March 10, 2011

 

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, March 10, 2011, at 10:55 a.m., Chair Stroeh presiding.

Committee Members Present (8): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Elsbernd, Grosboll and Sobel; President Reilly (Ex Officio)
Committee Members Absent (1): Director Moylan
Other Directors Present (2): Director Rabbitt; First Vice President Eddie

Committee of the Whole Members Present (10): Directors Boro, Cochran, Elsbernd, Grosboll, Pahre, Rabbitt, Sobel and Stroeh; First Vice President Eddie; President Reilly (Ex Officio)
Committee of the Whole Members Absent (6): Directors Brown, Campos, Chu, McGlashan, Moylan and Snyder

[Note: On this date, there were three vacancies on the Board of Directors.]

Staff Present: General Manager Denis Mulligan; District Engineer Ewa Bauer; Auditor-Controller Joseph Wire; District Secretary Janet Tarantino; Attorney David Miller; Attorney Madeline Chun; Deputy General Manager/Bridge Division Kary Witt; Deputy General Manager/Ferry Transit Division Jim Swindler; Deputy General Manager/Administration and Development Z. Wayne Johnson; Electronic Revenue Collection Program Manager David Dick; Public Affairs Director Mary Currie; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Lona Franklin

Visitors Present: None

 
 
1.

Authorize Execution of Amendment No. 1 to Professional Services Agreement No. 2010-D-9, Strategic Development Plan for All Electronic Toll Collection, with Traffic Technologies Inc., to Provide Technical and Project Management Services for All Electronic Tolling Conversion

In a memorandum to Committee, Electronic Revenue Collection Program Manager David Dick, Auditor-Controller Joseph Wire and General Manager Denis Mulligan reported on staff’s recommendation to authorize the first amendment to Professional Services Agreement No. 2010-D-9, Strategic Development Plan for All Electronic Toll Collection, with Traffic Technologies Inc. (TTI), to provide technical and project management services for All Electronic Tolling (AET) conversion.

The staff report stated that, on April 10, 2010, the Board authorized the creation of the Strategic Development Plan for AET (AET Plan) relating to Initiative #4 in the Financial Plan for Achieving Long-Term Financial Stability, approved by the Board at its Special Meeting of October 30, 2009. As a part of this action, the Board authorized a Professional Services Agreement with TTI for development of the AET Plan. The scope of services includes the option to retain TTI to provide additional technical and project management services to implement conversion to AET.

The staff report further stated that, on January 28, 2011, the Board approved the AET project and authorized a $2.9 million capital budget increase for the project. Staff recommends engaging TTI to provide necessary project management and general technical services for full conversion to AET. In addition, TTI would support the development and training of the District operational staff required for AET. Progress on the AET implementation and the work of TTI will be monitored by the All Electronic Toll Advisory Committee, which will report to the Board regarding the status of the project until it is complete.

The staff report provided an anticipated timeline, with implementation expected during late 2012. 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, Mr. Wire reported that the cost of the Amendment No. 1, at $955,000.00, is lower than contemplated in the Project Budget. He stated that TTI would be working together with the District for approximately two years. He pointed out that TTI was selected because of their unique knowledge of toll systems, the Bay Area Toll Authority (BATA), and back office functions. He added that they also have complete understanding of business rules, and would bring expertise to the Project.

Discussion ensued, including the following comments and inquiries:

 

  • Director Sobel made the following comment and inquiry:
    • He commented that the first meeting of the All Electronic Tolling Advisory Committee took place this morning. He stated that the Committee will be evaluating AET from both a technical and a Human Resources standpoint.
    • He inquired as to whether TTI works with other groups throughout the United States. Mr. Wire responded affirmatively, and stated that they have worked with the New York Port Authority, which intends to go forward with AET, but has not progressed as far as the District. TTI has also worked with BATA.

Staff recommended and the Committee concurred by motion made and seconded by Directors BORO/ELSBERND 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 Amendment No. 1 to Professional Services Agreement No. 2010-D-9, Strategic Development Plan for All Electronic Toll Collection, with Traffic Technologies, Inc., in an amount not to exceed $955,500.00, for technical and project management services for all electronic toll collection conversion on the Golden Gate Bridge.

