September 23, 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/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, CA, on Thursday, September 23, 2010, at 10:25 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 (4): Directors Kerns, Newhouse Segal, Reilly and Snyder

Committee of the Whole Members Present (12): Directors Cochran, Elsbernd, Kerns, Moylan, Newhouse Segal, Pahre, Snyder, Sobel and Stroeh; Second Vice President Eddie; First Vice President Reilly; President Boro
Committee of the Whole Members Absent (7): Directors Brown, Campos, Chu, Dufty, Grosboll, McGlashan and Sanders

Staff Present: General Manager Denis Mulligan; Acting District Engineer Ewa Bauer; Auditor-Controller Joseph Wire; Secretary of the District Janet Tarantino; Attorney David Miller; Deputy General Manager/Bridge Division Kary Witt; Deputy General Manager/Ferry Transit Division James Swindler; Deputy General Manager/Administration and Development Z. Wayne Johnson; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Lona Franklin

Visitors Present: Nancy Jones, PFM Asset Management LLC

     
1.

Ratify Actions by the Auditor-Controller

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Denis Mulligan 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 (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. She reported that the national unemployment rate remains high, at 9.5%, with the rate in California at 12.3%, as of June 2010. She added that many people who have had to sell their homes using a short sale have found they are unable to qualify for a new loan to purchase another house.

Ms. Jones estimated that interest rates would remain very low for the foreseeable future. She stated that the two-year Treasury yield has fallen to a new record low, at 0.42% and that, during only one month during 2010, it did rise above 1%. Ms. Jones reported that the District’s portfolio is earning approximately 3%. She indicated that the investments in the District’s portfolio are well diversified and most will mature in less than one year.

[President Boro arrived at this time.]

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 the following actions by the Auditor-Controller:

  a. The Board of Directors ratifies commitments and/or expenditures totaling $139,000.00 for the period July 1, 2010, through August 31, 2010.
  b. Ratify investments made by the Auditor-Controller during the period July 13, 2010, through September 13, 2010, as follows:
     
Security
Purchase Date
Maturity Date
Original Cost
Percent Yield
ING Funding LLC Comm. Paper
07/14/10
10/14/10
5,199,880.06
0.46
Toyota Motor Credit Comm. Paper
07/15/10
10/14/10
4,994,186.11
0.46
BNP Paribas Fin Inc., Comm. Paper
08/03/10
11/03/10
4,063,154.42
0.37
Toyota Motor Credit Comm. Paper
08/03/10
11/03/10
4,495,515.00
0.39
BNP Paribas Fin Inc., Comm. Paper
08/16/10
11/15/10
2,134,380.20
0.30
Credit Agri North America Comm. Paper
08/16/10
11/15/10
5,995,753.33
0.28
Credit Agri North America Comm. Paper
08/20/10
02/22/11
6,981,193.33
0.52
ING Funding LLC Comm. Paper
08/20/10
12/20/10
1,598,210.67
0.33
Societe Generale North America Comm. Paper
08/20/10
11/19/10
2,498,104.17
0.30
     
  c.
Authorize the Auditor-Controller to re-invest, within the established policy of the Board of Directors, investments maturing between August 3, 2010, and October 11, 2010, as well as the investment of all other funds not required to cover expenditures that may become available; and,
  d.

Accept the Investment Reports for July and August 2010, as prepared by PFM.

Action by the Board at its meeting of September 24, 2010
CONSENT CALENDAR

     
  AYES (12): Chair Stroeh; Vice Chair Pahre; Directors Cochran, Eddie, Elsbernd, Kerns, Moylan, Newhouse Segal, Reilly, Snyder and Sobel; President Boro
NOES (0): None
     
2. Authorize Budget Adjustment(s) and/or Transfer(s)
     
  a.

Budget Increase in the FY 10/11 Ferry Transit Division Capital Budget Relative to the Award of Contract No. 2011-FT-3, Larkspur Ferry Terminal Utility Rehabilitation, to JMB Construction, Inc.

