BOARD MEMBERS ABSENT : Michael Guingona

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

Chair Church called the meeting to order at 5:06 p.m. and Larry Shaine led the Pledge of Allegiance to the flag.

PUBLIC HEARING: ADOPTION of proposed capital and operating budget for FY2005

Jim Shelton, Budget Manager, reported that section 131262(a) of the California Public Utilities Code requires all county transportation authorities adopt an annual budget. In addition, section 131266 of the Code requires that a public hearing be held concerning the annual budget after notifying the public of the time and place of the public hearing by published notice at least 15 days prior to the date of the hearing. In accordance with the applicable law, staff prepared and submitted for review, at the May 6 meeting, the proposed annual budget for FY2005. At that time a formal presentation was provided for both the Operating and Capital Budgets. Also, at that time a call for public hearing was approved and scheduled for today. In the presented staff report, any changes from the May presentation have been highlighted in red.

For the record no speakers were present to speak on this agenda item nor was any correspondence received.

The motion to close the public hearing was unanimously approved.

Director Panza corrected that the FY2005 Proposed Budget spreadsheet had a minor typo in that the Increase (Decrease) Over FY2005 Projected Budget column should read FY2004 not FY2005. Director Panza also questioned the statement, under Significance in the staff report, that reads, “The variance is related to Sales Tax (line 2) which is up $1.1 million or 2.0 percent due to increase in actual results for sales tax revenue performance.” He questioned if that meant that staff is expecting to see a 2.0 percent increase.

Mr. Scanlon clarified that staff is expecting to see a 2.0 percent increase.

Director Panza commented that the numbers in the report for FY2004 projected and adopted budget are identical. He questioned if the TA is actually running 2 percent ahead of what was projected now.

Roger Contreras, Chief Financial Officer, responded that since staff is expecting to receive $56 million, staff felt comfortable in adding two percent to that number, which gives the $57 million shown in the budget.

Director Panza stated that from what he has heard, the two percent sounds very reasonable.

The motion to approve the proposed Capital and Operating Budget for FY2005 was unanimously approved, by roll call, and Resolution 2004-04 was adopted.

CONSENT CALENDAR

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

1. Approval of Minutes of May 6, 2004
2. Adoption of Financial Statements, April 2004
3. Calculation and Adoption of Appropriations Limit for FY2005 {Resolution 2004-05}

PUBLIC COMMENT

None.

CITIZENS ADVISORY COMMITTEE (CAC) REPORT

CAC Chair Larry Shaine noted the presence of fellow CAC members in the audience and reported that at the last CAC meeting:

Several CAC members have been attending the city council meetings where the adoption of the Draft Expenditure Plan was presented.

Joe Hurley gave an update on the FY2005 budget and some agreements in plan related to Phases II & III of the Oyster Point project.

Bill Welch gave a presentation on the current operating statistics and financial information regarding RediCoast.

David Cropper gave a presentation, as a private citizen, for the reauthorization of Measure A.

Reviewed the FY2005 Operating Budget.

Invited all to the next CAC meeting, June 29 at 4:30p.m. Christine Maley-Grubl, Peninsula Traffic Congestion Relief Alliance, will be giving a presentation.  

FINANCE

a) Amendment to Funding Agreement, Oyster Point Project Phase II-III

Howard Goode, Deputy Executive Director, reported that three years ago, the Authority authorized an Agreement with South San Francisco for the second (flyover) and third (hook ramps) phases of the Oyster Point Project. As the City has proceeded, the flyover portion of the project cost was more than originally anticipated. However, the hook ramp portion is costing somewhat less. As part of the overall Agreement, the Authority was providing a loan to the City but it only was for Phase III of the project. Therefore, the City is requesting to be able to shift loan funding to reflect actual costs of construction for Phases II and III and additionally, utilize those funds to pay costs already incurred on the flyover (Phase II) portion of the project. Staff sees no problem with the request and recommended approval of the amendment.

Director Galligan questioned if the loan amounts stay the same.

Mr. Goode confirmed that the loan amount would remain the same, it would just be allocated differently.

The motion to approve the Amendment to Funding Agreement, Oyster Point Project Phase II-III was unanimously approved, by roll call, and Resolution 2004-06 was adopted.

b) Award of Contract to Vavrinek, Trine, Day & Company, LLP for Independent Audit Services

George Cameron, Chief Administration Officer, reported that staff recommends approval to award a contract to Vavrinek, Trine, Day & Company, LLP for Independent Audit Services for two-year base term at a not-to-exceed cost of $23,558 for FY2004 and a not-to-exceed cost of $24,255 for FY2005, in full conformity with the terms and conditions of the Request for Proposal (RFP) for Independent Audit Services issued by the Authority on March 20, 2003. For a variety of reasons, the contract with the County of San Mateo Controller’s Office has been terminated. Vavrinek, Trine, Day & Company, LLP was the second ranked proposer in the RFP process and has indicated a willingness to honor the terms of its proposal as amended by a best and final offer, and to execute an agreement with the Authority as set forth in the RFP. The award of this contract will ensure continuation of professional, independent financial audit services as required by the enabling legislation and the Administrative Code of the Authority.

