May 28, 2010

 

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 was held in the Board Room, Administration Building, Toll Plaza, San Francisco, CA, on Friday, May 28, 2010, at 9:00 a.m., Chair Stroeh presiding.

Committee Members Present (8): Chair Stroeh; Vice Chair Pahre; Directors Cochran, Eddie, Elsbernd, Moylan and Sobel; President Boro (Ex Officio)
Committee Members Absent (1): Director Grosboll
Other Directors Present (7): Directors Chu, Kerns, McGlashan, Newhouse Segal, Reilly, Sanders and Snyder

Committee of the Whole Members Present (15): Directors Chu, Cochran, Elsbernd, Kerns, McGlashan, Moylan, Newhouse Segal, Pahre, Sanders, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
Committee of the Whole Members Absent (4): Directors Brown, Campos, Dufty and Grosboll

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 Witt; Deputy General Manager/Bus Transit Division Teri Mantony; Deputy General Manager/Ferry Transit Division James Swindler; Deputy General Manager/Administration and Development Z. Wayne Johnson; Director of Risk Management/Safety William L. 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 Wire and General Manager Celia 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 SOBEL/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 authorize the following actions by the Auditor-Controller:

     
  a. The Board of Directors has no commitments and/or expenditures to ratify for the period April 1, 2010, through April 30, 2010.
     
  b. Ratify investments made by the Auditor-Controller during the period April 13, 2010, through May 17, 2010, as follows:
     
Security
Purchase Date
Maturity Date
Original Cost
Percent Yield
Credit Agri. North America
Commercial Paper
4/19/2010
05/19/2010
5,124,060.42
0.22
BNP Paribas Fin, Inc.
Commercial Paper
05/03/2010
08/03/2010
3,996,933.33
0.30
Societe Generale NA
Commercial Paper
05/03/2010
08/03/2010
4,555,271.75
0.32
     
  c.
Authorize the Auditor-Controller to re-invest, within the established policy of the Board of Directors, investments maturing between May 18, 2010, and June 14, 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 April 2010, as prepared by PFM.

Action by the Board at its meeting of May 28, 2010
CONSENT CALENDAR

     
  AYES (10): Directors Cochran, Elsbernd, Kerns, Moylan, Snyder, Sobel 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 Increase in the FY 09/10 Bus Transit Division Capital Budget Relative to the Award of Contract No. 2010-BT-7, San Rafael Bus Facility Wash Rack Replacement, to Arntz Builders, Inc.

In a memorandum to Committee, Deputy District Engineer Ewa Bauer, District Engineer Denis Mulligan and General Manager Celia Kupersmith reported on staff’s recommendation to authorize a budget increase relative to the award of Contract No. 2010-BT-7, San Rafael Bus Facility Wash Rack Replacement, to Arntz Builders, Inc. in the amount of $1,746,157.00. The staff report provided details regarding the award of Contract No. 2010-BT-7 to Arntz Builders, Inc. The staff report stated that this Project is included in the FY 09/10 Bus Transit Division Capital Budget in the amount of $2,119,000.00, and is funded with $1,896,279.00 American Recovery and Reinvestment Act (ARRA) funds (90%), $197,175.00 Federal Transit Administration (FTA) grant funds (9%) and $25,546.00 District funds (1%). The staff report stated that, to date, approximately $250,000.00 has been spent to support the design, staff costs, and indirect costs. A capital budget increase in the amount of $551,000.00, funded with 100% ARRA grant funds, is required to fully fund this Project at the estimated total cost of $2,670,000.00. The staff report provided a detailed budget for this Project, as follows:

         
   

Expenditures to date
Contract No. 2010-BT-7
Construction Contingency (10%)
Construction Support Services (testing, consultants)
Construction Administration (staff time 15%)
ICAP (64.29%)
Miscellaneous (printing, advertisement, mailing, etc.)

Total Project Budget

$ 250,000.00

1,746,157.00

174,615.00

15,000.00

288,116.00

185,230.00

10,882.00

$ 2,670,000.00

 
     
   

The staff report stated that the total Project budget of $2,670.000.00 will be funded as follows: $2,447,279.00 ARRA grant funds (92%), $197,175.00 FTA grant funds 7%, and $25,546.00 District funds (1%). 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 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 authorize a budget increase in the FY 09/10 Bus Transit Division Capital Budget in the amount of $551,000.00, relative to Contract No. 2010-BT-7, San Rafael Bus Facility Wash Rack Replacement, to be funded with $551,000.00 American Recovery and Reinvestment Act funds, establishing a total Project budget of $2,670,000.00.

