BOARD MEMBERS ABSENT : Mark Church (Chair)

STAFF PRESENT : Michael Scanlon, Joan Cassman, David Miller, Joe Hurley, Howard Goode, George Cameron, Roger Contreras, Rita Haskin, Chuck Harvey, Jim Shelton, Martha Martinez, Jennifer Buhr

Vice-Chair Lee called the meeting to order at 4:35 p.m. and led the Pledge of Allegiance to the flag.

CONSENT CALENDAR

Item c, Authorization for Executive Director to Execute a Five-Year Lease with Peter Pan Motors, Inc. for Property Located at 2777 South El Camino Real, was severed from the Consent Calendar.

The Board unanimously approved the following items, by roll call, under the Consent Calendar:

1. Approval of Minutes of March 18, 2004
2. Adoption of Financial Statements, March 2004
3. Adoption of Annual Investment Policies

With regard to item c, Brian Fitzpatrick, Manager of Real Estate Department, clarified that the rate on this lease is going to stay flat for the first three years and will adjust thereafter for the fourth and fifth years.

Michael Scanlon, Executive Director, also corrected that the costs would be amortized on a straight line basis not a string line basis, as presented in the staff report.

Director Panza questioned the issue of paying for 50 percent of Peter Pan BMW’s non-amortized costs in constructing improvements.

Mr. Fitzpatrick responded that typically when someone enters into a five-year lease with any entity, they assume that they will be able to stay there for five years. Because the TA is a transportation agency, if there was a situation where the lease needs to be terminated for a higher and better purpose from the transportation point of view, there would be an out to the lease. Quite often, when the property has been vacant, the tenant will make improvements to the property that will allow them to sell its cars. Therefore, should the lease be terminated, the tenant may not have time to amortize the costs over the five years, which they would have been able to with any other business. Staff was able to negotiate with Peter Pan BMW and decided to effectively split the risk because if the lease was to be terminated early, rather than the TA having to pay for the full non-amortized costs, the TA would pay 50 percent of it.

Director Panza questioned if that meant that the TA would split the costs that haven’t been amortized.

Mr. Fitzpatrick stated that was correct.

The motion to approve the Authorization for Executive Director to Execute a Five-Year Lease with Peter Pan Motors, Inc. for Property Located at 2777 South El Camino Real was approved unanimously, by roll, and Resolution 2004-02 was adopted.

PUBLIC COMMENT

None.

CITIZENS ADVISORY COMMITTEE (CAC) REPORT

CAC Chair Larry Shaine noted the presence of fellow CAC members in the audience. He reported that he, along with others, received a free $15 BART ticket in the mail, which he believes was to help encourage ridership. He also reported that at the last CAC meeting:

Joe Hurly made a presentation on the 2004-2005 capital projects.

There was discussion on the upcoming city council meeting related to the adoption of the Draft Expenditure Plan. There is hope that CAC members will be able to attend the meetings.

There was clarification from Legal Counsel regarding what appropriate role the CAC members can play with city councils.

Discussed the current Measure A reauthorization process and identified current opposition. They are appointing a subcommittee to put together a process of writing letters to the editor to try to ensure corrections on factual errors, particularly in the printed media.

The CAC acknowledged Jane Lockwood, who was affected by the reorganization, and thanked her for her high level of support.

Lastly, the CAC invited all board members and staff to the next CAC meeting on June 1, 2004 at 4:30p.m. Bill Welch will be giving an update on plans in progress for paratransit in San Mateo County.

Director Ruskin commented that he feels that it is important to have factual errors about Measure A answered and asked for staff to work with the CAC to do a continuous search of all media in the Bay Area in order to locate and address all issues.

Mr. Scanlon stated that staff monitors every newspaper article, including the electronic media, and staff will make corrections where appropriate. Lately, there have been some opinion editorials, specifically by two individuals, who represent misrepresentation by denying the facts that were presented to them. Mr. Scanlon commented that the TA has to be very measured in any responses so as to not cause adverse publicity and attention with Measure A.

Mr. Shaine questioned if it would be preferred for the CAC to not respond when they discover a factual misrepresentation.

Mr. Scanlon responded that it needs to be discussed. He reiterated that he doesn’t want it to appear that there is a huge controversy pertaining to Measure A.

Mr. Shaine affirmed that they will proceed with caution and will work with Joe Hurley and Rita Haskin.