The motion to approve the award of contract to Vavrinek, Trine, Day & Company, LLP was unanimously approved, by roll call, and Resolution 2004-07 was adopted.

PROGRAM

Capital Projects Status Report – 3rd Quarter

Joe Hurley, Director of Transportation Authority Programs, highlighted a few main projects currently underway. The projects included, the Baby Bullet; the Oyster Point Interchange Project; the Ralston to Marsh Auxiliary Lane Project; and the 3rd to Millbrae Project. Details of all capital projects are contained within the Quarterly Report.

Director Lee commended staff for their work on the Auxiliary Lane Project.

CHAIRPERSON’S REPORT

None.

SAMTRANS LIAISON REPORTS

A written report from the May 12, 2004 meeting was included within the packet to the board.

JOINT POWERS BOARD REPORT

Michael Scanlon reported that on the June 3rd board meeting:

• An “I Make a Difference Award” was given to Will Hastings of Amtrak.
• Recognized Director Yeager for his article written on the Baby Bullet in the Willow Glen Times.
• Key Caltrain Performance Statistics:
  1. April total ridership went from 717,937 to 715,165 riders, a .4 percent decrease.
  2. April average weekday ridership was down 2.0 percent, from 28,886 weekday riders to 28,318.
  3. April total revenue was off 5.8 percent from $1.79 million to $1.68 million.
  4. On-time Performance decreased 7.6 percent with 86.4 percent for April.
  5. April shuttle ridership had a decrease of 5.0 percent with 3,974 riders, down from 4,184.
• Rita Haskin went through the timeline of Baby Bullet and Service Enhancements Activities. The kick-off event will be tomorrow, June 4, at 2:00 p.m. at the San Francisco Station. The Caltrain Festival will be on Saturday, June 5 from 11:30 a.m. until 2:30 p.m. Free weekend service will run on June 5 & 6 and June 12 & 13. There will be station ambassadors June 5, June 7 and June 8. The San Jose Send-off will be on June 7 from 5:30 a.m. until 7:30 a.m.
• Recognized all staff that worked on the FY2005 Operating Budget. The budget is much tighter this year compared to past years. The proposed budget is not without risks. However, it was prepared with the customer in mind and it was important to present an attractive service to compel riders to come back and to enlist new riders as well. Staff will be particularly watching the fuel budget line and cautioned that there may be a need for a temporary fuel surcharge as opposed to a fare increase.
• The JPB has received new directives through the Department of Homeland Security, which will be administered through the Transportation Security Administration.
• Recognized the new Chief of Protective Services, Bill Pedrini.
• Recognized a letter submitted by Bruce Balshone on behalf of the JPB CAC. The letter expressed sympathy to those affected by the recent staff reductions. At the same time, the CAC sees a whole new world of service opening for Caltrain and thanked the board and staff for their contributions.
• The Monthly Safety and Security Report was distributed.
• Trial runs of the new service were May 15-16 and May 22-23.
• The Burlingame ticket station has been closed. There was a public meeting on May 25.
• Baseball service continues to attract riders. There have been excess of 3,400 riders per game.
• Suggested canceling the August board meeting.

The Board Received the Following Informational Items:

• Distribution of the FY 2005 Capital Budget.
• Quarterly Capital Projects Status and Electrification Report.

The Board took the Following Actions:

• Adopted the FY2005 Operating Budget.
• Approved the FY2005 Insurance Program.
• Authorized the Executive Director to submit an application pertaining to 2004 Homeland Security Funding.
• Approved the Updated JPB Procurement Manual.
• Received authorization to enter into an interagency agreement for the Translink project.

Upon asking from Chair Church, no objections for canceling the August board meeting were heard.

Director Panza questioned the status regarding the Transbay Terminal EIS/EIR.

Mr. Scanlon commented that there is an alignment problem with the area in the EIR and the location of 80 Natoma. A fully entitled project to build a 50-story residence is at the location on Natoma Street. In order to build the residence building, the developer would have to go right through the alignment of the downtown extension. Nevertheless, the JPB had a joint meeting with the San Francisco Planning Commission and certified the EIR. Subsequent to that meeting, the developer has appealed that certification to the San Francisco Board of Supervisors. The appeal will be heard on June 8 at the San Francisco Chambers.

David Miller, Legal Counsel, stated that once the appeal is brought to the Board of Supervisors, it will be brought to the Transbay Joint Powers Authority (TJPA). Therefore, the TJPA does not have the authority to take any action until the appeal is heard by the Board of Supervisors.  

REPORT OF THE EXECUTIVE DIRECTOR

Mr. Scanlon publicly commended Larry Shaine and the CAC members who have been attending the city council meetings to support the Reauthorization of Measure A.

a) Eligibility of School Crossing Guard Funding by Measure A Local Transportation Funds

Mr. Scanlon stated that this item is for discussion only and not for action. An official inquiry was made from Foster City as to whether Measure A funds could be used to fund school crossing guards, which is relative to a $40,000 expenditure.

