2 funds. 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 PAHRE/MOYLAN 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 file an application with the Metropolitan Transportation Commission for FY 08/09 Transportation Development Act, State Transit Assistance and Regional Measure 2 operating funds that to support bus, ferry and paratransit services.

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

AYES (6): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Eddie; President Moylan (Ex Officio)
NOES (0): None
ABSENT (2): Directors Grosboll and Reilly

       
3.

Approve a Base Toll Increase on the Golden Gate Bridge

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to approve implementation of Golden Gate Bridge base toll in the amount of $6 Cash/$5 FasTrak® for 2-axle vehicles, as well as charge an additional rate of $3.00 Cash/$2.50 FasTrak® for each additional axle, with the rate for persons with disabilities be 50% of applicable cash rate, effective September 1, 2008. The report stated that the Finance-Auditing Committee further recommends that the Board of Directors find that the increase in the base toll is necessary for the purpose of: (a) meeting operating expenses, (b) purchasing or leasing supplies, equipment or materials, (c) meeting financial reserve needs and requirements, and (d) obtaining funds for capital projects necessary to maintain service within existing services areas, and therefore is exempt under Section 21080(b)(8) of the Public Resources Code.

The report further stated that the proposed base toll increase on the Golden Gate Bridge will close a projected $91 million budget shortfall over the next five years, and will allow continued funding for the operation and maintenance of the Golden Gate Bridge, as well as for the operation and maintenance of the B=bus and ferry systems at their current levels. Further, the report stated that, with the present day increase in fuel costs, the District forgoes approximately $1.5 million in potential revenue each month the toll is delayed; therefore, staff recommends implementation on September 1, 2008. The base toll will generate net revenues of approximately $18 million in FY 08/09, and $93 million over the next five years.

The report stated that staff recommends that the Board take no action on the proposed variable toll at this time, as the variable toll proposals were to meet the United States Department of Transportation (DOT) guidelines for award of the UPP for the Bay Area, and the DOT has not yet completed its review.

The report stated that the public outreach process included three Open Houses, several Press Releases and a Public Hearing. The report also included a chart delineating the toll increase increments proposed by staff, a summary of the strategic planning efforts to date, a PowerPoint handout of the variable toll proposal and a summary of public comments along with the District’s responses. The Committee was also provided with a letter from the DOT expressing their opposition to a variable toll increase on the Golden Gate Bridge. The letter stated that, after analyzing the District’s methodology and forecasts, the DOT does not believe that the variable toll would meaningfully reduce traffic congestion on Doyle Drive.

At the meeting, Celia Kupersmith stated that, in regards to the proposed variable toll, there will be a collaborative follow-up meeting next week with the regional partners in the Urban Partnership Program (UPP), at which the DOT’s technical experts will examine the various factors of the UPP congestion relief plan. Ms. Kupersmith also stated that the District is facing a $91 million shortfall and requested that the Board approve the base toll increase in order to sustain the viability of the District. Ms. Kupersmith noted that the District’s core business is to provide service in the Golden Gate/U.S. Highway 101 Corridor.

Joseph Wire described the District’s response to the alternative base toll and variable toll proposal suggested by TRANSDEF, under which base tolls would be set at $5.00 for cash and FasTrak® users and variable tolls would be set at $7.00 for cash and $5.13 for FasTrak® users. He stated that staff reviewed the proposal and concluded that most likely it would not meet the goal of eliminating the $91 million shortfall, primarily due to the assumption that large numbers of cash toll payers would become FasTrak® users, thereby reducing the amount of money that the toll increase would raise.

Public Comment

David Schonbrunn, TRANSDEF, expressed his support of the proposed variable toll increase, describing the quantifiable differences between those paying cash at the toll gate versus having FasTrak® and suggested that the District remove the FasTrak® discount during off-peak periods so that the variable toll increase can be successful.

Tilly Chang, San Francisco Transportation Authority, expressed the agency’s support of postponing the proposed variable toll increase until the DOT can analyze the congestion relief plan and stated that the agency will present the findings to the District at a later date.