FINANCE

a) Call for a Public Hearing for the Proposed Capital and Operating Budgets for FY2005

Jim Shelton, Budget Manager, reported that staff requests the Authority establish a public hearing on June 3, 2004, to consider adoption of the Proposed Fiscal Year 2005 Capital and Operating Budgets.

The motion was approved unanimously.

b) Distribution of FY2005 Operating and Capital Budgets

Jim Shelton, Budget Manager, and Joe Hurley, Director Transportation Authority Program, made a PowerPoint presentation on the proposed FY2005 Operating and Capital Budgets. Highlights of the presentation included TA revenues for FY2005, Program Expenditures, Transportation Systems Management and the Paratransit Trust Fund. In general, the FY2005 total revenues and transfers is set at $71.2 million, the program expenditures are at $194.4 million, the transportation systems management has an estimated fund balance at June 30, 2005 of $4.989 million and the paratransit trust fund has an estimated ending fund balance at June 30, 2005 of $30.01 million. Mr. Shelton advised that staff would be contacting each board member to respond to any questions or set up meetings at their convenience.

This item was submitted for informational purposes only and no policy action was requested.

Howard Goode, Deputy Executive Director, reported that in the draft Strategic Plan, there is a series of highway projects that the TA is not going to be able to complete based on the estimated sales tax funds and the available State funds. Therefore, the presented budget reflects reductions in certain highway projects to reflect that additional project development work would not be done beyond that work which is currently underway. Mr. Goode specifically addressed the Broadway Interchange project in Burlingame. The mayor of Burlingame submitted a letter, which inquires as to the status of completion of the current project study report phase. Additionally, the letter indicates that the funding is in place for the next step, which would be for the environmental work on this project. Mr. Goode stated that since the TA doesn’t have the money in the current measure to construct this project, the staff recommendation is to not do any work beyond the work that is currently taking place because if Measure A is not reauthorized, there would not be funding to implement those projects and the further development money wouldn’t be of value for that project. Mr. Goode commented that another option would be to leave the development money in place for these projects for the present and to continue the development on them until the outcome of the reauthorization of Measure A. If Measure A is reauthorized, then staff could move full speed ahead and if it is not the TA would be faced with the decision of removing funding from any further project development.

Director Lee questioned is staff would be responding to the letter submitted by Burlingame.

Mr. Goode said that staff will be responding.

Director Galligan commented that the TA has $142 million of unallocated funds and he questioned what kind of message will be sent to the public if the TA backs off and waits for the reauthorization or if the TA moves forward positively thinking that the measure will be reauthorized. He stated that the Broadway interchange is the oldest in San Mateo County that has not been repaired.

Director Ruskin stated that he shares Director Galligan’s concerns and asked staff what the advantages and disadvantages would be with the options and questioned how much money would be involved with continuing to move forward. Alternatively, he questioned if the TA could keep the projects on the books without spending any money until November.

Mr. Goode responded that the projects stay on the books because they are all under the current measure. Mr. Goode commented that every additional dollar that is spent for studying a project which doesn’t have construction funding, that is a dollar less that will be available towards other projects that can be done.

In regards to what kind of money would be needed to continue those projects that require the reauthorization of Measure A for construction, Mr. Hurley roughly estimated $1.5 million. He clarified that the contract needs to state that they would be entering into a $2 million contract to prepare an environmental document for the Broadway interchange. However, the project may be pulled if Measure A is not reauthorized in November.

Director Panza commented that not committing to another phase of the project makes sense. However, Director Panza stated that doesn’t mean that the projects should be put on hold, it just means not undertaking another project or study. Director Panza questioned if the budget to be adopted in June assumes that the TA will not go onto the next phase of these projects, if Measure A is reauthorized would the budget be adjusted to appropriate money to the projects on temporary hold.

Mr. Scanlon responded that the budget would be adjusted. Further, he stated that the proposed budget tracks exactly with the draft Strategic Plan. Mr. Scanlon commented that there is an option of holding off on the formal adoption of the Strategic Plan and going into the budget year leaving the money funded without the expenditure commitments until after it is known whether Measure A is reauthorized. Mr. Scanlon suggested reshaping the budget to keep the programs funded as if they are going forward and if the reauthorization doesn’t pass in November, the adjustments can be made accordingly.

Director Panza noted that by doing that, there will be more emphasis on the need for the passage.

