November 19, 2009

 

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, Golden Gate Bridge Toll Plaza, San Francisco, CA, on Thursday, November 19, 2009, at 10:15 a.m., Chair Stroeh presiding.

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

Committee of the Whole Members Present (9): Directors Cochran, Elsbernd, Moylan, Newhouse Segal, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro (Ex Officio)
Committee of the Whole Members Absent (10): Directors Brown, Campos, Chu, Dufty, Grosboll, Kerns, McGlashan, Pahre, Sanders and Snyder

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/Bridge Division Kary H. Witt; Deputy General Manager/ Ferry Transit Division James P. Swindler; Deputy General Manager/Administration and Development Z. Wayne Johnson; Director of Environmental Health and Safety Bill Stafford; Acting Executive Assistant to the General Manager Sonia Pedlar; Assistant Clerk of the Board Lona Franklin

Visitors Present: Nancy Jones, PFM Asset Management, LLC; Jessica Mackey, Athens Administrators; Ahmad Gharaibeh, Vavrinek, Trine, Day & Co., LLP

     
1.

Ratify Actions by the Auditor-Controller

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith outlined commitments, disbursements and investments made on behalf of the District. The report also included a copy of the District’s Investment Report from PFM Asset Management LLC (PFM). A copy of the staff report, with attachments, is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Nancy Jones described the latest economic news and current interest rates for the District’s portfolio. She reported that the third quarter of 2009 showed some expansion of the economy, with both manufacturing and services sectors showing an improvement. She reported that the yield for a two-year Treasury Note stood at .6% and that rates are expected to remain stable until approximately 2012.

Ms. Jones emphasized that the District’s portfolio is very safe. The Portfolio Yield as of October 31, 2009 (excluding LAIF) was 3.17% and the average maturity was approximately two years. She reported that in October, 2009, PFM invested in callable Federal Home Loan Bank notes with a final maturity of October 2011, callable quarterly, with a yield-to-maturity of 1.5%. The District’s portfolio will benefit from this investment because of the higher interest rate. In addition, PFM invested in a five-year federal agency sector note, callable in one year, with an interest rate of 3.125%. Although this may get called away, it will earn substantial interest during the year it is held.

Staff recommended and the Committee concurred by motion made and seconded by Directors EDDIE/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 following actions by the Auditor-Controller:

     
  a.
Ratify commitments and/or expenditures totaling $15,000.00 for the period October 1, 2009, through October 31, 2009;
   
  b.
Ratify investments made by the Auditor-Controller during the period October 13, 2009, through November 10, 2009, as follows:
     
Security

Purchase

Date

Maturity

Date

Original

Cost

Percent

Yield

FHLB Notes (Callable)
10/30/09
10/28/11
5,000,000.00
1.50
     
  c.
Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between November 11, 2009, and December 8, 2009, as well as the investment of all other funds not required to cover expenditures which may become available; and,
     
  d.

Accept the Investment Report for October 2009 prepared by PFM.

Action by the Board at its meeting of November 20, 2009 – Resolution
CONSENT CALENDAR

     
  AYES (7): Chair Stroeh; Directors Cochran, Eddie, Elsbernd, Moylan and Sobel; President Boro
NOES (0): None
ABSENT (2): Director Grosboll; Vice Chair Pahre
     
2.
Receive the Independent Auditors’ Reports for the Year Ending June 30, 2009, as Submitted by Vavrinek, Trine, Day & Co., LLP, including the following:
  a.
The Comprehensive Annual Financial Report, including the Single Audit Report;
  b.
The Financial Statements of the Supplemental Retirement Plan and Trust;
  c.
The Agreed-Upon Procedures Pertaining to the Proceeds of the Public Transportation Modernization, Improvement and Service Enhancement Account Grant; and,
  d.
The Independent Auditor’s Communication Letter
     
 

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on the annual audit of the Golden Gate Bridge, Highway and Transportation District for the year ending June 30, 2009, as prepared by Vavrinek, Trine, Day & Co., LLP, and reported on staff’s recommendation to receive the Independent Auditor’s Reports for the year ending June 30, 2009.

The Committee reviewed the following reports that had been provided by the Auditor-Controller regarding the District’s Financial Statements:

  • Independent Auditor’s Report;
  • Management’s Discussion and Analysis;
  • Financial Statements;
  • Required and Other Supplementary Information;
  • Statistics; and,
  • Single Audit Report.