Action by the Board at its meeting of May 28, 2010
Refer to the Building and Operating Committee Meeting of May 27, 2010

AYES (10): Directors Cochran, Elsbernd, Kerns, Moylan, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None

     
  b.

Budget Decrease in the FY 09/10 Ferry Transit Division Capital Budget Relative to the Award of Contract No. 2010-FT-13, San Francisco Ferry Terminal Accessible Restrooms, to Integra Construction Services, Inc.

At the May 27, 2010 meeting of the Building and Operating Committee, the recommendation to award the above-referenced contract to Integra Construction Services. Inc., was continued for two weeks, and the staff recommendation relative to this award will be placed on the Finance-Auditing Committee agenda for discussion at its June 10, 2010 meeting.

Action by the Board – None Required

     
  c.

Budget Decrease in the FY 09/10 Ferry Transit Division Capital Budget Relative to the Award of Contract No. 2010-FT-18, Larkspur Ferry Terminal Berths and Channel Maintenance Dredging, to Dutra Dredging Company

In a memorandum to Committee, Deputy District Engineer Ewa Bauer, District Engineer Denis Mulligan and General Manager Celia Kupersmith reported on staff’s recommendation to authorize a Project budget decrease in the amount of $5,803,000.00, relative to Contract No. 2010-FT-18, Larkspur Ferry Terminal Berths and Channel Maintenance Dredging, establishing a total Project budget of $9,730,000.00. The staff report provided details regarding the award of Contract No. 2010-FT-18, Larkspur Ferry Terminal Berths and Channel Maintenance Dredging, to Dutra Dredging Company, in the amount of $6,339,955.00. The staff report stated that the Larkspur Ferry Terminal Berths Dredging (Berths Dredging) Project is included in the FY 09/10 Ferry Transit Division Capital Budget at a total cost of $2,133,000.00, and is funded with $1,706,400.00 federal funds, and $426,600.00 District funds. The staff report also stated that the Larkspur Ferry Terminal Channel Dredging (Channel Dredging) Project is included in the FY 09/10 Ferry Transit Division Capital Budget at a total budget of $13,400,000.00, and is funded with $10,720,000.00 federal funds, and $2,680,000.00 District funds. To date, approximately $300,000.00 has been expended or encumbered for the Berths Dredging Project and approximately $500,000.00 has been expended or encumbered for the Channel Dredging Project to support the design, staff costs and indirect costs. The staff report stated that a Project budget decrease in the amount of $5,803,000.00 will provide the required Project budget of $9,730,000.00. The staff report provided a detailed budget for this Project, as follows:

     
   

Expenditures/Encumbrances to date
Contract No. 2010-FT-18
Construction Contingency (15%)
Construction Support Administration (10%)
ICAP @ 64.29%
Dock Rental to Temporarily Store Vessels
Ferry Staff Costs related to Vessel Storage
Permit Application Fees from State Lands Commission
Sediment Disposal Fees (RWQCB/RMP Monitoring Program
Sediment Disposal Fees (EPA.SFDODS)
Supplemental Work
Miscellaneous

Total Project Budget

$ 800,000.00

6,339,955.00

950,993.00

640,000.00

411,456.00

32,000.00

100,000.00

2,000.00

125,000.00

75,000.00

250,000.00

3,596.00

$ 9,730,000.00

 
     
   

The staff report stated that a contingency fund of 15% of the bid amount, or $950,993.00, is considered appropriate for this Project due to potential unknowns associated with underwater work and potential conflicts with a concurrent adjacent upstream dredging project at the Larkspur Marina. In addition, new federal regulations for a protected fish, the green sturgeon, are expected to be issued this summer during construction, and may affect the length of the dredging season and certain dredging practices. 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 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 authorize a Project budget decrease in the FY 09/10 Ferry Transit Division Capital Budget in the amount of $5,803,000.00, relative to Contract No. 2010-FT-18, Larkspur Ferry Terminal Berths and Channel Maintenance Dredging, establishing a total Project budget of $9,730,000.00.