Director Galligan commented that it sounds like the TA would be fronting money for funds that will not be received from the State of California. He questioned if that was something that will be tracked in the financials on a monthly basis, including when the funds are anticipated to come to the TA as a receivable.

Mr. Contreras responded that it will be tracked in the quarterly report.

Mr. Scanlon further commented that the TA will be entering into a 30/90 Agreement with the State, which is a written agreement that requires that interest be paid, and will enable the TA to move forward with a project (Millbrae auxiliary lanes) that is urgently needed.

Mr. Hurley questioned if what is being recommended for the budget is to move forward with a specific project, which may require additional allocations, meaning the budget would need to be increased for that project.

Director Galligan stated that if there isn’t sufficient funding to do all the projects, there will still be $50 to $100 million dollars and the projects that can be done need to be identified. The reality is some of the projects will be done.

Mr. Scanlon commented that because the TA still does have money that is spoken for, although it is not technically allocated. However, it should not affect the TA between now and November.

Director Panza questioned when the draft budget would be available.

Mr. Scanlon commented that it will be available within a couple of days.

CHAIRPERSON’S REPORT

None.

SAMTRANS LIAISON REPORTS

Director Guingona reported on the April 14, 2004 meeting. A written report was included within the packet to the board.

JOINT POWERS BOARD REPORT

Michael Scanlon reported on the April 1, April 22 and May 6, 2004 board meetings.

April 1, 2004

Swearing-in of Jose? Cisneros.

The draft Environmental Impact Report (EIR) for Caltrain electrification was distributed. Four public meetings were scheduled.

The South Bay Historical Railroad Society presented its 2004 model train show and open house at the historic Santa Clara Depot on April 17 and 18.

MTC unveiled a new very successful program, 511.

Bruce Balshone reported on the last CAC meeting:

Report on Key Caltrain Performance Statistics.

Recognized George Erickson, retiring General Manager of Amtrak, and presented a Proclamation of Appreciation.

The coveted Hard Hat award was presented to Jim Hartnett who took his train tour on March 29, which was the day of the gas leak in Mountain View.

Chuck Harvey, Chief Operating Officer, introduced Jay Commer who is currently the acting General Manager working for Amtrak.

Mr. Harvey made a presentation on On-time Performance, which highlighted that some of the delays were due to the CTX construction, single tracking, signal system problems and trespasser fatalities.

The Lawrence Station opening was on March 5.

The Bayshore Station opening was on March 22.

In regard to the Tamien upgrade project, where some signal tracking took place, Tamien went from being one of the worst crossings to one of the best. The City of San Jose was very helpful with this project.

On March 26 there was an injury accident at San Mateo Station. The man was struck but suffered only treatable injuries.

The Baseball service started April 1.

At the Santa Clara Depot Open House, April 17-18, a Baby Bullet consist will be on display. The Depot will be celebrating its 140th anniversary that weekend as well.

The Monthly Safety and Security Report was distributed.

Chief Development Officer, Howard Goode, is retiring. Mr. Goode has agreed to work part-time throughout the remainder of this year to assist with the reauthorization of Measure A and the close-out of the CTX construction contracts. Mr. Goode is also helping with the BART/SamTrans negotiations. Effective Monday, April 5, Ian McAvoy will be the Chief Development Officer.

The Board the Following Actions:

Adoption of the Caltrain Service Levels.

Authorized Filing of FY2004 Federal Transit Administration (FTA) Applications

April 22, 2004

The Board unanimously approved the Environmental Impact Report for the Transbay Terminal at a joint meeting with the San Francisco Planning Commission.

May 6, 2004

The weeklong safety campaign began this past Monday morning at the Santa Clara station.

Bruce Balshone reported on the last CAC meeting.

Key Caltrain Performance Statistics :

Average Weekday Ridership for March was down 7.8 percent, from 28,129 riders to 25,941.

Year-to-Date Average Weekday Ridership is at 25,882 down from 27,542 which is a 6.0 percent difference.

March Total Revenue was 7.0 percent from $1.69 million to $1.57 million.

On-Time Performance was at 82.6 percent versus 95.4 percent from last March.

March Shuttle Ridership had a decrease of 13.5 percent with 3,497 riders down from 4,044.

Weekend service will resume June 5. Baby Bullet service will begin June 7.

Gas prices are rising which could appeal new ridership.

The Capital budget was pulled from the agenda due to further discussions among all three partners.