David Miller, Legal Counsel, reported that this issue requires an interpretation of the Expenditure Plan and the enabling statute that governs the Authority. Mr. Miller stated that the category in question is one where the funds come off the top to the cities for a project called Local Streets and Roads. This category provides that 20 percent of the total revenue generated by the sales tax will be allocated to the 20 cities within the county for improvement of local transportation, including streets and roads. The universe of projects is not limited to street repairs or actual capital projects but broadly speaking addresses local transportation. It is Mr. Miller’s understanding that Foster City is asking for consideration of whether crossing guards would be permitted under this category based on the premise that this program deals with transportation in the sense of traffic control, congestion, and safety. Mr. Miller further stated that there is a threshold legal issue that must be addressed derived from the statutory requirement, applicable to all of the recipients of this particular pot of funds, which precludes the use of Measure A funds as a vehicle to substitute for property tax revenues.

The statute states that before the Authority allocates funds, each local government will certify to the Authority that the funds will not be substituted for property tax revenues, which are currently utilized to fund existing local transportation programs. Therefore, in this case, if this were a permitted expenditure, it would also be incumbent on Foster City to demonstrate that this particular program has not historically been funded with property tax revenues, which these funds would supplant. Mr. Miller advised that if the local government is unable to segregate property tax revenues from other general fund revenues, which can’t be so distinguished, substitution of funds from the Authority for general funds is also prohibited. In this particular case, the inquiry involves whether the City can indicate and certify that these funds would not be replacing property tax funds.

Chair Church questioned how the city would prove the segregation of funds.

Mr. Miller responded that it would be the responsibility of the city and he believes it would be difficult to do.

Director Galligan commented that in Burlingame, there is an enterprise fund specifically set up with the gas tax money and the Measure A money that can only be used for the streets and highways. He reported that there are certain things that the money cannot be used for. Director Galligan stated that crossing guard funds could probably come out of the police funds.

Mr. Scanlon commented that staff and Legal Counsel will continue to work with Foster City to see how they would self-certify themselves that this project was compliant under the statutory requirement.

Director Gordon stated that if they were able to meet the second test, he would like to have a discussion about how they were able to satisfy that the crossing guards were a legitimate expense activity.

Director Panza questioned if $10,000 less was spent on road maintenance this year versus last year, would $10,000 have to be forfeited from Measure A.

Mr. Scanlon answered that it is at the discretion of the cities as to how to use the funds, including streets and roads, within the broad scope of local share. There is flexibility. The money could be used for streets, roads and things related to transportation, including shuttles.

Director Lee commented that he is not aware of any city that has enough money for streets and roads. He stated that in order to avoid a domino effect, the TA has to be very judicious about decisions.

Director Galligan questioned if there is a difference with the new Measure A where there could be a different interpretation.

Mr. Miller responded that there is broader language in the new Measure.

Director Galligan questioned if the city would still have to fulfill both prongs of the test.

Mr. Scanlon confirmed that the city would have to be able to meet both prongs, per statute.

Mr. Miller commented that there is reference to the statute in the Implementing Guidelines of the new Expenditure Plan.

Mr. Miller also stated that there has been an elaboration on examples of projects that the cities can implement. Therefore, the county and cities could use their funding to maintain or improve local streets and roads by paving streets and sidewalks; repair potholes; to promote or operate alternate modes of transportation, which may include funding shuttles or sponsoring carpools; bicycling and pedestrian programs; developing and implementing traffic operations and safety projects including signal coordination, bike/pedestrian safety projects; eliminating hazardous conditions or acquiring right-of-way.

Mr. Scanlon stated that although the request came from Foster City, staff will communicate with all the cities and report back to the board as necessary.

b) Reauthorization of Measure A

Mr. Goode reported that the Draft Expenditure Plan so far has been brought to 11 cities and all 11 have approved the Plan. Nine approvals were unanimous and two had dissenting votes in each case.

Mr. Goode commended Chair Church’s staff who aided in writing a letter to Portola Valley that addressed several questions and issues about the Measure that arose from the city council. The letter was able to clarify some confusion over the Measure.

Director Galligan questioned if the legal requirement has been met.

Mr. Goode confirmed that the legal requirement has already been satisfied.

Mr. Hurley acknowledged Onnolee Trapp from the League of Women Voters for her continued contribution and support during the reauthorization process.

REQUESTS FROM THE AUTHORITY

None.

REPORT FROM LEGAL COUNSEL

None.

DATE/TIME OF NEXT MEETING:

July 1, 2004 at 5:00 p.m. at the San Mateo County Transit District Administrative Building, 1250 San Carlos Avenue, San Carlos, CA 94070

WRITTEN COMMUNICATION TO AUTHORITY

The communication packets were distributed to the Board members.