Action by the Board at its meeting of May 28, 2010
Refer to the Building and Operating Committee Meeting of May 27, 2010

AYES (10): Directors Cochran, Elsbernd, Kerns, Moylan, Newhouse Segal, Pahre and Snyder; Second Vice President Eddie; First Vice President Reilly; President Boro
ABSTAIN (2): Directors Sobel and Stroeh
NOES (0): None

     
  d.

Budget Increase in the FY 09-10 Ferry Transit Division Capital Budget Relative to Contract No. 2010-FT-10, Installation of New Propulsion System for Re-Powering and Dry-Docking of the M.V. Del Norte, with Ice Floe, LLC, dba Nichols Brothers Boat Builders

In a memorandum to Committee, Marine Projects Manager/Ferry Division Christian Stark, Deputy General Manager/Ferry Division James Swindler, and General Manager Celia Kupersmith reported on staff’s recommendation to authorize a budget increase in the amount of $250,000.00 in the FY 09/10 Ferry Transit Division Capital Budget, relative to Contract No. 2010-FT-10, Installation of New Propulsion System for Re-Powering and Dry-Docking of the M.V. Del Norte, establishing a total Project budget of $6,075,000.00, to be funded from District reserves. The staff report provided details regarding award of Contract No. 2010-FT-10, Installation of New Propulsion System for Re-Powering and Dry-Docking of the M.V. Del Norte, to Ice Floe, LLC, dba Nichols Brothers Boat Builders, in the amount of $2,313,314.00. The staff report stated that a contingency fund of $375,000.00 was established and the Board authorized the General Manager to approve change orders up to the contingency amount, requiring Board concurrence for change orders over $50,000.00. Acting within her authority and with the required concurrence, change orders have been authorized in the amount of $229,851.38. In addition, the staff report stated that delivery costs are anticipated to be $100,000.00 and sales taxes to be $90,000.00. In order to fund these items and leave sufficient funds available for possible remaining change order items that may occur during final commissioning, additional funds in the amount of $250,000.00 must be added to the Contract contingency fund. The staff report provided the following list of necessary Change Orders:

     
Change Order Description
Amount of Change Order
Miscellaneous Hull Repairs
$9,917.00
Bilge Pump Rebuild & Sewage Pump Replacement
$10,385.00
Replace Switchboard Shore Power Breaker
$1,382.50
Shore Power Modifications
$12,570.00
Replace Bilge Alarm Sensors
$3,732.50
Replace Corrosion Meter Reference Cells
$440.00
Replace Faulty CCTV Power Supply
$700.00
Replace Broken Bilge Suction Strainer with foot valve
$491.00
Replace Broken, Wasted and Corroded Piping
$11,398.00
USCG hull inserts and Hydraulic Piping Replacement
$74,569.60
Sound Propeller Installation & Sea Trial Support Services
$17,308.00
USCG Replacement of Port Fuel Tank Top
$27,476.00
Rebuild Bilge/Fire Pumps $5,609.00
$5,609.00
Addition Tonnage Engineering/Admeasurement
$1,641.00
Total of Remaining Change Orders
$177,619.60
     
   

The staff report stated that this Project is included in the FY 09/10 Ferry Transit Division Capital Budget at a total cost of $5,825,000.00 and is funded with $3,162,142.00 Carl Moyer grant funds (54%), $2,630,858.00 FTA grant funds (45%), and $32,000.00 District (1%). A capital budget increase in the amount of $250,000.00 from District reserves will fully fund this project at a total cost of $6,075,000.00 and the Project will be funded as follows: $3,162,142.00 Carl Moyer grant funds (52%), $2,630,858.00 FTA grant funds (43%) and $282,000.00 District (5%). A copy of the report is available from 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 authorize a budget increase in the FY 09/10 Ferry Transit Division Capital Budget in the amount of $250,000.00, relative to Contract No. 2010-FT-10, Installation of New Propulsion System for Re-Powering and Dry-Docking of the M.V. Del Norte, establishing a total Project budget of $6,075,000.00, to be funded from District reserves.

Action by the Board at its meeting of May 28, 2010
Refer to the Building and Operating Committee Meeting of May 27, 2010

AYES (12): Directors Cochran, Elsbernd, Kerns, Moylan, Newhouse Segal, Pahre, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None

     
3.