The first wrapped train was in revenue service today.

There were four public meetings (San Francisco, San Mateo and two in Santa Clara County) regarding electrification. Staff is seeking public comment on the draft EIR for the electrification program.

Baseball service began on April 1. Caltrain is attracting excess of 3000 riders per game. There is also anticipation to carry riders to San Jose for an extended hockey season.

The Monthly Safety and Security Report was distributed.

The Board Received the Following Informational Items:

Distribution of the FY 2005 Operating Budget.

Caltrain weekday and weekend service promotions plan.

The Board took the following actions:

Revised the Disadvantaged Business Enterprise Program and Proposed DBE Overall Annual Goal for FY 2005.

Authorized a Change Order to the Contract with William P. Young Construction, Inc. in an amount not-to-exceed $75,000 for installation of a mini-high platform at the Hillsdale Station.

Award of on-call Peoplesoft consultant support services contracts.

Award of tunnel rehabilitation project contract to Drill Tech Drilling & Shoring, Inc.

Director Panza asked for an update pertaining to the certain developer and the downtown extension.

Mr. Scanlon responded that there is a developer that has a fully entitled ownership to a property at 80 Natoma Street. Technical people are working together from both groups, in order to possibly accommodate both the developer and the train. Caltrain’s restrictions are less rigid than the High Speed Rail Authority, and the High Speed Rail Authority needs to be accommodated because that would be the route that the High Speed Rail Authority would take. Mr. Scanlon commented that the issue involved the tightness of the curve and the length of the platform. As it stands today, there have been many meetings pertaining to the issue and there will be further developments.

REPORT OF THE EXECUTIVE DIRECTOR

Mr. Goode commented that in addition to working on the reauthorization of Measure A, he will also be working on the Dumbarton Rail Corridor project. In that regard, Mr. Goode reported that both Alameda County and Santa Clara County have both included funding for Dumbarton rail in their sales tax measures. Additionally, with the passage of Regional Measure 2, the balance of the funding for the project will now be funded. Last Thursday, the first meeting with the Policy Committee, which was set up to coordinate this project between the various funding parties. The Committee will be meeting on a quarterly basis.

a) Reauthorization of Measure A

Mr. Goode reported that the Metropolitan Transportation Commission (MTC) approved, unanimously, the draft Expenditure Plan. Steve Kinsey, Chair of MTC, commented that the plan appeared to be a comprehensive and well-balanced measure. Mr. Goode reported that the next step, approval by the cities, has been scheduled. Staff is seeking to have board and staff representation at each meaning.

Mr. Scanlon suggested for the board to contact staff if they are available to attend any of the meetings.

Director Lee questioned if there were any comments in regard to the Oyster Point groundbreaking.

Mr. Scanlon responded that the opening of the second phase Oyster Point flyover was last Friday. He reported that it was a very significant day because the project will be critical to the flow and traffic safety of that area. Mr. Scanlon noted that South San Francisco was an outstanding partner with this project.

Director Lee concurred that it was an outstanding day.

Director Guingona commented that he was sorry that he missed it, especially since he was at the groundbreaking.

REQUESTS FROM THE AUTHORITY

Mr. Scanlon noted that Chair Church was in Washington D.C. and had intentions of phoning into the meeting but was held up in a meeting. However, he did express his general feelings about the matters on the agenda to him.

DATE/TIME OF NEXT MEETING:

June 3, 2004 at 5:00 p.m. at the San Mateo County Transit District Administrative Building, 1250 San Carlos Avenue, San Carlos, CA 94070

REPORT FROM LEGAL COUNSEL

David Miller reported that the board would convene in closed session to discuss the audit services contract, which could give rise to potential claims.

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Meeting convened in closed session at 6:17p.m.

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Mr. Miller reported that the Board had convened in closed session to discuss a matter of potential litigation involving the existing contract for audit services between the Authority and the County Controller. Mr. Miller reported that the County Controller, by letter dated March 29, 2004, advised of his intention to terminate the contract for audit services effective March 31, 2004. The Board decided to decline the offer of the County Controller contained in a subsequent letter, to withdraw his decision to terminate the contract. Mr. Miller further advised that the County Controller did not have a legal right to terminate the contract. Under the circumstances, however, the Authority will proceed to engage a substitute firm at the earliest possible date.

WRITTEN COMMUNICATION TO AUTHORITY

The communication packets were distributed to the Board members.