Minutes - January 9, 2003

STAFF PRESENT: Michael Scanlon, David Miller, Joan Cassman, Stan Arend, Cheryl Cavitt, George Cameron, Roger Contreras, Jim Gallagher, Howard Goode, Chuck Harvey, Joe Hurley, Aurora Jose, Martha Martinez, Ian McAvoy

Chair Guingona called the meeting to order at 5:05 p.m. and led the Pledge of Allegiance to the flag.

SWEARING IN OF REAPPOINTED BOARD MEMBERS

Directors Mark Church, Joe Galligan, Michael Guingona, and Ira Ruskin were sworn into office by Board Secretary Aurora Jose.

ELECTION OF OFFICERS FOR 2003

Chair Guingona, reflecting on his experience as chair of this Board for the last two years, stated that they were eventful years for the Board. He expressed pleasure working with everyone and stated staff has been very professional.

Director Gordon thanked Chair Guingona for his service and nominated Director Church as new Chair. The motion having been duly seconded, the nomination was closed. By unanimous vote, Director Church was elected chair for 2003.

Chair Church thanked his colleagues for the vote of confidence. He noted that the Board is facing difficult challenges this year and beyond, but he looks forward to working closely with each and everyone on the Board and staff to ensure another successful year.

Director Gordon nominated Director Lee as Vice Chair. The nomination was seconded by Director Ruskin and then closed. The Board, by unanimous vote, elected Director Lee as Vice Chair for 2003.

Chair Church expressed appreciation of the leadership and accomplishments of Director Guingona as Chair for two years. The Board, by roll call, unanimously approved     Resolution No. 2003-1.

CONSENT CALENDAR

The Board unanimously approved the following items under the Consent Calendar:

1. Approval of Minutes of December 5, 2002
2. Adoption of Financial Statements, November 2002

PUBLIC COMMENT: None at this time.

CITIZENS ADVISORY COMMITTEE (CAC) REPORT

Ken Colmen thanked the Board and staff for their support for his two years of service as chair of the CAC and pledged his support to the TA. He informed that Ms. Doris Maez is the new Chair of the Committee and expressed confidence in her leadership. They will elect a new Vice Chair at their next meeting.

Ms. Maez congratulated the newly elected Chair and Vice Chair of the TA Board. She advised that the TA-CAC has very interested and active members. They reflect the community’s interests and want to make sure they are heard. She said the CAC’s goal especially with respect to the Measure A reauthorization is to educate the public as to what the measure has accomplished. In connection with today’s agenda, she reported that the CAC is endorsing action items (1) Receipt of California Audited Report; and the (2) Appointment of the Audit Committee. She pointed out that the CAC did not endorse nor oppose the item on the award of the contract for education and outreach services by Bay Relations because they did not get any information about the scope of work. She expressed disappointment that the CAC did not have any input in this process. She requested that in the future, staff inform the CAC of what is going on. Ms. Maez further reported that although it is difficult to come to meetings twice in the same week, the CAC members are trying to find a way to attend the TA Board meetings. She stated the CAC would appreciate it if the Board members could also attend their meetings.

Chair Church stated the Board values the input of the CAC and looks forward to working with them in the upcoming year.

CHAIRPERSON’S REPORT

Director Ruskin reported the Selection Committee composed of Director Galligan, Director of TA Program Joe Hurley and himself, met on December 16. They interviewed six candidates for the two vacant positions. The Committee is unanimous in their recommendation to appoint Joe Armstrong and Dean Isaacs.

Director Panza stated the Board received copies of applications at the start of this meeting and did not have sufficient time to review them.

Director Ruskin responded a Selection Committee was formed to do the screening of applicants. He felt that discussing the qualifications of the candidates in public might discourage others from applying in the future. He reviewed briefly the selection process that was conducted. The members of the Selection Committee, after evaluating and discussing the qualifications of the candidates, arrived at the foregoing recommendation.

Director Galligan understood the frustration of Director Panza. He stated it would have been more appropriate if copies of applications were sent to the Board members prior to this meeting.