Approve Actions Relative to Establishing a Carpool Toll and Increasing the Multi-Axle Vehicle Toll Rates 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 actions relative to establishing a carpool toll and increasing the multi-axle vehicle toll rates on the Golden Gate Bridge.

The staff report stated that the District has identified a $132 million projected deficit over the next five years. The District created a Financial Planning Advisory Committee (Advisory Committee) in May 2009, for the purpose of identifying possible solutions to address the projected deficit. The Advisory Committee drafted and recommended approval of FY 09/10 Financial Plan for Achieving Long-Term Financial Stability (Plan) which laid out specific initiatives that, once implemented, will help restore the District to stable financial footing. The Board of Directors approved said Plan at its meeting of October 30, 2009.

The report also stated that Phase I of the Plan includes Initiative No. 23, which calls for increasing certain special-category toll rates, specifically for carpools and multi-axle vehicles. The proposed carpool toll will allow carpools and clean air vehicles to financially support District operations and maintenance while generating a projected $1.3 million in additional annual toll revenues in FY 10/11 and maintaining a toll incentive for carpools and clean air vehicles.

The report further stated that the proposed increase in the multi-axle rates will eliminate multi-axle vehicle toll disparities between the Golden Gate Bridge and California state-owned bridges, while generating additional projected toll revenues of approximately $600,000.00 in FY 11/12 and $1.2 million in annual toll revenues upon full implementation in FY 12/13. The options under consideration by the District to change existing tolls for the Golden Gate Bridge do not require federal approval; and, therefore exempt from the National Environmental Policy Act process. The California Environmental Quality Act statutorily exempts the District’s proposal to modify existing tolls on the Golden Gate Bridge to help restore the District to stable financial footing.

The staff report stated that the carpool toll is recommended to be set at 50% of the cash toll for two-axle vehicles, or $3.00 for FY 10/11, and will apply to two-axle vehicles with three or more occupants, motorcycles and buses during the District’s carpool hours, from 5:00 a.m. to 9:00 a.m. and from 4:00 p.m. to 6:00 p.m., Mondays through Fridays. Multi-axle vehicle tolls are recommended to be set as follows:

  • $5.00 per axle for vehicles with three or more axles paying with FasTrak®, with a maximum toll of $35; and,
  • $6.00 per axle for vehicles with three or more axles paying with cash, with a maximum toll of $42; and,
  • It is proposed that 50% of the multi-axle toll rate increase (rounded down for cash toll payment only) will take effect on July 1, 2011, and the remaining 50% of the multi-axle toll increase will take effect on July 1, 2012, summarized as follows:
     
Current
July 1, 2011
July 1, 2012
Axles
FasTrak Toll
Cash Toll
FasTrak Toll
Cash Toll
FasTrak Toll
Cash Toll
3
$7.50
$9
$11.25
$13
$15
$18
4
$10.00
$12
$15.00
$18
$20
$24
5
$12.00
$15
$18.75
$22
$25
$30
6
$15.00
$18
$22.50
$27
$30
$36
7
$17.50
$21
$26.25
$31
$35
$42
8
$20.00
$24
$26.25
$31
$35
$42
9
$22.50
$27
$26.25
$31
$35
$42
10
$25.00
$30
$26.25
$31
$35
$42
11
$27.50
$33
$26.25
$31
$35
$42
12
$30.00
$36
$26.25
$31
$35
$42
     
 

The staff report stated that the District pursued a comprehensive public involvement campaign regarding the proposals for the establishment of a carpool toll and for the increase in the multi-axle vehicle toll rate, with outreach including the following:

  • Three community open houses: San Rafael, April 7; Petaluma, April 13; and Golden Gate Bridge, April 15.
  • Two public hearings: Whistlestop Wheels, San Rafael, May 12; Golden Gate Bridge, May 14.
  • Notices for the open houses and public hearings were placed in the San Francisco Chronicle, Marin Independent Journal, Commuter Times, Santa Rosa Press Democrat and La Voz newspapers. Flyers were developed and distributed to carpool and multi-axle vehicles in the toll lanes. Information regarding the open houses was posted on the District’s website, Facebook page and broadcasted via the Twitter account. Information regarding the open houses and public hearings was mailed to the California Trucking Association with a request that it be disseminated to their constituents. Posters announcing the open houses and public hearings were also displayed in transit vehicles. Finally, a series of emails was sent to opt-in subscribers informing them of the open houses and public hearings.
  • A press release was issued and interviews given to various Bay Area new media outlets by the Public Affairs Director commencing on February 11, 2010, and continuing through the public outreach period noted above.