Action by the Board – Resolution
NON-CONSENT CALENDAR

AYES (10): Directors Boro, Cochran, Elsbernd, Grosboll, Pahre, Rabbitt, Sobel and Stroeh; First Vice President Eddie; President Reilly (Ex Officio)
NOES (0): None

 
2.

Authorize Execution of Amendment No. 2 to Professional Services Agreement No. 2009-D-7, FasTrak® Technical Support Services, with Traffic Technologies Inc., to Provide Toll Collection System Operations Support

In a memorandum to Committee, Electronic Revenue Collection Program Manager David Dick, Auditor-Controller Joseph Wire and General Manager Denis Mulligan reported on staff’s recommendation to authorize the second amendment to Professional Services Agreement No. 2009-D-7, FasTrak® Technical Support Services, with Traffic Technologies Inc. (TTI), to provide toll collection system operations support.

The staff report stated that the District entered into Professional Services Agreement No. 2009-D-7 with TTI on October 15, 2008, to provide technical support for the FasTrak® toll collection system operations. The Board authorized Amendment No. 1 on April 10, 2010, to provide support during development of the AET Strategic Development Plan. Amendment No. 2 provides for temporary, half-time operational support for FasTrak® toll collection system operations during AET implementation, enabling the District’s Electronic Revenue Collections (ERC) Manager to work half-time managing the AET implementation capital project. TTI will manage toll collection system vendors, support customer queries, monitor daily operations of the toll collection system, coordinate issue resolution, and support special projects as needed, for twenty-one months while the ERC Manager devotes half his time to AET implementation.

The staff report further stated that staff finds the proposed expenditure of time and the proposed not-to-exceed amount of $135,000.00, for work added through this amendment, to be fair and reasonable. 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 briefly summarized the staff report. He indicated the purpose of Amendment No. 2 is to provide back-up support service to run the operations of the present FasTrak® system. He stated that these duties are currently the responsibility of the ERC Manager, but will be assumed by TTI in order to allow the ERC Manager to work on AET implementation. He indicated that approximately $30,000.00 would be expended during FY 11/12.

Discussion ensued, including the following inquiry:

  • Director Stroeh inquired as to whether the funds were included in the original proposal. Mr. Wire responded affirmatively.

Staff recommended and the Committee concurred by motion made and seconded by Directors SOBEL/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 authorize Amendment No. 2 to Professional Services Agreement No. 2009-D-7, FasTrak® Technical Support Services, with Traffic Technologies, Inc., in an amount not to exceed $135,000.00, for toll collection system operations support services for all electronic toll collection conversion on the Golden Gate Bridge.

Action by the Board – Resolution
NON-CONSENT CALENDAR

AYES (10): Directors Boro, Cochran, Elsbernd, Grosboll, Pahre, Rabbitt, Sobel and Stroeh; First Vice President Eddie; President Reilly (Ex Officio)
NOES (0): None

   
3.

Status Report Relative to Establishing a Toll Classification for Providers of Regularly Scheduled Bus Transportation Services from Marin and Sonoma Counties to San Francisco International and Oakland International Airports

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Denis Mulligan provided a status report relative to establishment of a new toll classification category for commute bus companies such as Marin Airporter (Airporter) and Sonoma County Airport Express (Airport Express).

The staff report stated that a new toll classification could be established that would be confined to privately operated, California Public Utilities Commission (CPUC) 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.

The report presented staff calculations of the financial impact of continuing to treat buses that meet the above criteria carpools during designated carpool hours. During all other hours of the day they would, in lieu of paying the adopted per-axle toll, pay a reduced per-axle toll rate equivalent to 50% of the otherwise applicable two-axle toll. The staff report estimated that, if the toll discount were implemented, it would result in an estimated toll revenue reduction of $83,000.00 in FY 11/12 and $165,000.00 in FY 12/13 and beyond. This reduction represents 14% of the $1.2 million in anticipated additional revenue that would otherwise be generated by the multi-axle vehicle toll increase.

