February 25, 2010

 

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) was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Thursday, February 25, 2010, at 10:40 a.m., Chair Stroeh presiding.

Committee Members Present (6): Chair Stroeh; Vice Chair Pahre; Directors Eddie, Elsbernd and Moylan; President Boro (Ex Officio)
Committee Members Absent (3): Directors Cochran, Grosboll and Sobel
Other Directors Present (5): Directors Kerns, McGlashan, Newhouse Segal, Reilly and Snyder

Committee of the Whole Members Present (11): Directors Elsbernd, Kerns, McGlashan, Moylan, Newhouse Segal, Pahre, Snyder and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro

Committee of the Whole Members Absent (8): Directors Brown, Campos, Chu, Cochran, Dufty, Grosboll, Sanders and Sobel

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 Miller; Deputy General Manager/Bridge Division Kary Witt; Deputy General Manager/Bus Transit Division Teri Mantony; Deputy General Manager/Ferry Transit Division James Swindler; Director of Risk Management/Safety William Stafford; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Lona Franklin

Visitors Present: None

     
1.

Ratify Actions by the Auditor-Controller

In a memorandum to Committee, Auditor-Controller Joseph M. Wire and General Manager Celia G. Kupersmith outlined commitments, disbursements and investments made on behalf of the Golden Gate Bridge, Highway and Transportation District (District). The report also included a copy of the District’s Investment Report from PFM Asset Management, LLC. 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 EDDIE/McGLASHAN 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 $19,000.00 for the period January 1, 2010, through January 31, 2010.
     
  b. Ratify investments made by the Auditor-Controller during the period January 12, 2010, through February 16, 2010, as follows:
     
Security
Purchase Date
Maturity Date
Original Cost
Percent Yield
FHLMC Notes
01/15/10
01/15/15
9,990,000.00
3.17
FNMA Notes
01/28/10
02/22/13
5,003,300.00
1.73
FHLB TAP Bonds
02/09/10
12/13/13
6,004,519.50
2.12
FHLB TAP Bonds
02/10/10
12/13/13
4,859,590.40
2.14
Nordea North America Commercial Paper
02/11/10
05/03/10
3,998,290.00
0.19
Societe Generale NA Commercial Paper
02/11/10
05/03/10
4,550,848.71
0.21
     
  c. Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between February 17, 2010, and March 15, 2010, as well as the investment of all other funds not required to cover expenditures that may become available; and,
     
  d.

Accept the Investment Report for January 2010, as prepared by PFM.

Action by the Board – Resolution
CONSENT CALENDAR

     
 
AYES (11): Directors Elsbernd, Kerns, McGlashan, Moylan, Newhouse Segal, Pahre, Snyder and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None
     
2. Authorize Budget Adjustment(s) and/or Transfer(s)
  a.
Budget Transfer from the FY 09/10 Ferry Transit Division Operating Budget to the FY 09/10 Ferry Transit Division Capital Budget Relative to an Amendment to the Professional Services Agreement with Anchor QEA, LP (formerly known as Anchor Environmental CA, LP) Regarding Request for Proposals No. 2008-FT-3, Consultant to Provide Berth and Channel Maintenance Dredging Design and Permitting Support Services for the Larkspur Ferry Terminal, to Provide Additional Services
(Recommendation from the February 25, 2010, Building and Operating Committee)
     
 

At the meeting, General Manager Celia G. Kupersmith stated that this item was deleted from the agenda as a budget transfer for this item was unnecessary because requisite funds are available in the District’s Ferry Transit Division Capital Budget.

Action by the Board of Directors
None Required

     
3.

Approve Renewal of the Marine Insurance Program

In a memorandum to Committee, Director of Risk Management/Safety William Stafford, Deputy General Manager/Administration & Development Z. Wayne Johnson, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to approve renewal of the Marine Insurance Program.

The staff report recommended renewal of the Hull and Machinery/Protection and Indemnity Insurance policy with AGCS Marine Insurance Company, National Union, Starr Indemnity and Navigators Insurance; renewal of the Excess Marine Liability Insurance policy with Staff Indemnity, National Union, AGCS Marine, Continental, Great American and Navigators; and, renewal of the Vessel Pollution Liability Insurance policy with Great American. The report noted that the Marine Insurance Program provides coverage in amounts equal to the approximate replacement costs of the ferry vessels, with primary Protection & Indemnity limits of $1 million and Excess Protection and Indemnity Insurance and Marine Liability Insurance liability limits of $100 million. There were no changes to the limits or the terms and conditions for the 2010 renewal. The staff report stated that competitive quotes were obtained. Requisite funds in the amount of $356,800.00 are available in the FY 09/10 Ferry Transit Division budget to cover the premium payments in FY 09/10, and will be included in the same budget for FY 10/11 to cover the FY 10/11 premium payments.

The staff report stated that the District’s favorable loss history has allowed it to take advantage of a reduction in premium amount over the previous policy year premium. The report noted that there have been no claims in the last seven years that have reached the insurance deductible amount of $350,000.00. 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, Director of Risk Management/Safety William Stafford briefly reviewed the staff report. He stated this will be the second renewal by Alliant and that, by bringing in additional companies, the District has received the best price. He stated that, typically, a five to ten percent increase could be expected but, in this case, the renewal price is significantly lower than last year’s price.