Discussion ensued, including the following inquiries:

  • Chair Stroeh inquired as to the effect the toll increase would have on the District’s reserves. In response, Mr. Wire stated that it is expected that this toll increase, if implemented in September 2008, will be able to meet the District’s original projection of raising $91 million over the next five years, and will be able to balance the District’s estimated contribution for future capital projects. He stated however, that even with the toll increase, staff notes that significant increases in fuel costs will make it difficult to balance the budget in the last years of the five-year projected period.
  • Director Boro inquired as to the deadline for implementation of a variable toll increase. In response, Ms. Kupersmith stated that the DOT’s deadline September 2009.

Staff recommended and the Committee concurred by motion made and seconded by Directors MOYLAN/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 approve the following actions relative to the implementation of Golden Gate Bridge base toll increase, effective September 1, 2008:

  1. Approve a Golden Gate Bridge base toll, as follows:
       
Basic Auto Rate (2-axle)
Cash
FasTrak
$6.00
$5.00
Axle Rate (per axle if more than 2)
Cash
FasTrak
$3.00
$2.50
Rate for Persons with Disabilities with valid District identification card  
50% of applicable cash rate
       
  2.
Find that the increase in the base toll is necessary for the purpose of: 1) meeting operating expenses, b) purchasing or leasing supplies, equipment or material, c) meeting financial reserve needs and requirements, and, d) obtaining funds for capital projects necessary to maintain service within existing service areas; and, therefore except under Section 21080(b)(8) of the Public Resources Code; and,
  3.

Take no action on the variable toll options until some time in the future when more definitive feedback from the U.S. Department of Transportation officials have been received regarding the proposed options.

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

       
 
AYES (6): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Eddie; President Moylan (Ex Officio)
NOES (0): None
ABSENT (2): Directors Grosboll and Reilly
       
4.

Authorize Execution of a Professional Services Agreement with Capital Accounting Partners, LLC, Relative to Request for Proposals No. 2009-D-3, OMB A-87/Cost Allocation Plans and Indirect Cost Rates

In a report to Committee, Financial Management and Business Process Manager Alice Ng, Auditor-Controller Joseph M. Wire and General Manager Celia Kupersmith provided staff’s recommendation regarding execution of Professional Services Agreement (PSA) relative to Request for Proposals (RFP) No. 2009-D-3, OMB A-87 Cost Allocation Plans and Indirect Cost Rates, to Capital Accounting Partners, LLC, at a cost of $127,000, for a five-year term, for the development of indirect cost allocation plans/indirect cost rate proposals, covering seven cost plan years, which will allow the District to maximize grant reimbursements from federal and state agencies in accordance with regulations.

The report also stated that the District advertised RFP No. 2009-D-3 on May 13, 2008, and received four proposals by the due date of June 17, 2008. The report noted that the RFP was posted on the District’s website and that four proposers were notified of the RFP. An Evaluation Committee, composed of District staff, evaluated the proposals using the following criteria: (1) qualifications and experience of firm (10 points); (2) qualifications and experience of the personnel assigned to the project (20 points); (3) approach and quality of work plan (40 points); and, (4) fee structure (30 points).

The report also stated that three firms were interviewed by the Evaluation Committee, and based upon the evaluation of both the written proposals and the results of the oral interviews, staff determined that Capital Accounting Partners, LLC (CAP), Sacramento, CA, remained the highest-ranked proposer. The report noted that the Evaluation Committee found that the primary consultant for CAP has exclusively developed over 200 cost allocation plans, including the District’s 04/05 cost plan. Furthermore, the Evaluation Committee found that CAP has over 37 years of experience, which includes working for the State of California Office of the Controller.

In summary, staff is recommending authorization of a Professional Services Agreement with CAP in recognition of their technical expertise, quality of work plan, ability to meet accelerated state reporting requirements, exceptional customer care, familiarity of the District’s organizational structure and the lowest fee structure for these services. The cost for services for Year One is $51,000, covering three cost plan years. Requisite funds are available in the FY 08/09 District Division Operating Budget???),and funds for the remaining years of the project will be included in the District Division Operating Budgetfor FY 09/10 through FY 12/13. 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 MOYLAN/PAHRE 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 a Professional Services Agreement with Capital Accounting Partners, LLC, Sacramento, CA, relative to Request for Proposals No. 2009-D-3, OMB A-87 Cost Allocation Plans and Indirect Cost Rates, in the amount of $127,000, for a five-year term, covering seven cost plan years, for the development of indirect cost allocation plans/indirect cost rate proposals; with the understanding that requisite funds are available in the FY 08/09 District Division Operating Budget, and that requisite funds for the remaining years will be included in the for District Division Operating Budget for FY 09/10 through FY 12/13.

