san joaquin hills transportation corridor agency … · approve making the ocers regulation on...

SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCY BOARD OF DIRECTORS

AGENDA

February 12, 2015 9:00 a.m.

TCA Offices

125 Pacifica, Irvine, CA 92618 AGENDA DESCRIPTIONS The agenda descriptions are intended to give notice to members of the public of a general summary of items of business to be transacted or discussed. The listed action represents staff's recommendation. The Board of Directors may take any action it deems to be appropriate on the agenda item, and is not limited in any way by the recommended action. In compliance with the Americans with Disabilities Act, if you require special accommodation for this meeting you should notify the Clerk of the Board 24 hours prior to the meeting at (949) 754-3492. The agenda is posted at the TCA office and is also available on the website at www.thetollroads.com. Materials distributed to the majority of the members of the TCA Board of Directors in connection with any matter subject to consideration at this meeting in open session are available for public inspection at the TCA offices.

I. CALL TO ORDER INVOCATION (Director Shea) PLEDGE OF ALLEGIANCE (Chairman Schoeffel) OATH OF OFFICE

Chairman Schoeffel will administer the Oath of Office to Laurie Davies, the new Director for the City of Laguna Niguel and Scott Peotter, the new Director from the City of Newport Beach.

ROLL CALL Chairman Scott Schoeffel City of Dana Point Vice-Chair Ross Chun City of Aliso Viejo Director Sam Allevato City of San Juan Capistrano Director Lisa Bartlett County of Orange, 5th District Director Melody Carruth City of Laguna Hills Director Bert Hack City of Laguna Woods Director Michele Martinez City of Santa Ana Director Laurie Davies City of Laguna Niguel Director Gary Monahan City of Costa Mesa Director Scott Peotter City of Newport Beach Director Ed Sachs City of Mission Viejo Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District Director Kathy Ward City of San Clemente Ryan Chamberlain Caltrans, Ex-Officio Member

REVISED February 9, 2015

http://www.thetollroads.com/

SJHTCA Board of Directors Agenda February 12, 2015

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II. PUBLIC COMMENTS At this time, members of the public may address the Board of Directors regarding any items within the subject matter jurisdiction of the Board of Directors, but no action may be taken on off-agenda items unless authorized by law. Comments shall be limited to three (3) minutes per person and twenty (20) minutes for all comments unless the Chairman, subject to the approval of the Board, sets different time limits.

III. CONSENT CALENDAR (ITEMS 1 – 6)

All matters listed under the Consent Calendar are considered routine and will be enacted by one vote. There will be no discussion of these items unless Board Members request specific items be removed from the Consent Calendar for separate action. 1. MINUTES OF THE DECEMBER 11, 2014 BOARD MEETING (Kathleen Loch, Clerk of the Board) FILE NO. (2015S-001) ACTION: Approve Minutes. 2. SAN JOAQUIN HILLS INVESTMENT REPORT (Howard Mallen, Director of Finance) FILE NO. (2015S-003) Enclosed are the quarterly investment reports for the San Joaquin Hills Transportation

Corridor Agency (SJHTCA) as of December 31, 2014. As of December 31, 2014, all indenture funds are invested in accordance with the permitted investment section of the respective indentures and all non-indenture funds are invested in compliance with both the California Government Code and SJHTCA Investment Policy.

ACTION: Receive and file. 3. QUARTERLY PROCUREMENT REPORT (Eileen Harrigan, Director, Contracts) FILE NO. (2015J-004)

Per the procedures identified in the Contracts and Procurement Services Policies and Procedures Manual, adopted by the Boards of Directors in 2014, staff is providing a quarterly report of procurement activity for the 2nd quarter of fiscal year 2015. The attachments to this report identify all requisitions and contract actions authorized between October 1st and December 31st, 2014.

ACTION: Receive and file.


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4. CURRENT INSURANCE COVERAGE (Howard Mallen, Director of Finance) FILE NO. (2015J-002)

The Foothill/Eastern Transportation Corridor Agency (F/ETCA) and the San Joaquin Hills Transportation Corridor Agency (SJHTCA) bind numerous insurance policies annually. This report provides a summary of the current coverages and related costs.

ACTION: Receive and file. 5. ADOPT OCERS REGULATION – WAIVER OF MEMBERSHIP (Sherri McKaig, Manager, Human Resources & Administration) FILE NO. (2015J-006)

Staff recommends approving the OCERS regulation on waiver of membership which allows any eligible newly-hired TCA employee (aged 60 or over with no previous service credit in OCERS) to elect to waive membership in OCERS.

ACTION: 1. Approve making the OCERS regulation on Waiver of Membership applicable to employees of TCA, allowing any eligible newly-hired employees of TCA to waive membership in the Orange County Employees Retirement System (OCERS).

2. Authorize the chief executive officer to execute the OCERS Employer’s Concurrence - Waiver of Membership form.

3. Authorize Human Resources to provide the OCERS Waiver of Membership form to all eligible newly-hired employees, to verify if an employee electing to waive membership is eligible and to determine requirements for that employee to participate in state or federal programs providing retirement benefits, and to ensure the necessary steps are taken to enroll the employee in any such program.

6. ARBITRAGE REBATE AND YIELD RESTRICTION COMPLIANCE SERVICES

CONTRACT (Amy Potter, Chief Financial Officer) FILE NO. (2015S-004)

The refinancing of the San Joaquin Hills Transportation Corridor Agency’s debt in November 2014 improved the agency’s financial position and achieved all of the Board of Directors’ defined goals. The refinance was completed under such favorable market conditions that assistance from a fully qualified firm is required to ensure compliance with the agency’s tax certificate that was part of the bond issuance. These tax compliance services will be required during the life of the bonds and as such agency staff conducted a request for proposal for arbitrage rebate and yield restriction compliance services and determined PFMAM to be the most qualified proposer. Therefore, staff requests approval of the contract with PFMAM for arbitrage rebate and yield restriction compliance services.

ACTION: Authorize the Chief Executive Officer to execute a five-year contract with one five-year

option (K000993) with PFM Asset Management LLC (“PFMAM”) to provide arbitrage rebate and yield restriction compliance services for an annual fee of $18,000.


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IV. PRESENTATION/CONSENT (ITEM 7) 7. SECOND QUARTER FISCAL YEAR 2015 BUDGET STATUS REPORT (Howard Mallen, Director of Finance) FILE NO. (2015S-005)

Through the end of the second quarter of Fiscal Year 2015, the San Joaquin Hills Transportation Corridor Agency received a total of $75.1 million in revenue or 53.9% of the annual budget. Net Toll Revenue, Fees and Penalties, Development Impact Fees, and Interest Earnings were above target at 51.8%, 63.6%, 80.2%, and 52.1% respectively.

Total uses were $40.7 million or 35.6% of the annual amended budget at the end of the second quarter of the fiscal year. Administration, Planning, Environmental and Construction, and Toll Operations were below the annual amended budget at 32.1%, 30.8%, and 46.8%, respectively. Debt was at an expected 35.0%.

ACTION: Receive and file.

V. BOARD BUSINESS (ITEM 8) 8. CONTRACT AMENDMENT FOR PRINTING AND MAIL HOUSE SERVICES (Joyce Hill, Director, Customer Service) FILE NO. (2015J-005)

QuestMark was selected through a competitive procurement process to provide the agencies with printing and mail house services. Based on the increased demand for QuestMark’s customer service-related printing and mail handling services, estimated expenses incurred by F/ETCA in the second year of the contract are expected to be greater than those allowed as a RBE item. Staff recommends board approval of the contract amendment with QuestMark.

ACTION: 1. Authorize the CEO to execute Amendment No. 2 to Contract No. K000858 with

QuestMark, for printing and mailing services for FY15 in an amount not-to-exceed $68,000.

2. Authorize the CEO to execute additional changes to this contract within five percent of

the authorized expenditure value ($3,400) without further Board action. CHIEF EXECUTIVE OFFICER’S REPORT (Michael Kraman, Chief Executive Officer)

• Traffic & Revenue Update • All Electronic Tolling Update

(Joyce Hill, Director, Customer Service)


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DIRECTORS’ REPORTS AND NEW BUSINESS (Scott Schoeffel, Chairman)

• Ad Hoc Committees – Monthly Reports • Ad Hoc Committee Assignments

VI. CLOSED SESSION

No Closed Session items for discussion.

VII. ADJOURNMENT

The next regular meeting of the San Joaquin Hills Board of Directors will be held March 12, 2015, at 9:00 a.m., TCA Offices, 125 Pacifica, Irvine, CA 92618.

SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCY BOARD OF DIRECTORS

MINUTES

December 11, 2014 9:00 a.m.

TCA Offices

125 Pacifica, Irvine, CA 92618 I. CALL TO ORDER INVOCATION (Director Allevato) PLEDGE OF ALLEGIANCE (Chairman Schoeffel)

OATH OF OFFICE Chairman Schoeffel administered the Oath of Office to Ed Sachs, the new alternate Director

for the City of Mission Viejo, and Kathy Ward, the new Director for the City of San Clemente.

ROLL CALL Chairman Scott Schoeffel City of Dana Point Vice-Chair Ross Chun City of Aliso Viejo (Departed During Item #6) Director Sam Allevato City of San Juan Capistrano Director Lisa Bartlett County of Orange, 5th District Director Melody Carruth City of Laguna Hills Alternate Keith Curry City of Newport Beach Director Bert Hack City of Laguna Woods (Arrived during Public Comments) Alternate Ed Sachs City of Mission Viejo Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District Director Kathy Ward City of San Clemente Adnan Maiah Caltrans, Ex-Officio Member Absent: Director Michele Martinez City of Santa Ana Director Gary Monahan City of Costa Mesa II. PUBLIC COMMENTS

There were no public comments.

SJHTCA Board of Directors Minutes December 11, 2014

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III. CONSENT CALENDAR (ITEMS 1, 2 & 4)

Directors Bartlett and Spitzer pulled Item Number 3 from the Consent Calendar for discussion.

ACTION: Approve Consent Calendar Items 1, 2 and 4. MOTION: Carruth, SECOND: Curry VOTE: Unanimous (with abstentions on Item 1 by Directors Bartlett, Curry, Sachs,

Spitzer, Ward) 1. MINUTES OF THE NOVEMBER 13, 2014 BOARD MEETING (Kathleen Loch, Clerk of the Board) FILE No. ((22001144SS--000011)) ACTION: Approve Minutes. 2. SAN JOAQUIN HILLS INVESTMENT REPORT (Howard Mallen, Director of Finance) FILE NO. 2014S-003) Enclosed are the quarterly investment reports for the San Joaquin Hills Transportation

Corridor Agency (SJHTCA) as of October 31, 2014. As of October 31, 2014, all indenture funds are invested in accordance with the permitted investment section of the respective indentures and all non-indenture funds are invested in compliance with both the California Government Code and SJHTCA Investment Policy.

ACTION: Receive and file. 4. AMENDMENT OF CEO’S EMPLOYMENT CONTRACT (Sherri McKaig, Manager, Human Resources & Administration) FILE NO. (2014J-045)

Staff recommends that Mr. Kraman’s CEO employment contract section 4.2.7 Deferred Compensation be revised to provide for an employer contribution to a section 401(a) plan instead of the 457 plan. There is no monetary change in the CEO compensation amounts.

ACTION: 1. Authorize the amendment of CEO’s employment contract to allow the approved employer

contribution to the section 457(b) plan to be contributed instead as an employer contribution to a section 401(a) plan.

2. Grant approval to the officers to prepare and execute the necessary amendments.


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ITEM PULLED FROM THE CONSENT CALENDAR FOR DISCUSSION 3. MANAGEMENT DEVELOPMENT TRAINING (Sherri McKaig, Manager, Human Resources & Administration) FILE NO. (2014J-040)

Staff recommends Development Dimensions International (DDI) for training of TCA’s manager-level staff. DDI is a recognized leader in the area of employee training and staff development and offers an extensive program for front-line managers.

ACTION: Authorize the CEO to execute a contract with Development Dimensions International (DDI)

for management development training in an amount not to exceed $14,500.