The staff report also addressed the possibility of creating a discount FasTrak® account, but found this an unfeasible option. Instead, staff indicated that a quarterly reimbursement account, whereby the District would refund the difference between the new toll classification and the otherwise applicable multi-axle toll, would be an easy and workable method for the District to provide reduced tolls for these two providers.

The staff report stated that staff considered legal issues that could be associated with providing toll discounts to privately owned providers of public transportation. The staff report stated that such differentiation in applying toll rates would be permissible because a rational basis exists in that providing toll discounts to such vehicles: (1) encourages a reduction in congestion and the use of regularly scheduled transportation services open to the public that are akin to public transit service; and (2) the CPUC also distinguishes vehicles used for public transportation from others. In addition, the report indicated that the District’s attorney advised that a reduced toll for these providers is not precluded by legal limitations, but may be made on the basis of financial and operational considerations. 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 stated that the Airporter and the Airport Express together cross the Golden Gate Bridge (Bridge) approximately 21,000 times annually. He noted that, should the Board wish to put a new toll classification in place for this purpose, a public review process would be required.

Discussion ensued, including the following comments and inquiries:

  • Director Boro made the following comments and inquiries:
    • He inquired as to whether the Airporter and Airport Express were motivated to request reduced tolls because other Bay Area bridges provide reduced-cost crossings. In response, Mr. Wire stated that the Bay Bridge allows free passage for regularly scheduled CPUC-certificated coaches. He added that neither the Airporter nor the Airport Express have requested free passage, but instead requested a reduced toll rate.
    • He commented that staff should verify how other Bay Area bridges handle Airporter and Airport Express tolls.
    • He inquired as to the number of vehicle trips that are saved annually due to the availability of transportation by these two companies. Mr. Wire responded that calculations can be done and presented to the Board.
    • He inquired as to the financial impact to the District should a new toll classification be established whereby the Airporter and the Airport Express would pay a per-axle rate of 50% of the otherwise applicable two-axle rate, or $7.50, at all times of day, including carpool hours. In response, Mr. Wire stated that staff would calculate the effects of Director Boro’s suggestion and report back to the Board.
  • Chair Stroeh stated that the information requested by Director Boro should be available to the Board prior to action, and that the item should be continued to a future Board meeting.
  • Director Pahre inquired as to whether, given the coming implementation of AET, a toll collection method that avoids the exchange of money could be applied to a new toll classification. In response, Mr. Wire stated that options other than the reimbursement account reviewed in the staff report could be adopted, but that the option in the staff report is easily workable.
  • Director Grosboll made the following comments and inquiries:
    • He inquired as to whether the reduced toll rate discussed in the staff report would be a benefit to two private companies, and whether other Bay Area bridges provided reduced tolls. In response, Mr. Wire stated that a reduced toll would benefit both companies, and that the State Bridges provide free crossings.
    • He inquired as to the fare the two companies charge their passengers. In response, Mr. Wire stated that fares would be investigated should the Board indicate it wishes to move forward on establishing a new toll classification for these providers.
  • President Reilly commented that she would be reluctant to support a reduced toll rate for private carriers because the projected five-year deficit stands at $89 million and the District plans to reduce the deficit, in part, by reducing District staffing levels.
  • Director Cochran made the following comments:
    • He commented that, although he is in agreement with President Reilly, he is also concerned because the Bay Area Toll Authority (BATA) provides free crossings but has financial challenges to meet.
    • He commented that private enterprise is driven by its bottom line. He noted that he believes the fare to the San Francisco International Airport from Novato is approximately $20.00, and from Santa Rosa is approximately $62.00. He added that, because the cost of gasoline is high, customers of the Airporter and Airport Express save money. He stated that, if these two companies are earning a profit, it may be prudent to take no action.

This matter was continued to the April 7, 2011, meeting of the Finance-Auditing Committee.

 


4.

Public Comment

There was no public comment.

   
5.

Adjournment

All business having been concluded, the meeting was adjourned at 11:20 a.m.

   

 

 

Respectfully submitted,

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