The staff report provided a summary of the public comments received by the District on this matter. At the close of the public hearing period on May 14, 2010, 100 comments offered by 80 individuals and organizations were received by the District. Of these, 6 comments (6.0%) expressed support for the establishment of a carpool toll and 25 comments (25.0%) suggested alternatives to the carpool toll proposal. Sixty-six comments (66.0%) expressed opposition to the establishment of a carpool toll, including 64 comments specifically opposing a carpool toll and 2 opposing an increase in the toll rates for multi-axle vehicles. Three comments (3.0%) made no statement of opposition to or support for the carpool toll or the increase in the toll rates for multi-axle vehicles.

In addition, the staff report stated that implementation of a carpool toll on July 1, 2010, is projected to generate $1.2 million in additional annual toll revenues in FY 10/11, impacting 2.3% of southbound traffic or an estimated 433,000 vehicles annually. Implementation of the first half of the multi-axle vehicle toll increase on July 1, 2011, is projected to generate approximately $600,000.00 in additional annual toll revenues, impacting 0.75% of southbound traffic or an estimated 137,000 vehicles annually; total additional toll revenues in FY 11/12 are estimated to be $1.8 million. Implementation of the remainder of the multi-axle vehicle toll increase on July 1, 2012, is projected to generate approximately $600,000.00 in additional annual toll revenue, resulting in $2.4 million in total additional toll revenues in FY 12/13. A copy of the staff report is available from the Office of the District Secretary and on the District’s web site.

At the meeting, Mr. Wire summarized the staff report, noting that, if the Board approves this item, the carpool toll will go into effect in five weeks and is projected to raise $1.2 million. The toll increase for multi-axle vehicles, if approved, is projected to raise approximately $1.3 million when fully implemented in approximately two years.

Discussion ensued, including the following comment:

  • Director Sobel commented that making the decision to charge a toll for carpools and increase the toll rates for multi-axle vehicles has been an extremely difficult decision to make. He noted that the District has a Board-approved strategic financial plan in place that must be met in order for the District to be able to continue meeting its goals while remaining on firm financial footing. He stated that he was in full support of this incremental decision. He commented that he had talked personally with members of the public at the public hearings that were held.

Staff recommended and the Committee concurred by motion made and seconded by Directors MOYLAN/REILLY 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 establishing a carpool toll and increasing the multi-axle vehicle toll rates on the Golden Gate Bridge, as follows:

  a.
Establish a carpool (carpools are two-axle vehicles, with three or more occupants, motorcycles and buses) toll rate of $3.00, 50% of the current cash toll rate of $6.00, during the District’s carpool hours of 5:00 a.m. to 9:00 a.m., and 4:00 p.m. to 6:00 p.m., Mondays through Fridays, effective July 1, 2010; with the understanding that: vehicles eligible for the carpool toll will be required to register with FasTrak® and use a transponder to pay their toll; clean air vehicles with white California DMV Clean Air decals would qualify for the carpool toll; and, the carpool toll rate would not apply on New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas;
 

b.

Increase the multi-axle vehicle toll for vehicles with three or more axles, as follows: a $5.00 per axle toll for vehicles with 3+ axles, paying with FasTrak®, with a 7-axle maximum toll of $35.00, and a $6.00 per axle toll for vehicles with 3+ axles, paying with cash, with a 7-axle maximum toll of $42.00, with 50% of the increase to be implemented on July 1, 2011, and the remaining 50% of the increase to be implemented on July 1, 2012; with the understanding that staff is directed to investigate and report back to the Board on the legality, fiscal impact, and operational aspects of creating a new toll classification category for privately operated, California Public Utilities Commission certificated providers of regularly scheduled bus transportation services from established points in Sonoma and Marin Counties to the San Francisco International and Oakland International Airports under which such vehicles would continue to be treated as carpools during designated carpool hours and during all other hours of the day would pay a reduced per axle toll rate equivalent to 50 percent of the otherwise applicable two-axle toll;
  c.
Amend Master Ordinance 2010, accordingly;
  d.
Find and declare that these toll increases are necessary for the purposes 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 service areas, and therefore these tolls are exempt from the California Environmental Quality Act under Section 21080(b)(8) of the Public Resources Code; and,
  e.