There was no staff report provided. Sherri McKaig. Manger, Human Resources, responded to questions.

Director Bartlett requested that staff provide the justification for the sole source contract.

Sherri McKaig indicated there was an error in the Board report and PSR and that this was not a sole-source contract but a simplified procurement. She researched and spoke to three other training and development companies and out of the four, DDI was selected. Ms. McKaig noted the error was made on the PSR where it stated that this was a sole-source contract. ACTION: Approve staff recommendation noting the correction to the PSR report,

which will be reflected in the minutes. MOTION: Carruth SECOND: Curry VOTE: Unanimous

IV. BOARD BUSINESS (ITEMS 5-6) 5. ALL ELECTRONIC TOLLING CONVERSION – CIVIL PUNCHLIST ITEMS (David Lowe, Acting Chief Engineer) FILE NO. (2014J-049)

Staff requests authorization for a change order to Ortiz Enterprises for additional work associated with the AET Civil Construction contract. The additional work is related to final punch list items which are not covered under the contract and are being required by Caltrans.


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ACTION: 1. Authorize the chief executive officer (CEO) to issue a change order to Ortiz Enterprises, Inc. for construction services at a cost of $57,975.

2. Authorize the CEO to issue a change order to Ghirardelli Associates for construction engineering management services at a cost of $5,798.

3. Authorize the CEO to make additional changes deemed necessary and execute future amendments within five percent (or $3,189) of the above amount without further action by the Board of Directors.

David Lowe, Acting Chief Engineer, provided the staff report.

There was no Board discussion on this item.

ACTION: Approve staff recommendation. MOTION: Shea SECOND: Caruth VOTE: Unanimous

6. SIGNAGE ENHANCEMENTS – DESIGN SERVICES (David Lowe, Acting Chief Engineer) FILE NO. (2014J-048) Consultant services are necessary to design signage modifications to be implemented

throughout the toll road system, including along the approaches to the toll roads from the adjacent highways.

ACTION: Authorize the CEO to issue a change order to HDR Engineering for design services at a cost

of $139,622 and authorize the CEO to make additional changes deemed necessary and execute future amendments within five percent (or $6,981) of the above amount without further action by the Board of Directors.

David Lowe, Acting Chief Engineer, provided the staff report and responded to questions.

Additional information was provided by Mike Kraman, Chief Executive Officer and Lisa Telles, Chief Communications Officer.

Board discussion included: Questions raised from the Board regarding the possibility of

incorporating all of the signage into one large sign; if the agency is restricted by Caltrans in making certain modifications to certain types of signs or does the TCA have the ability to do that and are we unrestricted in how our theme rolls out; signage consistency throughout the State; Caltrans State standards on signage; and the explanation of the use of the color purple banner on current signage.


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Other discussion included the clarification on the theory or thought process regarding signage that reflects toll rate changes at the toll plazas; if our objective is to educate our ridership the committee needs to consider identifying or suspending signage from the toll gantry in regards to identifying toll locations and the city that they are located in; verification as to why our current messaging is “One-Time Toll” versus “Pay on Line;” and in terms of timing, is there some significant downside to this going to the committee, getting this vetted, and then coming back at the next Board Meeting with the authorization attached to a more concrete understanding of the signage.

Director Spitzer was not comfortable approving the entire amount for this project stating the

Board will lose control over a $300,000 contract if the entire amount is authorized today and questioned if a $50,000 split between the two agencies would be enough to move forward. Mr. Lowe indicated that amount would most likely cover the costs for the initial work to be performed.

Director Spitzer moved to approve $25,000 to move forward.

There was no second to the motion.

ACTION: Moved by Director Carruth, seconded by Director Allevato to approve staff recommendation.

Further discussion included: Comments made by Board Members that it is imperative that the agency has a professional company to do some hand holding with staff and the Board as we vet and discuss this; the TCA needs to move forward with this as the public is looking for assistance, clear information, and better communication; that a focus group be developed to assist in the process; and clarification on messaging – who is involved in developing the messaging, and the sign modifications.

Chairman Schoeffel called for the vote on the motion: AYES: Allevato, Schoeffel, Bartlett, Carruth, Curry NAYES: Sachs, Shea, Spitzer, Ward ABSTAIN: Hack The motion failed due to lack of a majority vote.

Director Spitzer then presented an alternative motion to support half of the $139,622 in funding for San Joaquin Hills Agency’s portion of this contract and that staff would return for approval of the other half at a future date, when the sign concepts were more fully developed and had gone through the Joint Toll Operations Ad Hoc committee. ALTERNATIVE MOTION:


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ACTION: Approval of half of the $139,622 in funding for San Joaquin Hills Agency’s portion of this

contract with HDR.

MOTION: Shea SECOND: Spitzer VOTE: Unanimous

CHIEF EXECUTIVE OFFICER’S REPORT (Michael Kraman, Chief Executive Officer)

CEO Kraman announced that the agency will be on the radio next week in the City Square with Jerry Amante on Wednesday, December 17.

• All Electronic Tolling Update

(Patti Bond, Senior Operations Analyst)

Patti Bond, Senior Operations Analyst provided the Board an update on all electronic tolling (AET). She noted that violation activity continues to decrease, with less pursuable violations and first-time violations since the transition to AET. In the last eight weeks improvement to the systems were made and an average of nine percent more calls were answered by customer service representatives, resulting in a 69 percent reduction of overload calls. Violation disputes received through the website or in the mail have also decreased substantially. Additional customer service representatives, telecom lines, website enhancements and modifications to customer correspondence continue to improve customer service response.

DIRECTORS’ REPORTS AND NEW BUSINESS (Scott Schoeffel, Chairman)

Directors Spitzer and Bartlett requested approval from the Board for the County to obtain some de minimis resources from TCA staff for discussions on how the agencies achieved transponder interoperability. The interoperability discussion took a lot of work and advanced a lot of significant public policy coordination in the State of California for the operation of tolls. Director Spitzer further stated the need to understand the technical side and history of how the TCA obtained that interoperability for our transponders. Following discussion, the Board granted Director Spitzer’s request.


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OUTGOING BOARD MEMBER RECOGNITION (Scott Schoeffel, Chairman The following outgoing Board Members were recognized for their service and leadership:

• Rush Hill – Newport Beach • Robert Ming – Laguna Niguel

V. CLOSED SESSION There was no need for a closed session. VI. ADJOURNMENT

The meeting was adjourned at 10:08 a.m. The next regular meeting of the San Joaquin Hills Board of Directors will be held January 8, 2015, at 9:00 a.m., TCA Offices, 125 Pacifica, Irvine, CA 92618.

ATTEST: Kathleen Loch, CAP-OM, Clerk of the Board Sherri McKaig, Assistant Secretary to the Board Scott Schoeffel, Chairman San Joaquin Hills Board of Directors

125 Pacifica, Irvine, CA 92618 949/754-3400 FAX 949/754-3467

DATE: February 12, 2015 TO: San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Howard Mallen, Director of Finance SUBJECT: Investment Reports STAFF RECOMMENDATION: Receive and file. BACKGROUND: The San Joaquin Hills Transportation Corridor Agency (SJHTCA) is required per section VII of its investment policy to render a quarterly report to the Board of Directors detailing the types of investments in the portfolio, the dollar amount invested in each category, the rate of interest in each category and the total portfolio yield. DISCUSSION: Compliance Enclosed are the investment reports for the SJHTCA for the quarter ended December 31, 2014. These investment reports reflect only assets held by the Trustee (Bank of New York), which include 1997 and 2014 indenture accounts and three non-indenture accounts. The remaining cash and investments that are held directly by the agency total $5.4 million; $2.4 million in demand deposits and $3.0 million in money market fund investment. There is sufficient liquidity to meet the agency’s anticipated expenditure requirements for the next six months. As of December 31, 2014, all indenture funds are invested in accordance with the permitted investment section of the respective indentures and all non-indenture funds are invested in compliance with both the California Government Code and SJHTCA Investment Policy. Portfolio Update Since September 30, 2014, the adjusted cost portfolio balance decreased by approximately $121.2 million to $271.6 million. The decrease is primarily due to the refinancing of the 1993 Bonds and a portion of the 1997 Bonds. The portfolio’s net decrease associated with the

SJH Investment Reports File No. 2015S-003 February 12, 2015 Page 2 refinancing transaction was $157.0 million. The components of this decrease include sources of $1,471.1 million of bond proceeds offset by $1,611.8 million of payments to bondholders, and $16.3 million for costs related to the refinancing transaction. Specifically included in this net reduction are $51.7 million of Debt Service funds that were to be paid to bondholders in January 2015 that were paid to bondholders through the refinance. Also, the Debt Service Reserve requirement was reduced in the refinancing and the Toll Stabilization Fund requirement was eliminated in the refinancing. It was determined that the most efficient investment of these funds was to reduce the amount of debt issued, thereby reducing future interest costs. As such, Debt Service Reserve funds of approximately $90 million and Toll Stabilization funds of $15.3 million were used in the refinancing to reduce the required bond issuance. The refinancing places the agency in a solid financial position, significantly improving the agency’s debt metrics and achieved all of the following:

• Upgraded the credit ratings issued by Fitch and S&P to investment grade on the senior lien bonds

• Restored toll setting authority to the Board; Traffic and Revenue Study based projections on inflationary toll rate increases versus prior maximum toll rate increases

• Restored control of certain surplus revenues • Created increased margin to withstand future economic downturns or to moderate toll

increases • Established strong reserves and liquidity • Lowered debt service growth over the next 10 years from 8.8% to 1.6% • Reduced peak debt service from current $269 million to less than $186 million, or a 31%

reduction • All bonds issued as Current Interest Bonds; no CABs issued • Net present value savings of $44 million

In association with the 2014 refinancing, the agency invested $155.6 million in Treasury Securities—State and Local Government Series, also known as SLGS, at a zero percent interest rate. SLGS are special purpose securities that are issued to state and local government entities, upon their request, to assist the agency to comply with federal tax laws and Internal Revenue Service arbitrage regulations when the entity has cash proceeds to invest from their issuance of tax exempt bonds. As the agency experienced such favorable conditions at the time of the refinancing, the purchase of SLGS was needed to comply with yield restrictions and tax arbitrage rebate requirements. The remaining change in the portfolio, an increase of $35.8 million includes toll revenue transfers of $36.9 million, the receipt of $1.7 million in development impact fees and interest income of $1.8 million (interest income received is offset by amortization of premium). These receipts are partially offset by toll operations related expenses of $4.0 million, and $0.6 million for nonoperating expenses.

SJH Investment Reports File No. 2015S-003 February 12, 2015 Page 3 The weighted average maturity of the SJHTCA portfolio, exclusive of the SLGS mentioned above, is 0.6 years. The weighted average YTM (Yield to Maturity @ Cost), also exclusive of the SLGS, decreased 20 basis points, from 0.47 percent at September 30, 2014 to 0.27 percent at December 30, 2014 primarily due to liquidation of funds related to the SJHTCA bond refinance. The market value of the portfolio is materially equal to the adjusted cost of the portfolio at month end. Market values reported herein have been obtained from Interactive Data Corporation, which provides an online interface to the agency’s investment database system. These market values are compared for reasonableness with the market values provided by the Trustee. Credit Update To maintain safety, adherence to an investment policy strategy of purchasing only top-rated securities and diversification of security types and maturities is required. As shown in Exhibit 2, approximately 69 percent of the entire portfolio is invested in U.S. Treasuries and Agency bonds that are rated AA+ by Standard & Poor’s and Aaa by Moody’s. The remaining portfolio is primarily invested in municipal bonds, all rated in one of the three highest rating categories by at least two nationally recognized statistical rating agencies, and short-term commercial paper rated “A1/P-1”, the second highest rating by the two rating agencies noted above. Economic Update The Federal Reserve’s Federal Open Market Committee (“FOMC”) met in December. The FOMC stated, “information received since the last meeting in October suggest that economic activity is expanding at a moderate pace. Labor market conditions improved further, with solid job gains and a lower unemployment rate.” Additionally, household spending is rising moderately and business fixed income investment is advancing, while the recovery in the housing sector remains slow. The FOMC seeks to foster maximum employment and price stability. It expects, with appropriate policy accommodation, economic activity will expand at a moderate pace. The Committee considers the federal funds rate of zero to ¼ percent appropriate at this time. Many economists do not anticipate any change in the federal funds rate from the FOMC until the fall of 2015 or later. The American economy added 252,000 new jobs in December. The unemployment rate declined from 5.9 percent on September 30, 2014 to 5.6 percent at the end of December. With revisions to the October and November employment reports, monthly job increases have averaged 289,000 over the past three months. In 2014, job growth averaged 246,000 per month, compared with 194,000 per month in 2013.