Director Ruskin remarked as another method of handling the CAC appointment, the entire Board could interview all of the applicants. This way, everybody will be privy to the interview and the vote for the applicants without comment, will be handled at the Board meeting.

In view of the foregoing, Director Church advised that in the future, if time permits, applications be sent to each of the Board members with a short paragraph stating the reasons for their recommendation.

The Board, by roll call, (Director Panza dissenting) approved the appointment of Messrs. Armstrong and Isaacs to the Citizens Advisory Committee.

SAMTRANS LIAISON REPORT

Director Guingona referred to the report in the packet.

Director Panza referring to a line item on the adoption of State Legislative Program stated that C/CAG has established a Legislative Committee. Since the C/CAG this year is in closer contact with various agencies, he suggested that SamTrans Legislative Committee be in closer liaison with C/CAG.

Executive Director Michael Scanlon informed that coordination among the agencies already exists. SamTrans, at the staff level, works with the City Managers Association and C/CAG is in coordination with the City Managers Association. Mr. Scanlon provides input to the City Managers on what SamTrans does. The City Managers Association formulates recommendations for C/CAG. Mr. Rich Napier of C/CAG and Mr. Scanlon get together at least once a month with all of the City Managers. Also, yesterday, Director Guingona was elected Chair of the SamTrans Board. The District’s Legislative Program at the State level is to have a very strong defense to protect its projects. Copies of the Legislative Program can be distributed if necessary.

Director Panza stated he is aware of the very close communications at the staff level. He felt that this relationship is also appropriate at the elected officials' level. He would be communicating with SamTrans Director Art Lloyd.

JOINT POWERS BOARD (JPB) REPORT:

Mr. Scanlon gave the following reports on the December 9 JPB meeting:

1. Mary Janney was sworn in to office to replace Board member Steve Schmidt who has resigned from public life and from the JPB Board. He did not seek re-election in Menlo Park.
2. Director Sophie Maxwell’s term in the City and County of San Francisco has expired and her successor has to be appointed. Right now, there is a vacancy on the JPB.
3. The Board passed the following resolutions:
• Operating budget amendment to conduct emergency preparedness drill. This is a sum of money that SamTrans and JPB applied for after the September 11, 2001 event.
• Cooperative agreement with VTA and amendment to increase the Capital Budget to fund the Grade Separation Study Reports for San Mateo County and the Lawrence Station transit parking facilities improvements.
• Filing of applications for FTA grants to fund various Caltrain improvement projects.
• Bicycle/Skateboard parking and use regulations for various Caltrain parking lots and other properties.
• Pilot University Pass Program with Stanford University where Stanford paid the JPB a sum of money in excess of $600,000. The faculty members of the university and other employees will be able to ride Caltrain for one year and after that SamTrans and Stanford will have an opportunity to re-evaluate it. There is that potential to extend it to the students and the hospital employees.
• Relief of one contractor who had made a significant mistake in a bid, and award of the contract to the second low bidder for major construction work south of Redwood City. It is a major construction contract amounting to $41 million for the continuation of the rebuilding of Caltrain tracks for the first phase of the Baby Bullet and provision for computerized operation and control.
4. Some 6,000 toys were collected at the "Toys for Tots" event. This Christmas celebration was done in cooperation with the United States Marine Corps, the Salvation Army and the Golden Gate Railroad Museum. A videotape of Channel 2’s newscast was presented featuring the event.
5. Ridership in October was down from 32,000 in October 2001 to just over 28,000 this year. It is just tracking directly with the economy and the jobs.
6. Three public meetings were scheduled to discuss changes that are being considered for implementation once BART opens early in 2003.
7. Engineering Department gave an update on the progress of the north and south CTX construction project.

Director Lee inquired into the mistake in the bid that was mentioned in the report. Legal Counsel David Miller responded the issue is the kind of diligence required in the construction contract where the contractor was claiming relief. This means that someone cannot just change his mind. There was a fax of bid items that never reached the recipient. Staff was able to trace this, thereby justifying the claim of mistake. After a series of questioning that went on for two weeks and a careful analysis of the issue, counsel and staff determined that legally, the bidder was entitled to the relief that was requested. The second bid was also below the engineer’s estimate.