File Notices of Exemption under the California Environmental Quality Act.

Action by the Board at its meeting of May 28, 2010
Ordinance

     
 

AYES (14): Directors Chu, Cochran, Elsbernd, Kerns, Moylan, McGlashan, Newhouse Segal, Pahre, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None

[Director Sanders arrived at this time.]

     
4.

Authorize Execution of a Professional Services Agreement with John Glenn Adjusters & Administrators, Inc., Relative to Request for Proposals No. 2010-D-5, Third Party Administrator for Public Liability and Fleet Claims Investigation and Adjustment Services

In a memorandum to Committee, Director of Risk Management/Safety William Stafford, Deputy General Manager/Administration and Development Z. Wayne Johnson, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s recommendation to authorize execution of a Professional Services Agreement with John Glenn Adjusters & Administrators, Inc., relative to Request for Proposals (RFP) No. 2010-D-5, Third Party Administrator for Public Liability and Fleet Claims Investigation and Adjustment Services, in an amount not to exceed $781,728.00, for a three-year term, effective July 1, 2010, plus two one-year options to be exercised at the discretion of the General Manager, in an amount not to exceed $269,316.00 for Year Four, and $274,692.00 for Year Five, in an amount not to exceed $1,325,736.00; with the understanding that requisite funds are included in the FY 10/11 Operating Budget and requisite funds will be budgeted accordingly in each subsequent fiscal year.

The staff report stated that seven Third Party Administrator (TPA) firms submitted proposals to the District by the due date of March 23, 2010. A Selection Committee reviewed the proposals, applying evaluation criteria set forth in the RFP. The staff report listed the four finalists and stated that the Selection Committee determined that John Glenn Adjusters & Administrators, Inc. (JGAA) was best qualified to perform the required services. In addition, the staff report stated that the District has used a TPA for many years to adjust, defend and settle bus and public liability claims against the District. The staff report states that JGAA ranked highest for the following reasons:

  • Strong qualifications and experience with Bay Area transit providers, including many years of providing service to the District;
  • A risk management information system with superior risk management reports;
  • Very good litigation management controls;
  • Thorough knowledge of key court venues and judges;
  • A low employee turnover rate; and,
  • Competitive pricing.

The staff report noted that JGAA has complied with Disadvantaged Business Enterprise (DBE) requirements applicable to this Agreement, and that no DBE participation is anticipated during the performance of this Agreement. The staff report also stated that the cost of the professional services relative to RFP No. 2010-D-5 for the first year will be $258,852.00; for the second year, $258,852.00; and, for the third year, $264,024.00. The option year costs will be $269,316.00 for Option Year 4 and $274,692.00 for Option Year 5. The total cost, including the option years, will be $1,325,736.00. A copy of the staff report is available from the Office of the District Secretary and on the District’s web site.

At the meeting, Mr. Stafford summarized the staff report, stating that the Selection Committee included staff from the Bus Transit Division, Risk Management/Safety Office, District Secretary’s Office and the Auditor-Controller’s Office.

Staff recommended and the Committee concurred by motion made and seconded by Directors COCHRAN/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 execution of a Professional Services Agreement with John Glenn Adjusters & Administrators, Inc., San Ramon, CA, relative to Request for Proposals (RFP) No. 2010-D-5, Third Party Administrator for Public Liability and Fleet Claims Investigation and Adjustment Services, in an amount not to exceed $781,728.00, for a three-year term, effective July 1, 2010, plus two one-year options to be exercised at the discretion of the General Manager, in an amount not to exceed $269,316.00 for Year Four, and $274,692.00 for Year Five, for a total amount not to exceed $1,325,736.00; with the understanding that requisite funds are included in the FY 10/11 Operating Budgets, and requisite funds will be budgeted accordingly in each subsequent fiscal year.

Action by the Board at its meeting of May 28, 2010
Resolution

AYES (15): Directors Chu, Cochran, Elsbernd, Kerns, Moylan, McGlashan, Newhouse Segal, Pahre, Sanders, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None

     
5.

Authorize Execution of a Payment Transaction with CompuCom Systems, Inc., for Additional Microsoft Licenses

In a memorandum to Committee, Director of Information Systems Robert Haar, Deputy General Manager/Administration and Development Z. Wayne Johnson and General Manager Celia Kupersmith reported on staff’s recommendation to authorize execution of a payment transaction with CompuCom Systems, Inc., in the amount of $78,365.00, for additional Microsoft licenses to be issued during the contract period of June 6, 2006, through June 6, 2011, with the understanding that requisite funds are available in the District Division Operating Budget/Information Systems Department.