In a memorandum to Committee, Deputy District Engineer Ewa Bauer, Auditor-Controller Joseph Wire and General Manager Denis Mulligan reported on staff’s recommendation to authorize a budget increase in the amount of $625,000.00, relative to the award of Contract No. 2011-FT-3, Larkspur Ferry Terminal Utility Rehabilitation. The staff report provided details regarding the award of Contract No. 2011-FT-3 to JMB Construction, Inc., South San Francisco, CA. The estimated total cost of $1,425,000.00 will be funded with $1,140,000.00 Federal Transit Administration (FTA) grant funds (80%) and $285,000.00 District Reserves (20%). 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/SOBEL 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 10/11 Ferry Transit Division Capital Budget in the amount of $625,000.00, relative to Contract No. 2011-FT-3, Larkspur Ferry Terminal Utility Rehabilitation, establishing a total Project budget of $1,425,000.00, to be funded with $1,140,000.00 Federal Transit Administration grant funds (80%) and $285,000.00 District Reserves (20%).

Action by the Board at its meeting of September 24, 2010
Refer to the Building and Operating Committee Meeting of September 23, 2010

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

     
  b.

Budget Increase in the FY 10/11 Ferry Transit Division Capital Budget Relative to the Award of a Sole Source Contract No. 2011-FT-7, Parts and Services for the Overhaul of the M.V. Mendocino Main Engines, to Valley Power Systems North, Inc.

In a memorandum to Committee, Deputy District Engineer Ewa Bauer, Auditor-Controller Joseph Wire and General Manager Denis Mulligan reported on staff’s recommendation to authorize a budget increase in the amount of $90,000.00, relative to the award of Contract No. 2011-FT- 7, Parts and Services for the Overhaul of the M.V. Mendocino Main Engines. The staff report provided details regarding the award of Contract No. 2011-FT-7 to Valley Power Systems North, Inc., Hayward, CA. The estimated total cost of $240,000.00 will be funded with $212,472.00 Federal Transit Administration grant funds (88.53%) and $27,528.00 District Reserves (11.47%). 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/SOBEL 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 10/11 Ferry Transit Division Capital Budget in the amount of $90,000.00, relative to Contract No. 2011-FT-7, Parts and Services for the Overhaul of the M.V. Mendocino Main Engines, establishing a total Project budget of $240,000.00, to be funded with $212,472.00 Federal Transit Administration grant funds (88.53%) and $27,528.00 District Reserves (11.47%).

Action by the Board at its meeting of September 24, 2010
Refer to the Building and Operating Committee Meeting of September 23, 2010

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

     
3.

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

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Denis Mulligan provided a schedule comparing categories of Bridge traffic, as well as a monthly review of Bridge traffic, tolls, transit patronage and fares, for two months ending July 31, 2010 and August 31, 2010. Copies of the reports are available in the Office of the District Secretary and on the District’s web site.

Discussion ensued, including the following inquiries:

  • Director Snyder inquired as to the reason bus transit and ferry transit ridership and revenues have increased. In response, Mr. Wire stated that staff did not have a clear answer regarding the rise in the last two months. He stated that traffic across the Golden Gate Bridge also decreased slightly during the preceding two months. He cautioned that trends cannot be determined using only two months statistics, but that these results are welcome. Mr. Mulligan stated that the current traffic congestion associated with the reconstruction of Doyle Drive may encourage commuters to choose public transportation.
  • Director Sobel inquired as to whether the District conducts spot passenger surveys, to understand the reasons behind monthly changes in the statistics. Mr. Mulligan responded that the District examines trends as they develop.

Action by the Board – None Required

     
4. Monthly Review of Financial Statements for the Two Months Ending July and August 2010
     
  a.

Statement of Revenue and Expenses

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Denis Mulligan provided a financial statement entitled, Statement of Operating Revenues and Expenses. Copies of the reports are 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 Prior, Auditor-Controller Joseph Wire and General Manager Denis Mulligan provided a financial statement entitled, Statement of Capital Programs and Expenditures. Copies of the reports are 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 reported that no closed session will be held as Agenda Item No. 6, Closed Session, Conference with Legal Counsel – Pending Litigation, Pursuant to Government Code Section 54956.9(a), Report of Sterling and Clack, in the matter of Daniel Olivera vs. Golden Gate Bridge, Highway and Transportation District, will be continued to a future date.

     
6.

Public Comment

There was no public comment.

     
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