SJH Investment Reports File No. 2015S-003 February 12, 2015 Page 4 The labor force participation rate was little changed in December at 62.7%. The employment-population ratio was 59.2 percent for the third consecutive month. The S&P/Case-Shiller data released, for October 2014 shows that the pace of home prices across the country continues to rise but at a slower rate. The 10-City Composite has gained 4.4 percent year-over-year, and the 20-City Composite has gained 4.5 percent year-over-year. According to David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, “After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015.” He also stated, “most national economic statistics, other than those connected to housing, posted positive reports in November and early December.” Exhibits Portfolio Summary – (Exhibit 1) This report provides a summary of the SJHTCA total portfolio value by asset category on both an adjusted cost basis (historical cost adjusted for the cumulative amortization of premium/discount recorded to date) and market value basis (fair value based on quoted market prices). Portfolio Summary – Graph (Exhibit 2) This pie chart is a representation of the market value of the SJHTCA total portfolio by asset category and corresponding percentage of the total portfolio market value. The investment policy specifies percentage limitations on certain asset categories. At December 31, 2014, the agency holdings were all below the required maximum percentage limits. The changes in sector allocation at December 31, 2014 as compared to September 30, 2014 are primarily related to the refinancing transaction. As stated previously the agency invested $155.6 million in Treasury Securities—State and Local Government Series, increasing the sector allocation to U.S. Treasuries. Additionally, the agency has invested in commercial paper to obtain a slightly better short-term yield. At December 31, 2014, the agency holdings were all within the maximum percentage limits of the investment policy. Portfolio Appraisal – Report (Exhibits 3 & 4) These reports provide security level detail and market values of all cash and investment securities held by the Trustee. Two reports are provided; one for non-indenture funds and the second for 1997 and 2014 indenture funds. The non-indentured funds, include $3.4 million of restricted funds, not available for construction related purposes as can be seen in Exhibit 5.

SJH Investment Reports File No. 2015S-003 February 12, 2015 Page 5 Portfolio Composition by Fund – Report (Exhibit 5) Several fund categories have been established both outside of the indenture and in accordance with indenture provisions. All bond proceeds allocated for construction have been disbursed. The construction and general reserve funds are unrestricted custody funds. The restricted custody funds are set aside for meeting current expenses if required. The debt service fund includes net toll revenues transferred to cover debt service payments. The debt service reserve fund requirement was funded at the time of the 2014 refinancing. An additional supplemental reserve has been established with the refinancing. The use and occupancy fund is a reserve for operating emergencies. The enterprise fund includes revenue and expense accounts pertaining to the operation of the corridor. Net toll revenues for the current month are transferred to the appropriate debt service, reserve, and custody accounts at the beginning of the following month. Fixed Income Holdings – SJHTCA Indenture and Non-Indenture Funds (Exhibit 6)

This report provides a detailed description of each fixed income security held in the SJHTCA total portfolio and the corresponding bond rating by Standard & Poor’s (S&P) and Moody’s. At December 31, 2014, all of the agency’s investments were rated at or above the minimum rating required per the agency’s investment policy and debt agreements. This report includes all agency security holdings with the exception of money market funds and cash. Investment Definitions (Exhibit 7) This is a list of common terminology used to describe the agency’s investment portfolio. Staff has provided these definitions to assist the Board in their review of the agency’s investment practices. BUDGET: N/A CONCLUSION: Enclosed are the quarterly investment reports for the San Joaquin Hills Transportation Corridor Agency (SJHTCA) as of December 31, 2014. As of December 31, 2014, all indenture funds are invested in accordance with the permitted investment section of the respective indentures and all non-indenture funds are invested in compliance with both the California Government Code and SJHTCA Investment Policy. Attachments

Exhibit 1

Adjusted PctSecurity Type Cost Market Value Assets Yield

Money Market & CashMONEY MARKET & CASH 17,853,062.65 17,853,062.65 6.6% 0.00

17,853,062.65 17,853,062.65 6.6% 0.00

Commercial PaperCOMMERCIAL PAPER 47,747,648.98 47,750,631.38 17.6% 0.29

47,747,648.98 47,750,631.38 17.6% 0.29

U.S. TreasuriesTREASURY BILLS - - 0.0%TREASURY NOTES 201,181.16 201,531.20 0.1% 0.50

201,181.16 201,531.20 0.1% 0.50

U.S. AgenciesFHLB BOND 4,198,547.78 4,191,747.80 1.5% 0.48FHLB DISCOUNT NOTE 13,399,750.83 13,399,906.20 4.9% 0.10FNMA BOND 13,839,908.93 13,854,020.52 5.1% 0.41AGENCY BOND 699,668.96 698,800.20 0.3% 0.60

32,137,876.50 32,144,474.72 11.8% 0.34

Municipal BondsMUNICIPAL BONDS 18,083,791.66 18,089,701.00 6.7% 0.41

18,083,791.66 18,089,701.00 6.7% 0.41

TOTAL PORTFOLIO WITHOUT TREASURY SLGS 116,023,560.95 116,039,400.95 42.8% 0.27

U.S. TreasuriesTREASURY SLGS 155,556,591.00 155,556,591.00 57.2% 0.00

TOTAL PORTFOLIO 271,580,151.95 271,595,991.95 100.0% 0.11

Transportation Corridor AgenciesPORTFOLIO SUMMARY

San Joaquin Hills Transporation Corridor Agency12/31/2014

SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCYINDENTURE AND NON-INDENTURE FUNDS

ASSET ALLOCATION COMPARISON - MARKET VALUE

Exhibit #2

Money Market & Cash 3.5%

Commercial Paper 4.5%

U.S. Treasuries 43.7%

U.S. Agencies 33.6%

Corporate Notes 6.7%

Municipal Bonds 8.0%

September 30, 2014 Total Market Value $392,698,171

Money Market & Cash 6.6%

Commercial Paper 17.6%

U.S. Treasuries 57.3%

U.S. Agencies 11.8%

Municipal Bonds 6.7%

December 31, 2014 Total Market Value $271,595,992

Transportation Corridor AgenciesPORTFOLIO APPRAISAL - SETTLED TRADES

San Joaquin Hills Transportation Corridor AgencyNon-Indenture Funds

December 31, 2014

Adj Unit Total Adjusted Market Pct.Quantity Security Cost Cost Price Value Assets Yield

MONEY MARKET & CASHDREYFUS TREASURY MONEY MARKET FUND

2,793,992.28 2,793,992.28 8.8 0.0

2,793,992.28 2,793,992.28 8.8 0.0

COMMERCIAL PAPER2,000,000 Credit Agricole CIB

Commercial Paper99.94 1,998,704.40 99.92 1,998,491.60 6.3 0.2

0.220% Due 04-17-153,000,000 Natixis Commercial

Paper99.91 2,997,232.37 99.91 2,997,225.60 9.5 0.3

0.270% Due 05-04-154,995,936.76 4,995,717.20 15.8 0.3

TREASURY NOTES200,000 U.S. TREASURY

NOTE100.59 201,181.16 100.77 201,531.20 0.6 0.5

1.250% Due 09-30-15Accrued Interest 638.74 0.0

201,181.16 202,169.94 0.6 0.5

FHLB BOND1,000,000 FEDERAL HOME

LOAN BANK BOND100.00 1,000,000.00 100.00 999,975.00 3.2 0.1

0.090% Due 01-20-153,200,000 FEDERAL HOME LN

BKS99.95 3,198,547.78 99.74 3,191,772.80 10.1 0.6


4,198,547.78 4,192,549.47 13.3 0.5

FNMA BOND11,940,000 FEDERAL NATL

MTG ASSN100.00 11,940,266.95 100.02 11,942,782.02 37.8 0.4

0.375% Due 12-21-151,900,000 FEDERAL NATL

MTG ASSN99.98 1,899,641.97 100.59 1,911,238.50 6.1 0.5

0.500% Due 03-30-16Accrued Interest 3,645.14 0.0

13,839,908.93 13,857,665.66 43.9 0.4

AGENCY BOND700,000 FARMER MAC NOTE 99.95 699,668.96 99.83 698,800.20 2.2 0.6


699,668.96 698,846.87 2.2 0.6

MUNICIPAL BONDS1,700,000 INDIANA ST FIN

AUTH REV100.20 1,703,362.67 100.05 1,700,901.00 5.4 0.4

0.750% Due 07-01-152,000,000 BAY AREA TOLL

AUTH CALIF TOLL105.70 2,114,059.33 105.83 2,116,660.00 6.7 0.4

5.000% Due 04-01-16

1

Exhibit 3

Transportation Corridor AgenciesPORTFOLIO APPRAISAL - SETTLED TRADES

San Joaquin Hills Transportation Corridor AgencyNon-Indenture Funds

December 31, 2014

Adj Unit Total Adjusted Market Pct.Quantity Security Cost Cost Price Value Assets Yield

1,000,000 UNIVERSITY CALIF REVENUE BOND

100.22 1,002,203.39 99.78 997,830.00 3.2 0.5

0.659% Due 05-15-16Accrued Interest 32,217.06 0.1

4,819,625.39 4,847,608.06 15.3 0.4

TOTAL PORTFOLIO 31,548,861.26 31,588,549.46 100.0 0.4

2

Exhibit 3

SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCYPORTFOLIO COMPOSITION BY FUND

INDENTURE AND NON-INDENTURE FUNDS DECEMBER 31, 2014

Exhibit 5

NON-INDENTURE FUNDS

SECURITY TYPE

CONSTRUCTION & GENERAL

RESERVE FUNDS

CURRENT EXPENSE

RESERVE FUND DEBT SERVICE

FUNDS DEBT SERVICE

RESERVE FUNDS

USE & OCCUPANCY

FUND ENTERPRISE

FUND TOTAL

MONEY MARKET/CASH 2,630,161 163,831 581,055 86,390 1,813,321 12,578,305 17,853,063

COMMERCIAL PAPER 4,995,717 42,754,914 47,750,631

U.S. TREASURIES:TREASURY BILLS - TREASURY NOTES 201,531 201,531 TREASURY SLGS 155,556,591 155,556,591

201,531 - - 155,556,591 - - 155,758,122

U.S. AGENCIES:FHLB DISCOUNT NOTE 13,399,906 13,399,906 FNMA/FHLMC DISCOUNT NOTE - AGENCY DISCOUNT NOTE - FHLB BOND 999,975 3,191,773 4,191,748 FNMA BOND 13,842,018 12,003 13,854,021 FHLMC BOND - AGENCY STRIPS - AGENCY BOND 698,800 698,800