The staff report stated that District entered into a five-year “Enterprise Agreement” with CompuCom Systems, Inc., to purchase Microsoft licenses. Since July 2006, there has been a need for additional Microsoft licenses due to expanded automation. The staff report cited the following examples of this expansion:

  • Personal computers for ironworkers, operating engineers, ferry captains and road supervisors;
  • Personal computers in Bridge, Bus and Ferry shops to provide access to Maximo from the shop floors;
  • Laptops for Bus and Ferry Maintenance shops and Bus Road Supervisors; and,
  • Additional server and database licenses to support much more stored data, and for new applications, such as the GFI fare box application, Bus video, video screen displays in Bus layover rooms, in addition to support Transtat and Data Cubes that provide the information needed for decisions on Golden Gate Transit changes.

The staff report noted that requisite funds are available in the District Division Operating Budget/Information Systems Department to cover this expense. A copy of the staff report is available from 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/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 payment transaction with CompuCom Systems, Inc. in the amount of $78,365.00, for additional Microsoft licenses to be issued during the contract period of June 6, 2006, through June 6, 2011, with the understanding that requisite funds are available in the District Division Operating Budget/Information Systems Department.

Action by the Board at its meeting of May 28, 2010
Resolution

AYES (15): Directors Chu, Cochran, Elsbernd, Kerns, Moylan, McGlashan, Newhouse Segal, Pahre, Sanders, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
NOES (0): None

     
6.

Initial Presentation of the Draft FY 10/11 Operating and Capital Budgets

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith reported on staff’s initial presentation of the proposed FY 10/11 Operating and Capital Budgets, which is scheduled for Board action on June 25, 2010. The staff report summarized expenses and revenues, including Operating Budget revenues of $162.4 million; Operating Budget expenditures of $170.6 million; Capital Budget revenues of $64.3 million; Capital Budget expenditures of $76 million; District reserves of $8.2 million, which will be used to fund the FY 10/11 Operating Budget; and, District reserves of $11.7 million, which will be used to fund the FY 10/11 Capital Budget. In addition, the staff report provided an overview of the Operating Budget.

The staff report stated that FY 10/11 proposed Operating Budget of $170.6 million is $8.8 million more than the FY 09/10 Estimated Actual expenses of $161.8 million, with the increase largely due to funding vacant positions and increased costs in fringe benefits and fuel. The staff report stated that the increase in expenses is offset by the implementation of the Financial Plan Initiatives, approved by the Board at its special Meeting of October 30, 2009. Revenue is estimated to be $162.4 million, an increase of approximately $2.7 million, or (1.7%), from FY 09/10 Estimated Actual revenue. The staff report notes that this increase is primarily the result of the additional funds from the State Transit Assistance Program (STA) program, but is offset by a decrease in revenue to Transportation Development Act (TDA), the Marin County Transit District contract and the Investment Income for FY 10/11. The staff report stated that this budget includes a 1.75% salary increase for Coalition-represented and non-represented employees effective January 1, 2011, and assumes no salary increase effective March 1, 2011, for ATU represented employees, pending future contract negotiations. This budget also includes changes to the District reserves structure and the Table of Organization. The staff report stated that the proposed operating budget decreases the projected deficit for FY 10/11 from $12.7 million to $8.2 million. The decrease is almost entirely due to reduced capital contribution expense as a result of the revised 10-year capital spending plan. The staff report stated that the proposed Operating Budget reflects current service levels in the Bridge, Bus and Ferry operations, as well as implementing various Financial Plan Initiatives. The staff report stated that the proposed Financial Plan initiatives will result in the elimination of eight (8) operations and administrative positions, of which seven (7) are or will be vacant, resulting in one (1) layoff.

The staff report stated that the FY 10/11 Proposed Capital Budget includes an expenditure of $76 million, funded with $11.7 million District funds and $64.3 million federal, state and local grant funds, and supports implementation of new and continuing projects necessary to maintain services and facilities and to further high priority safety and security projects. The staff report stated that the FY 10/11 Proposed Capital Budget contains estimates of project expenditures for FY 09/10 and assumes completion of several projects by June 30, 2010.