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

AYES (6): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Eddie; President Moylan (Ex Officio)
NOES (0): None
ABSENT (2): Directors Grosboll and Reilly

       
5.

Authorize Execution of the Fourth Amendment to the Professional Services Agreement with GIRO, Inc., Relative to Contract No. 97-BT-8, Purchase, Delivery, Installation and Support of Software Program for Golden Gate Transit Fixed Route Scheduling System

In a memorandum to Committee, Deputy General Manager, Bus Division Teri W. Mantony, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to authorize execution of a fourth amendment to the Professional Services Agreement (PSA) with GIRO, Inc. (GIRO), in the amount of $119,226, relative to Contract No. 97-BT-8, Purchase, Delivery, Installation and Support of Software Program for Golden Gate Transit Fixed Route Bus Scheduling System; and, authorize a budget increase in the FY 08/09 Bus Transit Division Capital Budget in the amount of $60,000, for a total project budget of $455,000. The report stated that the PSA with GIRO was amended by Resolution No. 2005-079 for long-term upgrade and maintenance support for HASTUS software modules used in bus scheduling, dispatching and timekeeping operations in three phases, over a six-year period, at a six-year cost of $802,065, and amended by Resolution No. 2006-090 for the inclusion of capital costs for automating the interface between the HASTUS dispatch system and the IFAS financial system at a cost of $95,000. At that time, the capital budget was increased in the amount of $70,000, increasing the project budget to $395,000.

The fourth amendment allows for an increase in the scope of services, as follows:

  • Remove the 2007 version upgrade as provided for in the PSA;
  • Provide for necessary software licenses; and,
  • Restructure the Maintenance and Support Agreement to provide discounted consulting hours.

This amendment will allow for the completion of the HASTUS/IFAS payroll interface which continues to capture new efficiencies in the Bus Operator payroll process; and, will provide vendor payments to both GIRO, under the existing PSA, and to SunGard Public Sector, the vendor for the IFAS financial and payroll systems under a sole source procurement authorized by the General Manager. The proposal from GIRO also contained pricing for optional modules, if the District so desires to implement these modules.

Currently, project costs for the HASTUS/IFAS interface development project are included in the FY 08/09 Bus Transit Division Capital Budget in the amount of $395,000 (80% Federal/20% District). Staff recommends that a budget increase in the FY 08/09 Bus Transit Division Capital Budget in the amount of $60,000, be authorized, to be funded from District Reserves, in order to fully fund this project .and increase the budget in the amount of $455,000. Due to the fact that the amount of Federal Transit Administration grant funds allocated to this project remain unchanged in the amount of $316,000, while the amount of the District match will increase to $139,000, the funding ratio of the project budget will change to 69% Federal/31% District. A copy of the staff 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 approve the following actions relative to Contract No. 97-BT-8, Purchase, Delivery, Installation and Support of Software Program for Golden Gate Transit Fixed Route Bus Scheduling System:

  a.
Authorize execution of a fourth amendment to the Professional Services Agreement with GIRO, Inc., Montreal, Quebec, Canada, in an amount not to exceed $119,226, to cover costs associated with an increase in the scope of services relative to system upgrades, software licenses and consulting hours; and,
  b.

Authorize a budget increase in the FY 08/09 Bus Transit Division Capital Budget in the amount of $60,000, to be funded from District reserves, for a total project budget in the amount of $455,000 (69% Federal/31% District).

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

       
  AYES (6): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Eddie; President Moylan (Ex Officio)
NOES (0): None
ABSENT (2): Directors Grosboll and Reilly
       
6.

Public Comment

David Schonbrunn, TRANSDEF, suggested that the District license the Golden Gate Bridge symbol to generate revenue. In response, Chair Stroeh expressed his support for the idea, but noted that such an action would have to been approved by the Board of Directors in 1937.

Public comment was also received regarding Agenda Item Nos. 1 and 3, as listed above.

       
7.

Adjournment

All business having been concluded, the meeting was adjourned at 10:35 a.m.

       

 

Respectfully submitted,

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