15,540,793 3,203,776 13,399,906 - - - 32,144,475

MEDIUM TERM CORPORATE NOTES -

MUNICIPAL BONDS 4,815,391 13,274,310 - 18,089,701

LOCAL AGENCY INVESTMENT FUND -

TOTAL PORTFOLIO 28,183,594 3,367,607 13,980,961 198,397,895 15,087,631 12,578,305 271,595,992

ACCRUED INTEREST 37,181 168 - 103,133 - 140,483

TOTAL COMBINED PORTFOLIO 28,220,775$ 3,367,775$ 13,980,961$ 198,397,895$ 15,190,764$ 12,578,305$ 271,736,475$

MARKET VALUEINDENTURE FUNDS

Transportation Corridor AgenciesFIXED INCOME HOLDINGS - SETTLED TRADES

San Joaquin Hills Transporation Corridor AgencyDecember 31, 2014

Date/PriceAdj.Unit Adjusted

Description Symbol Par Value Cost Total Cost S&P Moody Call Put

COMMERCIAL PAPERAbbey National North America LLC Commercial Paper

0027a1sj9 10,000,000 99.88 9,987,819.95 A-1 P-1

0.320% Due 05-18-15Abbey National North America LLC Commercial Paper

0027a1sv2 1,600,000 99.88 1,598,026.33 A-1 P-1

0.300% Due 05-29-15Credit Agricole CIB Commercial Paper

22533urh8 2,000,000 99.94 1,998,704.40 A-1 P-1

0.220% Due 04-17-15Credit Agricole CIB Commercial Paper

22533usj3 12,000,000 99.89 11,986,297.60 A-1 P-1

0.320% Due 05-18-15Natixis Commercial Paper 63873ks40 7,200,000 99.91 7,193,357.68 A-1 P-10.270% Due 05-04-15Natixis Commercial Paper 63873ksj7 15,000,000 99.89 14,983,443.03 A-1 P-10.290% Due 05-18-15COMMERCIAL PAPER Total 47,747,648.98

TREASURY SLGSU.S. Treasury SLGS s35347510 117,956,370 100.00 117,956,370.00 AA+ Aaa0.000% Due 01-15-27U.S. Treasury SLGS s35347910 27,393,548 100.00 27,393,548.00 AA+ Aaa0.000% Due 01-15-27U.S. Treasury SLGS s35348080 10,206,673 100.00 10,206,673.00 AA+ Aaa0.000% Due 01-15-27TREASURY SLGS Total 155,556,591.00

TREASURY NOTESU.S. TREASURY NOTE 912828NZ9 200,000 100.59 201,181.16 AA+ Aaa1.250% Due 09-30-15TREASURY NOTES Total 201,181.16

FHLB BONDFEDERAL HOME LN BKS 3130A0C65 3,200,000 99.95 3,198,547.78 AA+ Aaa0.625% Due 12-28-16FEDERAL HOME LOAN BANK BOND

3130a1qx9 1,000,000 100.00 1,000,000.00 AA+ Aaa

0.090% Due 01-20-15FHLB BOND Total 4,198,547.78

FHLB DISCOUNT NOTEFederal Home Loan Bank Discount Note

313384ap4 13,400,000 100.00 13,399,750.83 AA+ Aaa

0.050% Due 01-14-15FHLB DISCOUNT NOTE Total 13,399,750.83

1

Exhibit 6

Transportation Corridor AgenciesFIXED INCOME HOLDINGS - SETTLED TRADES

San Joaquin Hills Transporation Corridor AgencyDecember 31, 2014

Date/PriceAdj.Unit Adjusted

Description Symbol Par Value Cost Total Cost S&P Moody Call Put

FNMA BONDFEDERAL NATL MTG ASSN 3135G0SB0 11,940,000 100.00 11,940,266.95 AA+ Aaa0.375% Due 12-21-15FEDERAL NATL MTG ASSN 3135g0va8 1,900,000 99.98 1,899,641.97 AA+ Aaa0.500% Due 03-30-16FNMA BOND Total 13,839,908.93

AGENCY BONDFARMER MAC NOTE 31315pj42 700,000 99.95 699,668.96 NR NR0.600% Due 06-27-16AGENCY BOND Total 699,668.96

MUNICIPAL BONDSBAY AREA TOLL AUTH CALIF TOLL

072024de9 2,000,000 105.70 2,114,059.33 AA Aa3 04-01-16

5.000% Due 04-01-16 100.00INDIANA ST FIN AUTH REV 4550574M8 1,700,000 100.20 1,703,362.67 AA+ AA10.750% Due 07-01-15MISSOURI STATE GENERAL OBLIGATION BOND

606301MG1 9,000,000 102.73 9,245,514.25 AAA Aaa

4.000% Due 10-01-15OHIO STATE GENERAL OBLIGATION BOND

677521ga8 4,000,000 100.47 4,018,652.02 AAA Aa1

1.970% Due 05-01-15UNIVERSITY CALIF REVENUE BOND

91412GPX7 1,000,000 100.22 1,002,203.39 AA Aa2

0.659% Due 05-15-16MUNICIPAL BONDS Total 18,083,791.66

GRAND TOTAL 253,727,089.30

2

Exhibit 6

Note 1

Note 1: The issuer is a U.S. Government Sponsored Agency. Security, which is unrated, is an authorized investment per the investment policy.

Exhibit 7

INVESTMENT DEFINITIONS

Historical Cost The original price paid for the investment.

Adjusted Cost Historical cost adjusted for the cumulative amortization of premium/discount recorded to date.

Market Value An approximation of the current trading price. The Agency obtains such data from a pricing service bureau.

Par The face value of a security which represents the amount to be paid by the issuer at maturity.

Premium The amount above the par value which is paid to purchase a security that has a coupon rate higher than the current market rate.

Discount The amount which is deducted from the par value when purchasing a security that has a coupon rate lower than the current market value.

Basis Point Unit of interest rates or yields expressed as a percentage. One hundred basis points equal one percent.

Coupon Rate The annual interest rate that a debt issuer promises to pay an investor.

Maturity Date The date on which the principal or last principal payment on a debt is due and payable.

Yield The internal rate of return on an investment. Yield encompasses the following factors: historical cost, coupon rate, interest payments and their reinvestment and maturity date.

Yield to Maturity-Cost (YTM-C) The rate of return yielded by a debt security held to maturity when both interest payments and the premium or discount paid by the investor are taken into account.

Yield to Maturity-Market (YTM-M) Same as above, except the current market price is substituted for historical cost. This rate fluctuates with the market where the YTM-Cost remains constant for each individual investment.

Fixed Income Security A debt instrument with a fixed or variable interest component and a

maturity date. Money Market Security A short-term debt instrument such as a treasury bill or commercial

paper. Interest Rate (or Market) Risk The risk that the market value of the portfolio will rise or fall when

interest rates fluctuate. When interest rates rise, bond prices fall. The longer the maturity of the bond and the lower the coupon rate, the greater the vulnerability to a change in interest rates.

Credit Risk Reflects the possibility that the issuer will not make promised interest

and principal payments on time or in full. Treasury securities are considered to have no credit risk.

Reinvestment Risk When interest rates fall, so do the rates at which bond interest

payments can be reinvested. This reduces realized yields, since the bondholder will earn less “interest on interest.” Zero-coupon bonds do not make periodic interest payments, and as such, are not subject to reinvestment risk.

Call Risk This reflects the danger that a bond might be called or redeemed

during a period of declining interest rates. When high-yielding investments are called during periods of declining interest rates, investors must then reinvest the proceeds in obligations that have lower yields. Fund managers can reduce this risk by holding issues with longer periods of call protection.

Liquidity Risk Esoteric securities and other thinly traded securities carry the danger of

not being easily or quickly sold. This means that the fund manager may have to accept a sub-optimal bid for securities if a competitive market does not exist and the manager must liquidate the position on short notice.

Event Risk This reflects the chance that a leveraged buyout, takeover, or other

recapitalization would materially weaken the claims of existing bondholders, sometimes to the benefit of stockholders. A classic example was the buyout of RJR Nabisco. The company’s bond prices declined after its creditworthiness was downgraded to reflect a higher debt load.


DATE: February 12, 2015 TO: Foothill/Eastern Transportation Corridor Agency Board of Directors San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Eileen Harrigan, Director, Contracts and Procurement SUBJECT: Quarterly Procurement Report STAFF RECOMMENDATION:

Foothill/Eastern Transportation Corridor Agency Recommendation: Receive and File San Joaquin Hills Transportation Corridor Agency Recommendation: Receive and File BACKGROUND: The Foothill/Eastern Transportation Corridor Agency (F/ETCA) and San Joaquin Hills Transportation Corridor Agency (SJHTCA) contract with various consultants, contractors and vendors for the purchase and provision of various goods and services for the continued development and operation of The Toll Roads. The Contracts and Procurement Services Policy and Procedures Manual (CAPS Manual) provides for the execution or extension of certain contracts by the chief executive officer (CEO) without further Board action. The Joint Procurement Ad Hoc Committee reviewed the agencies’ policies and procedures and recommended staff provide an expanded report of the procurement activities. The Boards of Directors approved revisions to the CAPS Manual in June 2014, including a requirement for a quarterly report of all procurement activity. DISCUSSION: The CAPS Manual, as revised in June 2014, requires the submission of a quarterly report to the Boards of Directors, identifying all requisitions for the expenditure of funds greater than $2,500. The agencies utilize an electronic reporting and approval system as part of our overall financial

Quarterly Procurement Report File No. 2015J-004 February 12, 2015 Page 2 software system. Information for requisitions is entered in one of two modules, either the contract management module or the purchase order module for electronic approval. In both cases, requests and documents are approved per the Board adopted delegation of authority contained in the CAPS Manual. Attached are reports that provide a recap of the requisitions approved in the past quarter, beginning October 1, 2014 through December 31, 2014. The attached reports identify the agency with financial responsibility for the action as either, FE for the Foothill/Eastern Transportation Corridor Agency, SJ for the San Joaquin Hills Transportation Agency or JNT for those actions that involve both agencies. Separate columns are provided to identify the financial commitment of each agency for each action. Authorizations for each action are also identified. All actions are approved based on the delegation of authority identified in the CAPS Manual. ATTACHMENTS:

1 Quarterly Procurement Report Activity Summary

Reflects activity of both agencies and identifies the number and value of actions taken by department and by approval type.

2 New Contracts Approved Identifies new contracts authorized and processed through the contract management module.

3 Amendments Approved Identifies all approved amendments or change orders to existing contracts, also processed through the contract management module.

4 Purchase Requisitions Approved Lists the requisitions processed and approved through the purchase order module. These may include small agreements, purchase orders or other payment requests not involving any contract.

BUDGET: All requisitions authorized have been within the agencies’ approved annual budgets or appropriate budget transfers have been executed per Board approved policy. CONCLUSION: Per the procedures identified in the CAPS Manual, adopted by the Boards of Directors in 2014, staff is providing a quarterly report of procurement activity for the 2nd quarter of fiscal year 2015. The attachments to this report identify all requisitions and contract actions authorized between October 1st and December 31st, 2014.

Quarterly Procurement ReportActivity SummaryFY15 2nd Quarter

File No. 2015J-004Attachment 1

Page 1 of 1

AuthorizationType Board Authorized CEO Authorized ETM Authorized Routine Business Expense

Total Requisitions

Issued

% by Dept

Total Value of Requisitions

Issued

% by Dept

Department # Issued Value # Issued Value # Issued Value # Issued ValueAdministration/Human Resources(ADM/HR) 1 3,200.00$ 1 4,087.59$ 2 3.4% 7,287.59$ 0.1%

Information Technology (IT) 3 12,169.00$ 1 15,761.00$ 4 6.9% 27,930.00$ 0.5%Finance (FIN) 3 1,140,000.00$ 3 5.2% 1,140,000.00$ 19.4%Communications & Public Affairs (PA) 5 32,389.31$ 5 8.6% 32,389.31$ 0.6%Engineering/ROW (EGR/ROW) 2 42,085.60$ 1 1,800.00$ 3 5.2% 43,885.60$ 0.7%Environmental (ENV) 4 4,049,709.49$ 1 9,900.00$ 3 -$ 8 13.8% 4,059,609.49$ 69.0%Contracts & Procurement (CPD) 1 98,221.00$ 1 1,642.46$ 2 3.4% 99,863.46$ 1.7%Facilities (Fac) 1 116,505.00$ 1 3,836.80$ 9 84,833.72$ 11 19.0% 205,175.52$ 3.5%Toll Operations (Toll Ops) 2 162.00$ 2 6,247.81$ 5 50,232.98$ 11 212,780.15$ 20 34.5% 269,422.94$ 4.6%

14 5,449,883.09$ 3 16,147.81$ 16 104,358.14$ 25 315,174.87$ 58 5,885,563.91$ % by Authorization Type 24.1% 92.6% 5.2% 0.3% 27.6% 1.8% 43.1% 5.4%

Definition of Authorization CategoriesBoard Authorized (BRD) Requisitions that are approved based on an action by a Board, including those funded from contingency authorizations or within existing authorized value. CEO Authorized (CEO)ETM Authorized (ETM) Requisitions under CEO authority, <= $10,000 per Agency, as delegated to ETMs.Routine Business Expense (RBE) Requisitions for goods or services <= $100,000 per Agency and <= 12 month term (per CAPS Manual).