Director Lee also asked how ridership was measured on the Stanford University Pass Program. Mr. Scanlon answered this program came about when the Eco Pass Program was discontinued. Under this program, employers paid a certain amount for Caltrain fares of employees. Stanford called in and was able to provide very good data on how many people were riding Caltrain and staff concluded that a demonstration project could be implemented. Employees get a sticker that they attach on their ID and this serves as the control. Caltrain also conducts an actual survey.

For the January 9 JPB meeting, Mr. Scanlon gave the following reports:

1. Director John McLemore of Santa Clara was elected Chair and Director Maria Ayerdi of San Francisco was elected Vice Chair.
2. A resolution of appreciation was presented to Director Mike Nevin, outgoing Chair, for his outstanding achievements during his term.
3. A resolution of appreciation was presented to Steve Schmidt.
4. In appreciation of Sid Mobell’s idea and efforts in pushing for the installation of benches in the Caltrain Station in San Francisco, he was presented a photo of himself sitting on one of the benches. Mr. Mobell is a celebrity jeweler in San Francisco who produced the $2 million monopoly game.
5. Ms. Sue Lempert reported that Senator Tom Torlakson is sponsoring a legislation to lower the threshold of 2/3 votes required to get legislation for sales tax revenue.
6. Just before this meeting, Directors Lee, Gordon and Mr. Scanlon talked about certain proposals to get one cent sales tax passed at the State level.
7. The JPB CAC reported that they have reviewed the new proposed Caltrain schedule and the 10-Year Strategic Plan and expressed interest in getting involved in the ADA access and Baby Bullet express station issues.
8. Rita Haskin, Chief Communications Officer, gave an overview of the Caltrain marketing Testimonial Ad Campaign to promote ridership. Eleven Caltrain riders are featured in the ads, speaking of why they ride Caltrain. The ads will appear on various print articles and newspapers.
9. The Board approved entering into two license agreements with the Santa Clara Valley Transportation Authority to allow for the construction, maintenance, operation and repair of a bus transit center over the JPB-owned property at the Santa Clara Caltrain Station and allow the JPB to use some adjacent VTA property to make up for the displaced parking.

REPORT OF THE EXECUTIVE DIRECTOR

Mr. Scanlon stated Howard Goode, Chief Development Officer, will comment on things that may happen in the future.

Mr. Goode reported that because of the $20 billion budget deficit, the Governor plans to take away $1.8 billion from transportation projects. The State Transportation Improvement Program (STIP) which is a funding source for highway projects in San Mateo County is in financial crises. As a result, new STIP projects are unlikely to be programmed in the next few years. Also, the Governor is proposing that a series of transportation projects which were to be funded by the general fund would now be funded from the STIP. This is the time that STIP has limited funding. The good news is that relative to the Traffic Congestion Relief Program, which benefits the Peninsula and the Baby Bullet project, all of the construction contracts are now awarded, including the procurement contracts for the rolling stock. In fact, some of the rolling stocks are already in service. He felt optimistic that because the contracts are already in place, they will be preserved. Potentially, the impact of the budget cut is on the highway side, specifically the auxiliary lane and interchange projects on the 101 corridor and Route 92 improvements. The 101 auxiliary project between Marsh and Ralston is scheduled to be awarded tomorrow. Mr. Goode noted that there is an opportunity for the TA to keep these projects on schedule on a cash-flow basis, a mechanism at the State level that allows local agencies to enter into an agreement with the State for reimbursement. TA funds would be used to keep the projects on schedule with reimbursement from the STIP at a future time. If this method of funding becomes necessary, staff will take this matter to the Board for direction.

Director Panza, referring to Senator Torlakson’s SCA 2 bill, felt that given the situation that is developing in Sacramento, it is absolutely critical that staff gets all the help they can get to pass the reauthorization measure. It is to the best interest of the TA to support that. He asked that this matter be brought to the Board for its support.

Mr. Scanlon commented the support should not just focus on the Torlakson bill but any other legislation that would lower the 2/3 threshold. Ian McAvoy, Deputy Chief of Development reported that there seems to be some issues between the Democratic leadership about which bill gets supported.