The staff report stated that the proposed FY 10/11 Operating and Capital Budgets result in the use of $19.9 million in reserves ($8.2 million to FY 10/11 Operating Budget and $11.7 million to FY 10/11 Capital Budget) to cover the projected operating deficit and the District’s portion of capital expenditures. The FY 10/11 Proposed Budget also includes $21.4 million in transfers to reserves, resulting in a net reserve increase of $1.5 million, some of which will be offset by the need to fund specific liability reserve requirements.

At the meeting, Mr. Wire summarized the staff report. He stated that no action was required to be taken today, because approval of the FY 10/11 Budget would be included on the June 10, 2010 Board of Directors Agenda. He stated that, once approved, the Budget would go into effect on July 1, 2010.

Discussion ensued, including the following comments and inquiries:

  • Director Stroeh made the following inquiries:
    • He inquired as to whether the majority of the reserves was already committed. In response, Mr. Wire confirmed that it was, stating that the Capital Plan commits all reserves in approximately 2-1/2 years. He stated that the Board has not acted on the Capital Plan for all those projects, but if they did, then all reserves would have been committed.
    • He inquired as to whether funds would be available in case of an emergency. In response, Mr. Wire stated that there are reserves set aside directly for that purpose. If considerably more than that amount were needed, the District would cease to move forward on capital plans and divert those resources.
  • President Boro inquired as to whether the seismic retrofit of the Golden Gate Bridge and the District’s plans for covering its $75 million commitment to the Doyle Drive Reconstruction Project could be covered in detail over the next two meetings. In response, Mr. Wire stated these two items could be added to future agendas.
  • Director Newhouse-Segal commented that public budgets are often very complicated, and thanked Mr. Wire for providing clarity and conciseness.
  • Director Elsbernd made the following inquiries:
    • He inquired as to how the “Expense Budget Assumption” on page 33 that shows medical and prescription drug costs increasing approximately 14% over FY 09/10 Estimated Actual Costs compares to the assumptions that were made previously in the Five-Year Plan. In response, Mr. Wire stated that the expense budget assumption is higher. He stated that the Five-Year Plan looks at historical data over a fairly long period of time.
    • He inquired as to whether the “ATU Pension contribution (17.165%)” in the list of “Expense Budget Assumptions” was meant to indicate the employer’s contribution or the employee’s contribution. In response, Mr. Wire stated that these figures all refer to the employer contribution. Ms. Kupersmith added that the employee Public Employees’ Retirement System (PERS) contribution is 8% and the ATU pension contribution from employees is 2%. Until approximately one year ago, this was at 0%, but has changed through successful negotiations.
    • He inquired as to whether PERS had established their actual rate for 2011. In response, Mr. Wire indicated this is the actual rate that the District will pay. PERS establishes the rate from 18 to 24 months ahead of time.
    • He inquired as to whether PERS continues to delay the employer increase that was expected. In response, Mr. Wire stated that employer increases have been delayed, but an increase is expected by next year, of a little less than 3% over the 16.3% presently in place. This will amount to approximately $1.1 million.
  • Director Sanders made the following inquiries:
    • She inquired as to whether the PERS increase is always charged to the employer. In response, Ms. Kupersmith stated that employers can negotiate with unions to share costs. She added that District employees are contributing 8%, which is 100% of what the state law allows.
    • She inquired as to how the 1.75% salary increase was arrived at. In response, Ms. Kupersmith stated that this increase was negotiated.
  • Director Stroeh commented that the proposed budget presented this morning is a good, easy-to-read document and thanked Mr. Wire and his staff.
     
7.

Monthly Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares (for Ten Months Ending April 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, tolls, transit patronage and fares, for ten months ending April 30, 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

     

8.

Monthly Review of Financial Statements for Ten Months Ending April 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

     
9.

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. 10., Conference with Legal Counsel – Pending Litigation, Government Code Section 54956.9(a), Report of Athens Administrators, Dennis Koenig 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 further reported that this matter will be referred to the Board of Directors for disposition.

   
10.

Public Comment

There was no public comment.

   
11.

Adjournment

All business having been concluded, the meeting was adjourned at 9:40 a.m.

   

 

Respectfully submitted,

s/ J Dietrich Stroeh, Chair
Finance-Auditing Committee