Requisitions of <= $25,000 per Agency, with a unique scope of work (per CAPS Manual).

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Board CEO ETM RBE

24.1%

5.2%

27.6% 43.1%

92.6%

0.3% 1.8% 5.4%

FY15 - 4th Quarter Procurement Activity

# Value

New Contracts Approved


Page 1 of 2

Agency ContractNo. Vendor Name Contract Title Approval

TypeDate

Approved Dept F/ETCAValue

SJHTCAValue Total Value Contract

End Date Notes

JNT K000957CHANDLER ASSET MANAGEMENT INCORPORATED

INVESTMENT ADVISOR SERVICES BRD 12/23/14 Finance 792,000.00$ 198,000.00$ 990,000.00$ 12/31/2017

Consultant to assist with invesment services to optimize income under a three year contract term, with three one-year options. The Boards approved a combined, $330,000 per year authorization, including the three one-year option terms. Authorization is entered at the F15 80/20 split and will be monitored and adjusted for actual expenses within authorized annual value. Qualification based selection from 4 proposals received.

JNT K000964 PLANETBIDS INCORPORATED

E-PROCUREMENT SOFTWARE SYSTEM BRD 11/14/14 Contracts and

Procurement 66,790.28$ 31,430.72$ 98,221.00$ 1/31/2020E-procurement services including a vendor management system. Five year term with three optional one-year terms. Best value based selection from 6 proposals received.

FE K000971 EAGLE AERIALIMAGING

2014 DIGITAL AERIAL PHOTOGRAPH OF ORANGE COUNTY

BRD 10/16/2014 Engineering 37,927.60$ -$ 37,927.60$ 10/30/2014

Vendor to provide 2014 aerial photography of Orange County. Vendor is only company able to provide an "off-the-shelf" aerial image of OC at the required 3-inch pixel resolution.

JNT K000974 WARE DISPOSAL INCORPORATED

WASTE DISPOSAL SERVICES RBE 11/13/14 Facilities 4,825.80$ 492.00$ 5,317.80$ 11/30/2015

Bin rental and waste disposal services for the Pacifica building Mon-Fri and F/ETC and SJHTC toll plazas Thursdays once/twice per month. Competitive procurement

FE K000975 ARNOLD I SHERWOOD CONSULTING SUPPORT SERVICES CEO 10/7/14 Environmental 9,900.00$ -$ 9,900.00$ 6/30/2015

Consultant will assist the Agency in advancing the 241 Toll Road & other related projects. Consultant selected based on specialized expertise in the field of federal requirements FTIP, RTP and Clean Air Act. Consultant previously provided similar services in an amount NTE $9,900.

JNT K000976

DEVELOPMENT DIMENSIONS INTERNATIONAL INCORPORATED

LEADERSHIP DEVELOPMENT TRAINING BRD 12/30/14 Administration 2,272.00$ 928.00$ 3,200.00$ 11/16/2017

Consultant to work with agency staff to develop a plan for future work relating to a leadership development plan. The Boards authorized a total of $50,000, however, the initial work is for a planning session only at a cost of $3,200 plus expenses. Informal procurement process identified consultant as most qualified and best value.

JNT K000977 PAYNEAR ME INCORPORATED

MUTUAL NONDISCLOSURE AGREEMENT CEO 11/3/14 Operations -$ -$ -$ 6/30/2040 Agreement enables the agencies to explore opportunites for

more cash payment sites throughout southern California.

JNT K000978 ULTIMATE STAFFING SERVICES

TEMPORARY HELP - CUSTOMER SERVICE REPRESENTATIVES

RBE 11/12/14 Operations 42,210.00$ 20,790.00$ 63,000.00$ 6/30/2015

Contract with temporary agency for employees to support efforts related to transitional All-Electronic Tolling customer service center and violation enforcement services expenses. Firm selected based on ability to provide qualified personnel at a competitive price.

JNT K000981CREATIVE BREAKTHROUGHS INCORPORATED

SYMANTEC BACKUP EXEC FOR T-CORE SERVERS ETM 11/14/14 Operations 1,073.00$ 504.94$ 1,577.94$ 11/6/2015 Symantec Backup Exec support for TransCore servers.

Selection was the result of a competitive request for quotes.

JNT K000982 MANERI SIGN COMPANY

"5 DAYS" OVERLAYS FOR AET SIGNS CEO 11/13/14 Engineering /

Operations 4,526.83$ 1,720.98$ 6,247.81$ 1/6/2015Vendor to provide sign overlays. Selection was based on familiarity with agencies' needs, ability to provide product within the required timeframe and a reasonable price.

JNT K000985PERISCOPE HOLDINGS INCORPORATED

NIGP CODE LICENSE AGREEMENT ETM 11/24/14 Contracts and

Procurement 1,116.87$ 525.59$ 1,642.46$ 11/30/2015

3 year license agreement for use of National Institue of Governmental Purchasing (NIGP) Codes in connection with electronic procurement system. Vendor is only provider of this service.

FE K000986 FEHR AND PEERS TRAFFIC MODELING AND TECHNICAL ASSISTANCE BRD 12/17/14 Environmental 75,000.00$ -$ 75,000.00$ 1/1/1000

Consultant to provide potential transportation scenarios that address the future mobility needs of South Orange County (SOC). Firm was selected based on specialization of services along with experience and expertise.

FE K000987 STRADLING YOCCA CARLSON RAUTH

BOND AND TAX COUNSEL SERVICES BRD 12/23/14 Finance 65,000.00$ -$ 65,000.00$ 12/31/2015

Consultant will insure bonds are issued in compliance with all applicable laws and procedures and will prepare the indenture of trust documents and issue a legal opinion that the bonds qualify for tax exemptions. Fee is 100% contingent upon bond issuance. Firm currently provides similar service on other bond issues for the agency.

New Contracts Approved


Page 2 of 2

Agency ContractNo. Vendor Name Contract Title Approval

TypeDate


SJHTCAValue Total Value Contract

End Date Notes

FE K000988 PUBLIC FINANCIAL MANAGEMENT

FINANCIAL ADVISORY SERVICES BRD 12/23/14 Finance 85,000.00$ -$ 85,000.00$ 12/31/2015

Financial Advisory Services related to the restructuring of outstanding 1995A Toll Revenue Bonds. Fee of $75,000.00 is contingent on bond issuance. Expenses will be paid up to $10,000. Firm was selected based on experience and expertise and has provided similar services on other bond issuances.

JNT K000989 DATASKILL INCORPORATED

IBM WEBSPHERE, DB2 AND RATIONAL LICENSE RENEWAL

RBE 12/22/14 Operations 10,717.48$ 5,043.52$ 15,761.00$ 12/31/2015Renewal of support for 3M operated IBM DB2, Rational and Websphere licenses. Selection was the result of an informal IFB. Selected firm is the lowest price of the 3 bids received.

$ 1,198,359.86 $ 259,435.75 $ 1,457,795.61

Amendments Approved


Page 1 of 3

Agency ContractNo. Vendor Name Contract Title Document

Approved Approval

TypeDate


SJHTCAValue

TotalValue

ContractEnd Date Notes

JNT K000784 PJL ENTERPRISE GROUP

AS-NEEDED PRINTING SERVICES 20 RBE 10/3/2014 Operations 5,065.47$ 1,873.53$ 6,939.00$ 6/30/2015

Purchase of the Toll Roads custom bubble mailer envelopes. Multiple firms were selected under a competitive procurement for these services in June 2012. When service is required a request for quote is submitted to all firms and selected based on cost and ability to meet delivery requirements.

FE K000943CASTILLO PRIVATE PATROL INCORPORATED

PATROL OF UPPER CHIQUITA CANYON CONSERVATION AREA

-1 RBE 10/27/2014 Environmental -$ -$ -$ 4/30/2015Amendment was recorded for approval of an Assignment and Assumption Agreement from Castillo to RMI International. No other terms or conditions were modified.

FE K000886 SUNSET PROPERTY SERVICES

PACIFICA PARKING LOT SWEEPING 1 RBE 10/27/2014 Facilities 1,968.00$ -$ 1,968.00$ 10/31/2015 Exercising the first one-year option and authorize funds for

year of service. Competitively procured September 2013.

FE K000825 TERRA PACIFIC LANDSCAPE

PACIFICA LANDSCAPE SERVICES 9 RBE 10/27/2014 Facilities 787.00$ -$ 787.00$ 1/31/2015

This amendment adds funds for extra work to replace plants in pots. All other terms and conditions of the contract remain the same. Originally procured in January 2013.

JNT K000101 NETFACILITIES INCORPORATED

FACILITIES TRACKING SOFTWARE 11 RBE 10/27/2014 Facilities 1,734.00$ 816.00$ 2,550.00$ 10/31/2015

Add funding and extend term one year for facilities management tracking software licenses for three sites. Software has been used since November 2003. Annual cost is currently less than initial annual price.



Purchase of 100,000 Toll Roads custom bubble mailer envelopes. Multiple firms were selected under a competitive procurement for these services in June 2012. When service is required a request for quote is submitted to all firms and selected based on cost and ability to meet delivery requirements.

JNT K000946 LSA ASSOCIATES INCORPORATED

IN-HOUSE ENVIRONMENTAL TECHNICAL SUPPORT

1 BRD 10/28/2014 Environmental 4,794.00$ (4,794.00)$ -$ 6/30/2017Amendment adds staff from consultant available for services and adjusts NTE contract values by agency based on estimated work efforts.


AS-NEEDED PRINTING SERVICES 22 RBE 10/29/2014 Operations 118.26$ 43.74$ 162.00$ 6/30/2015

Purchase of the Toll Roads integrated label sheets. Multiple firms were selected under a competitive procurement for these services in June 2012. When service is required a request for quote is submitted to all firms and selected based on cost and ability to meet delivery requirements.

FE K000748FC AND SONS ROOFING INCORPORATED

ANNUAL ROOF MAINTENANCE-PACIFICA 3 RBE 11/3/2014 Facilities 3,200.00$ -$ 3,200.00$ 11/27/2015

Extend contract for one year and add new funds to inspect, clean and wash Pacifica roof system in preparation for winter season, identify any deficiencies and report for warranty repairs. Contract was initially established in November 2011. Vendor is the successfull bidder under a competitive procurement for new roof installation and responsible for warranty issues.

JNT K000733 WARE DISPOSAL INCORPORATED

TRASH DISPOSAL AND BIN RENTAL 9 RBE 11/4/2014 Facilities 254.62$ 19.72$ 274.34$ 11/30/2014 Additional funding required for services through the end of the

contract. Services have been re-procured.

JNT K000493 DATA TICKET INCORPORATED

ELECTRONIC OUT-OF-STATE REGISTERED OWNER INFORMATI

9 RBE 11/6/2014 Operations 21,699.98$ 13,300.02$ 35,000.00$ 6/30/2015

Additional funding for DMV services for increased usage due to the AET conversion. Vendor identified in 2009 as the only local provider of these services. Services have been integrated in to the current customer service and violation processing software.

FE K000818 IDS GROUP INCORPORATED

PACIFICA BUILDING HVAC ENGINEERING CONSULTANT

2 BRD 11/14/2014 Facilities 116,505.00$ -$ 116,505.00$ 6/30/2015Extend term and add new funds to complete Task No. 2 project design development for the HVAC modernization project.

JNT K000761BLACKSTONE CALLING CARDS INCORPORATED

MONEY SERVICES BUSINESS 3 BRD 11/14/2014 Operations -$ -$ -$ 8/9/2017

Amend contract enabling use of the FasTrak trademark and service marks in connection with the Services. No other changes to contract terms or conditions.