In addition, the Committee reviewed the following reports that had been provided by the Auditor-Controller regarding the Financial Statements of the Supplemental Retirement Plan and Trust:

  • Independent Auditor’s Report;
  • Management’s Discussion and Analysis; and,
  • Financial Statements.

A copy of the staff report, including attached Independent Auditor’s reports, is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Mr. Wire introduced Ahmad Gharaibeh, a representative of the independent auditor, Vavrinek, Trine, Day & Co., LLP (VTD). Mr. Wire noted that this is the second audit of the District undertaken by VTD. He commended Public Affairs Director Mary Currie, who provided the artwork and written work for the Comprehensive Annual Financial Report, as well as the members of his staff, Director of Accounting Bette Joe, Accounting Supervisor Stefany Toll and Capital and Grant Programs Analyst Lynne Yu for their able assistance provided to the independent auditors.

Mr. Gharaibeh then addressed the Committee, providing an overview of the Independent Auditor’s Reports on both the District’s Financial Statements, as well as the Financial Statements of the Supplemental Retirement Plan and Trust. Mr. Gharaibeh summarized the scope of auditing services provided by VTD, and highlighted the results of the audit. He stated that no problems were discovered, and that there were no significant findings during the course of both audits. He also stated that the auditors had not found any material weaknesses in the Financial Statements, and that VTD provided a “clean opinion.” With regard to the Transportation Development Act, no non-compliance was found. Also, no non-compliance was found in connection with federal regulations when receiving federal grants. A clean opinion was issued for the retirement fund, as well as the Proposition 1B expense report. He stated that VTD is required to report to the Board of Directors any problems that are encountered during the audit, but none were found.

Staff recommended and the Committee concurred by motion made and seconded by Directors SOBEL/EDDIE to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

Receive the Independent Auditors’ Reports the Year Ending June 30, 2009, as Submitted by Vavrinek, Trine, Day & Co., LLP, including the following:

  a.
The Comprehensive Annual Financial Report, Including the Single Audit Report;
  b.
The Financial Statements of the Supplemental Retirement Plan and Trust;
  c.
The Agreed-Upon Procedures Pertaining to the Proceeds of the Public Transportation Modernization, Improvement and Service Enhancement Account Grant; and,
  d.

The Independent Auditor’s Communication Letter.

Action by the Board at its meeting of November 20, 2009 – Resolution
NON-CONSENT CALENDAR

     
  AYES (7): Chair Stroeh; Directors Cochran, Eddie, Elsbernd, Moylan and Sobel; President Boro
NOES (0): None
ABSENT (2): Director Grosboll; Vice Chair Pahre
     
3.

Monthly Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares (for Four Months Ending October 2009)

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a schedule comparing categories of Bridge traffic, as well as a monthly review of Bridge traffic and tolls and transit patronage and fares, for the four months ending October 31, 2009. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

     
4. Monthly Review of Financial Statements (for Four Months Ending October 2009)
     
  a.

Statement of Revenue and Expenses

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a financial statement entitled, Statement of Operating Revenues and Expenses for the four months ending October 31, 2009. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

     
  b.

Statement of Capital Programs and Expenditures

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided a financial statement entitled, Statement of Capital Programs and Expenditures for the four months ending October 31, 2009. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Action by the Board – None Required

     
5.

Closed Session

Attorney David Miller, at the request of Chair Stroeh, stated that the Committee would convene in closed session to discuss a matter of pending litigation, Geeny Mali Colas vs. Golden Gate Bridge, Highway and Transportation District, pursuant to Government Code Section 54956.9(a), listed on the agenda as Item No. 7.a.

After closed session, Chair Stroeh called the meeting to order in open session with a quorum present. Attorney Miller reported that the Committee had met in closed session, as permitted by the Brown Act, to discuss an item of pending litigation, as listed above. He reported that authority and jurisdiction in the case of Geeny Mali Colas vs. Golden Gate Bridge, Highway and Transportation District resided within the Finance-Auditing Committee; and further, that consensus had been reached within the Committee and instructions and authority were given to the General Manager to resolve this matter.

   
6.

Public Comment

There was no public comment.

   
7.

Adjournment

All business having been concluded, the meeting was adjourned at 10:45 a.m.

   

 

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