Director Panza requested for an update on this matter next meeting.

Relative to the one-cent sales tax increase, Director Lee asked if it requires the vote of the public or if the State legislature can do it. Attorney Miller responded the legislature can do it although they have the option to refer it to the public.

Director Lee reminded that once that one-cent sales tax is added, it will hurt the reauthorization and staff needs to be thinking about that in some depth.

FINANCE

1. Receipt of California Audited Report (CAFR) FY 2002 and Management Letter for FY 2002

Stan Arend, Director of Accounting, reported the Board received the Comprehensive Annual Financial Report that includes the report of the external auditor on FY 2002 Financial Statements. In said letter, the County Auditor’s opinion was unqualified, which is the best kind one can receive. No material weaknesses were found in the internal control. The Audit Committee that was created by this Board met for the first time and reviewed the TA’s financial reports. There was an excellent discussion between the auditors, the committee and staff pertaining to accounting principles. Staff made changes in the report based on the Committee’s involvement, resulting in a better presentation. This report was submitted to the Government Finance Officer’s Association for an award for Excellence in Financial Reporting. Last year’s report won that award for the first time. Staff expects to win the award again this time. Mr. Arend recognized Neng Pacumio, Senior Accountant, the key staff person who manages the TA accounting. She is the principal contributor to this report.

2. Establishing Duties and Responsibilities of the Audit Committee

   Mr. Arend reminded that two months ago the Board created the Audit Committee and asked staff to come back with Committee definition of duties and responsibilities. He referred to the written report in the packet and mentioned that the focus is on the external audit function. The external audit function itself focuses on financial statements and internal control.  Mr. Arend looked forward to working with the Committee on future audits and welcomed their input on the TA’s financial and internal control system.

The Board, by roll call, unanimously adopted Resolution No. 2003-2.

Director Galligan commented that the resolution captured the substance of his comments during the last meeting on what the committee should be looking at to give both the Board and the public comfort that everything is done to present reports fairly and with integrity. Staff was very responsive and went out of their way to accomplish the Committee’s suggestions. He pointed out that this takes staff off the hook on some things that they want to do that need the action of the board. It promotes better understanding between the Board and staff.

Director Lee agreed that the resolution was very well worded and very thorough and thanked Director Galligan for recommending the establishment of an Audit Committee.

Mr. Arend thanked Attorney Joan Cassman for her collaboration on the resolution.

PROGRAM

Cheryll Cavitt, Director of Contracts and Procurement, reported on the competitive procurement process that was adopted on this item. She stated staff is recommending approval of the award of contract to Bay Relations of Daly City and authorization for the Executive Director to execute the contract and any subsequent options.

Mr. Scanlon, referring to the report of CAC Chair Doris Maez that they did not take any action because they were unaware of the scope of work in this contract, recounted the instances where he publicly reported on its progress. He advised that staff needs to get outside help on the public information campaign regarding the benefits people have received from Measure A since 1988 and the outreach necessary to get their input on what are their needs. This is a work order-driven contract and the scope of work will be determined along the way. Samceda is negotiating a contract next week with another organization that is going to raise private money and do the advocacy. This firm is going to develop massive outreach materials for the community. Mr. Scanlon stated staff is banking on the support of the CAC in developing materials and doing the massive outreach program in educating the public and soliciting their input. Mr. Scanlon apologized if he was misunderstood or the CAC missed the communications he had previously made.

Mr. Colmen stated the CAC is excited about the campaign. They just did not have any information on the scope of work.

The Board, by roll call, unanimously approved the award of contract as recommended (Resolution No. 2003-3).

REQUESTS FROM THE AUTHORITY: None at this time.

REPORT OF LEGAL COUNSEL: None at this time.

WRITTEN COMMUNICATIONS TO THE AUTHORITY: None at this time.

DATE AND PLACE OF NEXT MEETING: February 6, 2003 at 5 p.m. in the Auditorium, Second Floor, 1250 San Carlos Avenue, San Carlos.,

ADJOURNED: 6:10 P.M.