FE K000869 CROWN FENCE COMPANY

SR 241 FENCE IMPROVEMENT PROJECT 3 BRD 11/17/2014 Environmental 3,974,709.49$ -$ 3,974,709.49$ 6/30/2015 Authorizes Phase 2 of the fence project expanding to

segments 1b and 2.

JNT K000044 JOHNSON CONTROLS ON ROAD CARDKEY ANNUAL MAINTENANCE 22 RBE 11/19/2014 Facilities 2,819.75$ 1,388.83$ 4,208.58$ 11/30/2015

Annual maintenance services for proprietary cardkey system. Vendor is only authorized provider of service for system. Services began in 2000.

Amendments Approved


Page 2 of 3


Approved Approval

TypeDate


SJHTCAValue

TotalValue



AS-NEEDED PRINTING SERVICES 23 RBE 11/19/2014 Operations 1,498.35$ 554.19$ 2,052.54$ 6/30/2015

Purchase of 1,500 Toll Roads 16 page transponder mounting instruction booklets. Multiple firms were selected under a competitive procurement for these services in June 2012. When service is required a request for quote is submitted to all firms and selected based on cost and ability to meet delivery requirements.

JNT K000910 FASTENING SYSTEMS VELCRO BRAND HOOK AND LOOP FASTENERS 1 RBE 11/20/2014 Operations 32,772.30$ 12,121.26$ 44,893.56$ 11/30/2015

Extend contract for the first one-year option and add funds for purchase of Velcro fasteners for the transponders. Vendor selected through competitive procurement in December 2013.

JNT K000802 ORTIZ ENTERPRISES INCORPORATED

AET CONVERSION - CIVIL CONSTRUCTION 5 BRD 11/20/2014 Engineering 4,158.00$ -$ 4,158.00$ 12/1/2014 Adds FE toll plaza signs to the project scope and incorporates

funding.



Purchase of 300,000 Toll Roads 24# Seville white wove window #10 patron envelopes. Multiple firms were selected under a competitive procurement for these services in June 2012. When service is required a request for quote is submitted to all firms and selected based on cost and ability to meet delivery requirements.

FE K000174 DFS FLOORING PERIODIC CARPET CLEANING - PACIFICA 10 RBE 12/8/2014 Facilities 1,500.00$ -$ 1,500.00$ 2/28/2015

Increases funding for cleaning services on an as-needed basis. Original contract established in March 2006. Vendor uses a proprietary cleaning solution recommended by the carpet manufacturer.

JNT K000526PACIFIC RESTORATION GROUP INCORPORATED

TOLL PLAZA LANDSCAPE 10 RBE 12/8/2014 Facilities 40,392.00$ 24,636.00$ 65,028.00$ 12/31/2015

Contract extension and annual funding. No change in rates for the new year. Contract was initially awarded in December 2009 as the result of a competitive bid process. Service has been extended through the AET transition due to uncertainty of future scope.

JNT K000591TECHNOLOGY UNLIMITED INCORPORATED

MAINTENANCE ON CANON CR-180 CHECK SCANNER 5 RBE 12/15/2014 Operations 292.00$ 108.00$ 400.00$ 12/31/2015

Term extension and annual funding. The machine has been owned since 2008. Service has been provided by the vendor since 2010.

FE K000346NAKAE AND ASSOCIATES INCORPORATED

LIVE OAK PLAZA MAINTENANCE 9 RBE 12/15/2014 Environmental -$ -$ -$ 6/30/2015

Amendment authorized fuel modification work to be completed by 6/30/2015 within existing contract value. Vendor was initially hired for installation of temporary irrigation and control of invasive plants based on their intimate familiarity with the project site. Vendor has continued on a maintenance only basis.


CSS MITIGATION SITE MAINTENANCE 22 BRD 12/15/2014 Environmental -$ -$ -$ 12/31/2016 Amendment authorized fuel modification maintenance work

within existing contract value.



Purchase 300,000 Toll Roads patron letterhead. Multiple firms were selected under a competitive procurement for these services in June 2012. When service is required a request for quote is submitted to all firms and selected based on cost and ability to meet delivery requirements.


CHIQUITA CANYON CONSERVATION MAINTENANCE

34 RBE 12/15/2014 Environmental -$ -$ -$ 6/30/2015

Amendment authorized weed abatement work to be completed by 6/30/2015 within existing contract value. Vendor was initially selected through a qualification based competitive procurement in 1996 for management of the conservation area. With transition to maintenance only services vendor has continued service under a routine business authorization.

JNT K000100TECHNOLOGY UNLIMITED INCORPORATED

AQURACY SOFTWARE LICENSE 9 RBE 12/16/2014 Operations 1,812.54$ 852.96$ 2,665.50$ 12/31/2015

Software license for 3M customer service and violation processing. Vendor is only approved re-seller of the software. Software was initially implemented in 2003.

JNT K000196

CORELOGIC INFORMATION SOLUTIONS INCORPORATED

ANNUAL SUBSCRIPTION - REALQUEST -2 RBE 12/17/2014 Right of Way 1,692.00$ 108.00$ 1,800.00$ 12/31/2015

Action extends and funds services for one year with no change to pricing for real estate information database access. Subscription service selected in December 2004.

Amendments Approved


Page 3 of 3


Approved Approval

TypeDate


SJHTCAValue

TotalValue




Purchase 50,000 Toll Roads 6x9" custom tyvek envelopes. Multiple firms were selected under a competitive procurement for these services in June 2012. When service is required a request for quote is submitted to all firms and selected based on cost and ability to meet delivery requirements.

$ 4,259,988.33 $ 66,642.23 $ 4,326,630.56

Purchase Requisitions Approved


Page 1 of 1

Agency PO No. Vendor Name ApprovalType

DateApproved Dept F/ETCA

Value SJHTCA

Value TotalValue Notes

JT P000567 RICOH USA INC. AE 10/14/2014 Information Technology 3,784.30$ 1,545.70$ 5,330.00$ Document control scanner software upgrade and annual

support

JT P000568 RAPID7 LLC AE 10/29/2014 Information Technology 2,768.40$ 1,076.60$ 3,845.00$

Nexpose console appliance for PCI compliance scanning. Hardware is unique to existing software and only available from one source.

JT P000569 BLUE RIBBON TROPHY AE 11/3/2014 Communications & Public Affairs 1,638.40$ 1,092.27$ 2,730.67$ Recognition plaques for outgoing board members.

SJ P000570CROSSTOWN ELECTRICAL AND DATA INCORPORATED

AE 11/4/2014 Engineering /Operations -$ 6,900.00$ 6,900.00$ Fiber optic cable repair due to inadvertent cut by sign

installation.

FE P000571SOUTH ORANGE COUNTY ECONOMIC COALITION

AC 11/5/2014 Communications & Public Affairs 18,000.00$ -$ 18,000.00$ Payment to the South Orange County Economic Coalition

for the renewal of the annual membership 10/1/14 - 9/30/15.

JT P000572LEE BROTHERS TRUCK BODY INCORPORATED

AE 11/14/2014 2,800.86$ 1,035.94$ 3,836.80$ Deposit (50%) for truck modifications including installation of lift gate.

JT P000573

INTERNATIONAL BRIDGE TUNNEL TURNPIKE ASSOCIATION

AC 11/26/2014 Administration 2,130.00$ 870.00$ 3,000.00$ 2015 IBTTA Foundation Leadership Academy tuition fee for Lisa Telles.

JT P000574

INTERNATIONAL BRIDGE TUNNEL TURNPIKE ASSOCIATION

AC 12/1/2014 16,752.91$ 16,434.09$ 33,187.00$ Active member annual dues.

JT P000575

GOVERNMENT TECHNOLOGY SOLUTIONS INCORPORATED

AE 12/8/2014 Information Technology 2,155.68$ 838.32$ 2,994.00$ Trend Micro annual renewal of enterprise security suite.

Includes maintenance and 24 x 7 support for 1 year.

JT P000576SOIREE EVENT PLANNING AND CATERING

EA 12/10/2014 Administration 2,902.19$ 1,185.40$ 4,087.59$ Holiday luncheon for TCA employees.

JT P000577 WINTERBORNE INCORPORATED AE 12/15/2014 Operations 5,057.47$ 1,870.57$ 6,928.04$ Replacement of display cards at the 14 Costco stores.

Replacement is needed due to age and wear.

JT P000578 RICOH USA INC. AE 12/16/2014 Operations 1,115.20$ 524.80$ 1,640.00$ Upgrade to existing scanner with software upgrade on server.

JT P000579 ICONTACT LLC AE 12/17/2014 Communications & Public Affairs 3,703.24$ 1,823.98$ 5,527.22$ November payment and annual subscription for marketing

email services.

JT P000580 ADVENTURES IN ADVERTISING AE 12/23/2014 Communications

& Public Affairs 2,098.05$ 1,033.37$ 3,131.42$

Promotional items in support of TCA's marketing outreach efforts. These items are given away at sponsorship events, Lunch and Learn Events, via TCA's Donation Program and other outreach events.

$ 64,906.70 $ 36,231.04 $ 101,137.74


DATE: January 8, 2015 TO: Foothill Eastern Transportation Corridor Agency Board of Directors San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Howard Mallen, Director of Finance SUBJECT: Current Insurance Coverage STAFF RECOMMENDATION: Receive and file. BACKGROUND: The Foothill/Eastern Transportation Corridor Agency (F/ETCA) and the San Joaquin Hills Transportation Corridor Agency (SJHTCA) bind numerous insurance policies annually. This report summarizes the current coverage and related costs. Indenture Requirements The Master Indentures of Trust (the Indentures) require the agencies to maintain insurance programs that will afford adequate insurance protection against loss caused by damage to, or destruction of, the pledged facilities owned by the agencies including toll facilities and equipment. The agencies are also required by the Indentures to obtain comprehensive liability insurance for bodily injury and property damage related to the pledged facilities owned. Alliant Contract In an effort to maintain high quality insurance broker services at a fixed price, TCA staff conducted a request for proposal for its insurance broker services in 2013. Selected through a competitive process and approved by the Boards of Directors in February 2014, a three-year contract was re-awarded to Alliant Insurance Services, Inc. (Alliant) with three one-year options. The price of the Alliant contract is $140,000 for the first year with an increase of $2,500 each subsequent year.

Current Insurance Coverage File No.2015J-002 January 8, 2015 Page 2 of 3 Process The agencies bind insurance policies to meet the above Indenture requirements through Alliant, which provides all of the agencies’ insurance procurement needs. During each policy’s annual renewal period, Alliant provides applications for verification and completion. Once the completed information is received by Alliant, they initiate contact with numerous insurance carriers to discuss the agencies and their unique exposures. Specifications and renewal information is then submitted to insurance carriers for consideration and quotations. Once insurance quotations are received by Alliant, a proposal is created. The proposal typically includes a “side by side” coverage comparison, benchmarking statistics compiled by Alliant on other public agencies, along with Alliant’s recommendation as to which option they recommend and why. In addition, Alliant includes a marketing report which outlines the various insurance carriers that were contacted and their response. The agencies’ staff and Alliant then review the proposal and address insured values, limits and deductibles in order to obtain the most cost effective policies. To ensure transparency in insurance fees, the fixed price contract with Alliant requires rebating of commissions back to the agencies for all insurance policies. Terrorism Coverage TCA maintains terrorism coverage of $300,000,000 per occurrence ($800,000,000 program aggregate) in the Public Entity Property Insurance Program (PEPIP), which covers property and business interruption due to risks such as fire. In FY04, the Boards decided to forego additional terrorism insurance coverage due to the high cost of the limited coverage offered. Staff was directed to return to the Board of Directors if changes in risk, coverage or cost warranted a review of terrorism insurance. As there have been no significant improvements in either the cost or coverage related to terrorism insurance offered to the agencies, additional coverage continues to be waived. DISCUSSION: Summary of Current Coverage Attachment A is a summary of each of the agencies’ insurance policies including coverages, related insurance companies, terms, limits, deductibles and premiums with a comparison to the prior year. Several of the policies are bound for the F/ETCA and SJHTCA combined, including the Public Entity Property Insurance Program (PEPIP) and Difference in Conditions (DIC) policies, which covers earthquake, flood and business interruption for the toll facilities. The cost of these policies is allocated between the agencies based on the values for each agency that are

Current Insurance Coverage File No.2015J-002 January 8, 2015 Page 3 of 3 covered under the policies. The total annual insurance premiums for the F/ETCA and the SJHTCA under all the current policies, including insurance broker fees paid directly to Alliant, are $944,352 and $685,409, respectively. The agencies’ Difference in Condition-Real Property policy was the singular policy with a premium increase (approximately $160,000) due primarily to the revaluation of the agencies’ physical assets and the rise in the Caltrans Construction index, which is used to value the agencies’ large capital assets. The SJHTCA’s $10 million Use and Occupancy policy was required in the past per the 1997 indenture, but is no longer required by the 2014 indenture, thereby reducing insurance premiums by over $180,000. For further details please refer to Attachment A. BUDGET: Policies renew on different dates throughout the year, and estimates of the FY15 premiums, based on current actuals and anticipated volatility in the insurance market, are included in the FY15 budgets. Both agencies are under the budgeted amounts for insurance. CONCLUSION: The F/ETCA and the SJHTCA bind numerous insurance policies annually. This report provides a summary of the current coverage and related costs.

