December 16, 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 (Committee) of the Golden Gate Bridge, Highway and Transportation District (District) was held in the Board Room, Administration Building, Toll Plaza, San Francisco, CA, on Friday, December 16, 2011, at 9:35 a.m., Chair Stroeh presiding.

Committee Members Present (8): Chair Stroeh; Directors Boro, Cochran, Grosboll, Moylan and Sobel; Vice Chair Pahre; President Reilly (Ex Officio)
Committee Members Absent (1): Director Elsbernd
Other Directors Present (5): Directors Arnold, Campos, Eddie, Renée and Snyder

Committee of the Whole Members Present (13): Directors Arnold, Boro, Campos, Cochran, Moylan, Pahre, Renée, Snyder, Sobel and Stroeh; Second Vice President Grosboll; First Vice President Eddie; President Reilly (Ex Officio)
Committee of the Whole Members Absent (5): Directors Chu, Elsbernd, Mar, Rabbitt and Theriault

[Note: On this date, there was one vacancy on the Board of Directors.]

Staff Present: General Manager Denis Mulligan; Auditor-Controller Joseph Wire; District Engineer Ewa Bauer; Secretary of the District Janet Tarantino; Attorney David Miller; Attorney Madeline Chun; Attorney Jerrold Schaefer; Deputy General Manager/Bridge Division Kary Witt; Deputy General Manager/Bus Transit Division Teri Mantony; Deputy General Manager/Administration and Development Kellee Hopper; Director of Risk Management and Safety William Stafford; Senior Board Analyst Elizabeth Eells

Visitors Present: Rex Clack, Sterling & Clack; David Russo, Sterling & Clack

1. Ratification of Previous 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 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, of PFM, reported that little change has taken place regarding the District’s investments since her last report on November 18, 2011.

She reported that consumer confidence improved during November 2011. Retail sales grew by 0.5% during October 2011, suggesting that consumers are more willing to spend. Survey participants indicated that they were more optimistic about job prospects and pay raises. She also reported that the District’s portfolio remains well diversified between United States Treasuries, Federal agencies and high-quality corporate issuers, with a yield of approximately 2%.

Discussion ensued, including the following inquiry:

     
 
  • Director Grosboll inquired as to PFM’s confidence level in the municipal securities issued by the City and County of San Francisco, which were purchased by PFM on the District’s behalf. In response, Ms. Jones stated that PFM recently purchased Governor’s Energy Office (GEO) bonds issued by the City and County of San Francisco, with a rate over 1% for a one-year bond and 1.34% for a five-year bond. She indicated that the GEO bond rates are better than the current U.S. Treasury rate. She explained that such bonds commonly trade at the same rate as bonds issued by the U.S. Treasury. She concluded by stating that, if the GEO bond rates fall, PFM will sell those bonds on behalf of the District at a profit.
     
  Staff recommended and the Committee concurred by motion made and seconded by Directors COCHRAN/EDDIE to forward the following recommendation to the Board of Directors for its consideration:
     
 
RECOMMENDATION

The Finance-Auditing Committee/Committee of the Whole 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 November 1, 2011, through November 30, 2011;

  b. Ratify investments made by the Auditor-Controller during the period November 8, 2011, through December 5, 2011, as follows:
   
Security
Purchase Date
Maturity Date
Original Cost
Percent Yield
Bank of Tokyo Mitsubishi
11/21/11
02/21/12
7,332,496.89
0.40
Bank of New York Mellon
11/23/11
11/24/14
7,132,503.00
1.74
San Francisco Go Muni Note
11/30/11
06/15/15
6,035,551.55
1.03
San Francisco Go Muni Note
11/30/11
06/15/16
3,580,852.05
1.34
John Deere Capital Corp Note
12/02/11
12/02/14
2,237,110.40
1.29
  c. Authorize the Auditor-Controller to re-invest, within the established policy of the Board, investments maturing between December 6, 2011, and January 16, 2012, 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 November 2011, as prepared by PFM.
     
   
Action by the Board at its meeting of January 13, 2012 – Resolution
CONSENT CALENDAR

 

AYES (13): Directors Arnold, Boro, Campos, Cochran, Moylan, Pahre, Renée, Snyder, Sobel and Stroeh; Second Vice President Grosboll; First Vice President Eddie; President Reilly (Ex Officio)
NOES (0): None

     
2. Authorize Budget Adjustment(s) and/or Transfer(s)
  There were no "Budget Adjustment(s) and/or Transfer(s)" to discuss.
     
3. Authorize Actions Related to Grant Programs
  There were no “Actions Related to Grant Programs” to discuss.
   
4. Monthly Review of Golden Gate Bridge Traffic/Tolls and Bus and Ferry Transit Patronage/Fares (for Five Months Ending November 2011)

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Denis Mulligan provided a schedule comparing categories of Golden Gate Bridge (Bridge) traffic, as well as a monthly review of Bridge traffic, tolls, transit patronage and
fares, for five months ending November 2011. Copies of the reports are available in the Office of the District Secretary and on the District’s web site.

       
5. Monthly Review of Financial Statements (for Five Months Ending November 2011)
  a. Statement of Revenue and Expenses

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Denis Mulligan provided financial statements 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 financial statements 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

       
6. Closed Session

Attorney David Miller, at the request of Chair Stroeh, stated that the Committee would convene in Closed Session to discuss the following matters, listed on the Agenda as Items Nos. 6.a.1, 6.a.2. and 6.b.:

       
  “a. Conference with Legal Counsel – Existing Litigation
Pursuant to Government Code Section 54956.9(a)
Report of John Glenn Adjusters & Administrators, Inc.
    1. Dolores Skore vs. Golden Gate Bridge, Highway and Transportation District
    2. Aquilina Balingit vs. Golden Gate Bridge, Highway and Transportation District”
       
  “b. Conference with Legal Counsel – Existing Litigation
Pursuant to Government Code Section 54956.9(a)
Report Sterling & Clack
Susan Thomson vs. Golden Gate Bridge, Highway and Transportation District”
       
  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 the matters listed under Closed Session, outlined above. He reported that, regarding Agenda Items Nos. 6.a.1. and 6.a.2., above, the Committee heard a report from John Glenn Adjusters & Administrators, Inc. Both items will be heard by the Board at its meeting of December 16, 2011. Attorney Miller further reported that, regarding Item No. 6.b., instructions have been given to the attorneys, General Counsel and General Manager regarding the disposition of this matter, and a report will be provided to the Board of Directors.
       
7.

Public Comment

There was no public comment.

     
8.

Adjournment

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

     

 

Respectfully submitted,

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