Staff recommended and the Committee concurred by motion made and seconded by Directors MOYLAN/EDDIE 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 actions relative to the renewal of the Marine Insurance Program, as follows:

     
  1.
Renew the Hull and Machinery/Protection and Indemnity Insurance policy with AGCS Marine Insurance Company (40%), National Union Insurance Group, Inc. (25%), Starr Indemnity & Liability Company (25%), and Navigators Insurance Company (10%), with an annual aggregate deductible of $350,000.00 and a limit of liability of $1 million, including Terrorism Risk Insurance Act (TRIA) endorsements for the 2010 Policy Year, at an annual premium of $219,008.00, for a one-year term, effective February 28, 2010;
  2.
Renew the Excess Marine Liability Insurance policy (including Terminal Operator’s Legal Liability and Excess Protection and Indemnity Insurance), with Starr Indemnity & Liability Company, National Union Insurance Group, Inc., AGCS Marine Insurance Company, Continental Insurance Company, Great American Insurance Group and Navigators Insurance Company, with a limit of liability of $100 million, including TRIA endorsements for the 2010 Policy Year, at an annual premium of $132,425.00, for a one-year term, effective February 28, 2010;
 

3.

Renew the Vessel Pollution Liability Insurance policy with Great American Insurance Co., at an annual premium of $5,368.00, for a one-year term, effective February 28, 2010;
     
 

with the understanding that requisite funds are available in the FY 09/10 Ferry Transit Division Operating Budget, and that requisite funds will be included in the FY 10/11 Ferry Transit Division Operating Budget.

Action by the Board of Directors – Resolution
NON-CONSENT CALENDAR

AYES (11): Directors Elsbernd, Kerns, McGlashan, Moylan, Newhouse Segal, Pahre, Snyder and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None

     
4.

Receive the Golden Gate Bridge, Highway and Transportation District’s Other Postemployment Benefit Trust’s Audited Financial Statements for the Year Ending June 30, 2009

In a memorandum to Committee, the OPEB Retirement Investment Trust Board (Trust Board) reported on the Trust Board’s recommendation that District’s Board of Directors receive the OPEB Trust’s Financial Statements for the Year Ending June 30, 2009, as submitted by Vavrinek, Trine, Day & Co., LLP, to the OPEB Retirement Investment Trust Board (ORITB) at its meeting of February 24, 2010. The report stated that Vavrinek, Trine, Day & Co., LLP, has audited the basic financial statements for the OPEB Trust Board as of and for the fiscal year ended June 30, 2009, and submitted the Independent Auditor’s Report, Management’s Discussion and Analysis, and Basic Financial Statements, for years ended June 30, 2009 and 2008, and that the Independent Auditor’s opinion is an unqualified opinion on the District’s OPEB Trust’s financial statements. No fiscal impact is related to this report. A copy of the Trust Board’s report is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Auditor-Controller Joseph Wire stated that the Finance-Auditing Committee, following its review of the Independent Auditor’s report, is required to make a recommendation to the District’s Board of Directors to receive this report, which report was received by the OPEB Trust Board on February 24, 2010.

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 receive the Other Post-Employment Benefits (OPEB) Retirement Investment Trust Board’s Financial Statements for the Year Ending June 30, 2009, as submitted by Vavrinek, Trine, Day & Co., LLP, to the OPEB Retirement Investment Trust Board at its meeting of February 24, 2010.

Action by the Board of Directors – Resolution
NON-CONSENT CALENDAR

AYES (11): Directors Elsbernd, Kerns, McGlashan, Moylan, Newhouse Segal, Pahre, Snyder and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None

     
5.

Monthly Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares (for Seven Months Ending January 2010)

In a memorandum to Committee, Auditor-Controller Joseph M. Wire and General Manager Celia G. 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 seven months ending January 31, 2010. 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

     
6. Monthly Review of Financial Statements for Seven Months Ending January 2010
     
  a. Statement of Revenue and Expenses
     
 

In a memorandum to Committee, Auditor-Controller Joseph M. Wire and General Manager Celia G. Kupersmith provided a financial statement entitled, Statement of Operating Revenues and Expenses. 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, Director of Capital and Grant Programs Gayle S. Prior, Auditor-Controller Joseph M. Wire and General Manager Celia G. Kupersmith provided a financial statement entitled, Statement of Capital Programs and Expenditures. 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

     
7.

Closed Session

Attorney David Miller, at the request of Chairman Stroeh, stated that the Finance-Auditing Committee would convene in closed session as permitted by the Brown Act for purposes of discussing a matter of pending litigation, listed on the Committee agenda under the Attorney’s Report as Item No. 8., Conference with Legal Counsel – Pending Litigation, Government Code Section 54956.9(a), Report of Athens Administrators, Mary Jo Potter vs. Golden Gate Bridge, Highway and Transportation District.

After closed session, Chairman Stroeh called the meeting to order in open session with a quorum present. Attorney Miller reported that, as noted on the agenda, the Committee met in closed session, as permitted by the Brown Act, for purposes of reviewing a matter of pending litigation. He reported that the Committee recommends resolution of this matter as recommended in the staff report.

   
8.

Public Comment

There was no public comment.

   
9.

Adjournment

All business having been concluded, the meeting was adjourned at 11:05 a.m.

   

 

Respectfully submitted,

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