Attachment A - 2014-15 Insurance Summary

FY14 FY15 $ %

1

Public Entity Property Insurance Program (PEPIP) (Joint Purchase Program): All risk coverage (excluding earthquake and flood which is covered under the DIC policy) for real and personal property and 6 months of business interruption for both agencies

Various Carriers 7/1/14 - 7/1/15

FE Real Property $36,259,400

Personal Property- $9,063,441Fiber optic cables - $16,759,961

Business Interruption - $70,715,717Total - $132,798,519

SJH

Real Property - $16,289,100 Personal Property - $2,752,359Fiber optic cables - $7,737,023

Business Interruption - $66,806,629 Total - $93,585,110

$1 billion per occurrence loss limit (applies to all PEPIP members as a whole),

excluding vehicle, earthquake and flood. $100,000 all risk deductible, except

$400,000 for catastrophic losses.

$ 210,697 $ 197,457 $ (13,240) -6.3% Premium has decreased due to a reduction in insurable values and to favorable loss history.

2Boiler and Machinery (Joint Purchase Program): Comprehensive coverage for production machinery for both agencies.

Various Carriers 7/1/14 - 7/1/15$100 million limit. Deductibles vary based on size of equipment, subject to a minimum

of $5,000, 24-hour business interruptionSee above

3

Special Liability Insurance Program (SLIP): Liability coverage for bodily injury and property damage, errors and omissions, auto/non-owned auto and employment practices for F/ETCA

Associated Industries Insurance Company 9/29/14 - 9/29/15 N/A

$10 million general liability limit (including E&O), $1 million uninsured motorist coverage and $2 million employment

practices liability limit per occurrence and annual aggregate where applicable.

$25,000 Self Insured Retention (SIR) with exception of employment practices liability

coverage which carries a $10,000 deductible

$ 173,624 $ 173,260 $ (364) -0.2% Minor change in premium

4

Special Liability Insurance Program (SLIP): Liability coverage for bodily injury and property damage, errors and omissions, auto/non-owned auto and employment practices for SJHTCA

Associated Industries Insurance Company 9/29/14 - 9/29/15 N/A

$10 million general liability limit (including E&O), $1 million uninsured motorist coverage and $2 million employment

practices liability limit per occurrence and annual aggregate where applicable.

$25,000 Self Insured Retention (SIR) with exception of employment practices liability

coverage which carries a $10,000 deductible

$ 142,207 $ 141,909 $ (298) -0.2% Minor change in premium

5Crime Program: Crime coverage for F/ETCA

National Union Fire Insurance Company 7/1/14 - 7/1/15 N/A Limit - $5,000,000 Deductible - $2,500 2,354$ $ 2,354 $ - 0.0% No change in premium

6Crime Program: Crime coverage for SJHTCA

National Union Fire Insurance Company 7/1/14 - 7/1/15 N/A Limit - $5,000,000 Deductible - $2,500 2,354$ $ 2,354 $ - 0.0% No change in premium

7

Public Entity Physical Damage Program: All risk coverage (including earthquake and flood) for auto physical damage for both agencies

AGCS Marine Insurance Services,

Inc.7/1/14 - 7/1/15 Vehicles - $348,641 $348,641 limit of liability. $1,000 vehicle

damage deductible. $ 3,860 $ 2,118 $ (1,742) -45.1%Premium has decreased primarily due to heavy

marketing of the program and the continued depreciation of vehicles.

8Accidental Death & Dismemberment (AD&D): For both agencies (while traveling on business)

Hartford Life and Accident Insurance

Company7/21/14 - 7/21/15 N/A $750K limit per loss. $5 million aggregate

limit. No deductible. $ 1,581 $ 1,581 $ - 0.0% No change in premium

Change in Premium

Included in PEPIP Premium Above

Explanation - FY14 vs. FY15 premium changeName of Policy and Type of Coverage Insurance Company Current Policy Term Total Insurable Values (TIV) Limits & Deductibles

PREMIUMS PAID

Attachment A - 2014-15 Insurance Summary

FY14 FY15 $ %Change in Premium Explanation - FY14 vs. FY15 premium

changeName of Policy and Type of Coverage Insurance Company Current Policy Term Total Insurable Values (TIV) Limits & DeductiblesPREMIUMS PAID

9

Difference in Conditions (DIC): Earthquake and flood coverage for 125 Pacifica, Irvine, CA. Real and personal property owned by F/ETCA

Everest Indemnity Insurance Co &

Princeton Excess & Surplus Insurance

Co.

7/3/14 - 7/3/15 $15,062,918

$15,062,918 limit per occurrence/annual aggregate with respect to earthquake and

flood; Earthquake deductible - 5% of values at risk at the time of loss per unit, per location including time element and extra expense, subject to minimum of

$50,000 per occurrence for earthquake; flood deductible - $50,000 per occurrence;

all other perils - $25,000 per occurrence

$ 35,328 $ 29,305 $ (6,023) -17.0%

The premium decreased due primarily to the revaluation of assets at the Pacifica building, and

secondarily the property market had generally lower rates.

10

Difference in Conditions (DIC): Earthquake and flood coverage for toll operations real property (including toll booths, utility, satellite and operations buildings), fiber optic cables and 6 months business interruption for both agencies

Various Carriers 10/18/14 - 10/18/15

FE Real Property $49,055,278

Fiber optic cables - $66,634,283 Business Interruption - $70,715,717

Total - $178,560,400

SJH Real Property - $16,289,100

Fiber optic cable - $21,271,637 Business Interruption - $66,806,629

Total - $105,696,366

Extra Expense $6,400,000

$110 million limit per occurrence/annual aggregate with respect to earthquake and flood. 5% of total insured values per unit

of insurance for earthquake deductible, subject to $50,000 minimum per

occurrence and flood deductible of $25,000 minimum per occurrence.

$ 639,658 $ 802,552 $ 162,894 25.5%

The premium increased primarily to the revaluation of the agencies' physical assets and

the rise of the Caltrans Construction Index, which is used to value the agencies' large capital assets. The increase was partially offset by a rate reduction of approximately 10% due to market

conditions.

11

Difference in Conditions (DIC): Earthquake and flood coverage for toll operations business personal property for both agencies

Lloyd's, International Insurance Company

of Hanover, Ironshore Europe

Limited

10/18/14 - 10/18/15

FEPersonal Property - $5,596,253

SJHPersonal Property - $2,752,359

Total - $8,348,612

$14,365,796 per occurrence/annual aggregate with respect to earthquake and

flood separately. Deductible: Earthquake - 5% per unit up to $50,000 per occurrence. Flood - $250,000 per occurrence in riskier

flood zones. $25,000 on all other flood zones.

$ 78,876 $ 23,300 $ (55,576) -70.5% The premium decreased primarily due to the decrease in insurable values.

12

Use and Occupancy (U&O): Earthquake coverage for critical bridges and 9 months business interruption insurance for SJHTCA

$ 181,740 $ - $(181,740) -100.0% No longer required by the indenture

13Workers Compensation: For both agencies Travelers 1/1/14 - 1/1/15 N/A $1 million limit per occurrence $ 114,061 $ 113,570 $ (491) -0.4% Minor change in premium

14Insurance Broker Fees: For both agencies Alliant 3/1/14 - 3/1/15 N/A First year of 3 year contract with 3 one-

year options. $ 137,500 $ 140,000 $ 2,500 1.8%

Broker fees are fixed per contract as per the 2014 contract award. As Alliant receives a broker fee, TCA receives a commission rebate from Alliant

equal to the commission earned on each insurance policy renewal. This commission

rebate is shown as a reduction of each related insurance policy premium in this schedule.

125 Pacifica, Irvine, CA 92618 949/754-3400 FAX 949/754-3467 DATE: February 12, 2015 TO: Foothill/Eastern Transportation Corridor Agency Board of Directors San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Sherri McKaig, Manager, Human Resources and Administration SUBJECT: Adopt OCERS Regulation – Waiver of Membership

STAFF RECOMMENDATION:

Foothill/Eastern Transportation Corridor Agency Recommendation

1. Approve making the OCERS regulation on Waiver of Membership applicable to employees

of TCA, allowing any eligible newly-hired employees of TCA to waive membership in the Orange County Employees Retirement System (OCERS).

2. Authorize the chief executive officer to execute the OCERS Employer’s Concurrence -

Waiver of Membership form.

3. Authorize Human Resources to provide the OCERS Waiver of Membership form to all eligible newly-hired employees, to verify if an employee electing to waive membership is eligible and to determine requirements for that employee to participate in state or federal programs providing retirement benefits, and to ensure the necessary steps are taken to enroll the employee in any such program.

San Joaquin Hills Transportation Corridor Agency Recommendation

1. Approve making the OCERS regulation on Waiver of Membership applicable to employees

of TCA, allowing any eligible newly-hired employees of TCA to waive membership in the Orange County Employees Retirement System (OCERS).

2. Authorize the chief executive officer to execute the OCERS Employer’s Concurrence -

Waiver of Membership form.

3. Authorize Human Resources to provide the OCERS Waiver of Membership form to all eligible newly-hired employees, to verify if an employee electing to waive membership is eligible and to determine requirements for that employee to participate in state or federal

OCERS Waiver of Membership February 12, 2015 File No. 2015J-006 Page 2

programs providing retirement benefits, and to ensure the necessary steps are taken to enroll the employee in any such program.

BACKGROUND: The OCERS Board of Retirement passed a regulation allowing newly-hired employees who are at least 60 years old to knowingly waive their right to become a member of OCERS, provided that the employee has no funds on deposit with OCERS. The regulation was subject to ratification by the Orange County Board of Supervisors, which did so on November 18, 2014, thereby allowing the regulation to go into effect. The regulation requires each plan sponsor (i.e. employers like TCA) to make the regulation applicable to itself before any of its eligible newly-hired employees could elect to waive OCERS membership. For newly-hired eligible employees electing to waive membership in OCERS, the Agencies bear all responsibility to ensure those employees are enrolled in any applicable state or federal programs providing retirement benefits. DISCUSSION: There have been prior TCA employees who were eligible to waive OCERS membership as a condition of employment, but OCERS could not process their waiver requests because the regulation had not yet been ratified by the Orange County Board of Supervisors. In order to allow eligible newly-hired TCA employees (i.e. newly-hired TCA employees aged sixty or older with no previous service credit in OCERS) to waive OCERS membership, the TCA Boards of Directors must first approve making the regulation applicable to the TCA. If this item is approved, then any eligible newly-hired TCA employee may waive OCERS membership by executing the OCERS Waiver of Membership form and providing a certified copy of his/her birth certificate. Attachments OCERS Form – Employer’s Concurrence – Waiver of Membership OCERS Form – Employee Waiver of Membership BUDGET: N/A CONCLUSION: Staff recommends approving the OCERS regulation on waiver of membership which allows any eligible newly-hired TCA employee (aged 60 or over with no previous service credit in OCERS) to elect to waive membership in OCERS.


DATE: February 12, 2015 TO: San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Amy Potter, Chief Financial Officer SUBJECT: Arbitrage Rebate and Yield Restriction Compliance Services Contract STAFF RECOMMENDATION: Authorize the Chief Executive Officer to execute a five-year contract with one five-year option (K000993) with PFM Asset Management LLC (“PFMAM”) to provide arbitrage rebate and yield restriction compliance services for an annual fee of $18,000. SUMMARY/BACKGROUND:

The refinance transaction that closed on November 6, 2014 places the agency in a solid financial position, significantly improved the agency’s debt metrics and achieved all of the Board of Directors’ defined goals. Entities that issue tax exempt bonds are required to comply with federal tax requirements that ensure that interest on those obligations remains excluded from gross income for federal income tax purposes. The significantly favorable conditions at the time of the refinancing required tax compliance measures in order to comply with Internal Revenue Service (“IRS”) regulations including the purchase of Treasury Securities—State and Local Government Series (“SLGS”). The agency invested $155.6 million of its indenture reserve funds in SLGS in order to comply with IRS yield restrictions and arbitrage rebate requirements. SLGS are special purpose securities with a zero percent interest rate that are issued to state and local government entities to assist compliance with federal tax laws and IRS arbitrage regulations when the entity has cash proceeds to invest from their issuance of tax exempt bonds. In accordance with the agency’s tax certificate and post-issuance compliance certification, the agency must continue to regularly monitor the returns on its investment portfolio while the bonds

Arbitrage Rebate and Yield Restriction Compliance Services Contract File No. 2015S-004 February 12, 2015 Page 2 are outstanding and must make a determination if certain “arbitrage payments” are owed to the IRS; an payments are generally made to the IRS every five years. Staff worked with the agency’s bond and tax counsel, Stradling, Yocca, Carlson & Rauth to identify firms that are qualified specialists in the technical requirements of the scope of services required. The agency issued a request for proposal for arbitrage rebate and yield restriction compliance services in January 2015 to the three firms that were identified by bond counsel.

The agency received proposals from two of the firms; however one firm did not qualify because it did not propose on the full scope of services required by the agency. The evaluation team, comprised of three staff members from the agency, reviewed the one complete proposal and evaluated it using three criteria weighted on a scale of 100 by their relative importance for identifying the most qualified firm. The criteria included the professional capabilities, demonstrated competence, and specialized experience of the proposer; the proposer’s understanding of the agency and its project needs and the proposer’s ability to provide the services required; and the proposed compensation. DISCUSSION: Based upon the evaluation criteria PFMAM was deemed to be fully qualified to provide arbitrage rebate and yield restriction compliance services to the agency.

During the refinancing transaction, PFMAM assisted the agency in ensuring tax compliance and has detailed knowledge of the deal structure and the related tax issues. PFMAM also assisted the agency in determining the appropriate purchase of SLGS in order to comply with IRS yield restrictions on proceeds from the issuance of tax exempt bonds. In assisting the agency, PFMAM also developed modeling that will be employed to assist the agency in the future.

Agency staff negotiated a 10% reduction in the proposed $20,000 annual fee with PFMAM thereby resulting in an annual fee of $18,000.

Agency bond and tax counsel, Stradling, Yocca, Carlson & Rauth, worked with PFMAM during the refinancing, have recommended PFMAM’s services, and having reviewed the arbitrage rebate and yield restriction compliance services proposal, consider the annual fee to be fair given the complexity of the services required.

As such, staff is recommending a five-year contract (in line with the first IRS reporting requirement) with one five-year option with PFMAM to provide arbitrage rebate and yield restriction compliance services for an annual fee of $18,000.

Arbitrage Rebate and Yield Restriction Compliance Services Contract File No. 2015S-004 February 12, 2015 Page 3 BUDGET/FEES: The $18,000 fee will be available within the FY 2014-15 Budget. Future year’s fees will be approved by the Board as part of the annual budget process.

CONCLUSION:

The refinancing of the San Joaquin Hills Transportation Corridor Agency’s debt in November 2014 improved the agency’s financial position and achieved all of the Board of Directors’ defined goals. The refinance was completed under such favorable market conditions that assistance from a fully qualified firm is required to ensure compliance with the agency’s tax certificate that was part of the bond issuance. These tax compliance services will be required during the life of the bonds and as such agency staff conducted a request for proposal for arbitrage rebate and yield restriction compliance services and determined PFMAM to be the most qualified proposer. Therefore, staff requests approval of the contract with PFMAM for arbitrage rebate and yield restriction compliance services.

PROCUREMENT SUMMARY REPORT File No. 2015S-004 Contract #: K000993 Title: Arbitrage Rebate and Yield Restriction Compliance Services Recommend Award To: PFM Asset Management LLC Procurement Process

Type: Request for Proposal Award Criteria: Negotiated Price Negotiated Price: $90,000 Vendor Sourcing: A Request for Proposals for arbitrage rebate and yield restriction compliance services was issued to three qualified firms at the recommendation of agency’s tax counsel. A total of two submittals were received by the agency. Proposal Results:

CONSULTANT NAME RANK SCORE (max = 300) PRICE

PFM Asset Management LLC 1 286 $90,000(1) BLX Group(2) N/A N/A N/A

EVALUATION CRITERIA MAXIMUM POINTS

PFM Asset Management LLC

Professional capability, demonstrated competence, and specialized experience of the proposer

120 120

Understanding of the Agency and Project needs and ability to provide services required

120 120

Compensation 60 46

(1) Price reduced by 10% during negotiations with PFM Asset Management LLC. (2) Proposal submitted by BLX did not adequately address the scope of services and was determined

non-responsive by the evaluation team. Notes:

• Contract contains standard indemnification language previously approved by legal counsel.


DATE: February 12, 2015 TO: San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Maria Fazio, Manager, Budget and Planning SUBJECT: Second Quarter Fiscal Year 2015 Budget Status Report STAFF RECOMMENDATION: Receive and file. BACKGROUND: The Board of Directors approved the San Joaquin Hills Transportation Corridor Agency (SJHTCA) Fiscal Year 2015 (FY15) budget on June 12, 2014.

The Board of Directors subsequently approved budget amendments to uses of approximately $900,000 for rating agency expenses related to the refinancing transaction, $496,000 for the reallocation of all electronic tolling (AET) testing expenditures between fiscal years and auxiliary toll system equipment maintenance to cover the contract period prior to the AET system acceptance, $28,000 for toll operations consulting services, $256,000 for additional AET transitional contract labor and related supplies, and $33,000 for investment advisory services. Budget amendments are generally proposed when a marked change in operating results is anticipated to have a measurable impact on future revenues or expenses. Since all budget appropriations lapse at year-end, expense line items are not routinely adjusted down. The chief executive officer has the authority to make budget transfers and reallocate funds within the major categories of Administration, Planning, Environmental and Construction, Toll Operations, and Debt Expenses, subject to controls in place under the Bond Indentures of Trust, the Board approved Contracts and Procurement Manual, Investment Policy, Staffing and Compensation Plan, and the agency’s enabling legislation. The approved sources budget for FY15 is $202.1 million, which includes $139.4 million of revenue, $47.8 million of cash on hand restricted for debt service, and $14.9 million of

Second Quarter Fiscal Year 2015 Budget Status Report File No. 2015S-005 February 12, 2015 Page 2

available cash. The amended uses budget for FY15 totals $114.6 million. The attached report analyzes variances based on year-to-date revenues and expenditures. DISCUSSION: Revenue Summary FY15 revenues of $75.1 million represent 53.9% of the $139.4 million in annual budgeted revenues. Variances by type of revenue and detailed explanations are included below.

Annual % of OriginalOriginal Amendments Amended Actual Balance BudgetBudget & Transfers Budget To Date Over/(Short) Earned*

Revenues:Net Toll Revenue 116,813 - 116,813 60,451 (56,362) 51.8% (1)Fees and Penalties 16,800 - 16,800 10,683 (6,117) 63.6% (2)Development Impact Fees 3,500 - 3,500 2,808 (692) 80.2% (3)Interest Earnings 2,316 - 2,316 1,206 (1,110) 52.1% (4)

Total Revenues 139,429 - 139,429 75,148 (64,281) 53.9%

*50% Target as of end of second quarter

Description

San Joaquin Hills Transportation Corridor AgencyFY15 Budget to Actual Revenues

Six Months Ending December 31, 2014($000)

(1) At the end of the second quarter of FY15, the agency recorded net toll revenue of

$60.5 million or 51.8% of the annual budget. As a result of the conversion to AET and the resulting shift in payment patterns, including some patrons who may have previously paid with cash but are now initially identified instead as pursuable violation transactions, included in Net Toll Revenues are tolls identified during the violation process that were appropriately reclassed to Net Toll Revenue. See further discussion in Note (2) below. Approximately $3.6 million in tolls were reclassed as of the end of the second quarter.

(2) Fees and Penalties were budgeted for FY15 at $16.8 million. Actual year-to-date

revenue received totaled $10.7 million, or 63.6% of the budget. The primary reason for the variance is that violation revenue is recorded as collected, and it has increased during the initial months following the AET conversion. The amounts collected from pursuable violations have been inflated, as many of the customers who previously paid cash at the toll booths have generated image-based transactions that must be pursued through the violation process. As a result, the toll amounts collected from these customers have been reclassified as toll revenue. However, additional violation penalty amounts have been collected during the first six months


of the fiscal year despite the implementation of a policy to waive penalties for first-time violations. It is presently uncertain what affect this policy or further changes to it may have on collections for the remainder of the fiscal year. The agency continues its efforts in signing former cash patrons up for accounts and informing infrequent users of the available payment options in order to avoid handling through the violation process.

(3) Development Impact Fee collections received totaled $2.8 million, representing

80.2% of the annual budget. Development impact fees, assessed on new residential and non-residential (commercial, industrial, etc.) development, are highly cyclical as they are based on market conditions. The increase in collections is mainly due to collections on commercial projects in San Clemente, Laguna Hills, and Irvine, and multi-family housing in Newport Beach.

(4) Interest earnings for the fiscal year are higher than budget at $1.2 million, or 52.1%

primarily due to one-time earnings related to the 2013 bond refinance transaction.

Uses Summary FY15 actual uses on an accrual basis of $40.7 million represent 35.6% of the $114.6 million annual amended uses budget. Variances by use and explanations of any significant variances are provided below. A detailed expense report by category follows the summary explanations.

Prorated% of % of Amended

Amends Annual Amended Original Prorated Budget vsOriginal & Amended Actual Balance Budget Budget Amended ActualsBudget Transfers Budget To Date Remaining Used* Used Budget Variance

Administration:Nonoperating Administration 2,217 916 3,133 477 2,656 15.2% 21.5% 1,567 1,090 Toll Operating Adminstration 5,052 45 5,097 2,161 2,936 42.4% 42.8% 2,549 388

Total Administration 7,269 961 8,230 2,638 5,592 32.1% 36.3% 4,116 1,478 (5)Planning, Environmental and Construction 1,582 205 1,787 551 1,236 30.8% 34.8% 895 344 (6)Toll Operations:

Customer Service and Toll Compliance 5,337 248 5,585 2,827 2,758 50.6% 53.0% 2,793 (34) Toll Systems 809 299 1,108 357 751 32.2% 44.1% 554 197 Toll Facilities 431 - 431 116 315 26.9% 26.9% 216 100 Operations Equipment 917 - 917 460 457 50.2% 50.2% 459 (1) ( )

Total Toll Operations 7,494 547 8,041 3,760 4,281 46.8% 50.2% 4,022 262 (7)Debt 96,497 - 96,497 33,787 62,710 35.0% 35.0% 33,787 - (8)

Total Uses 112,842 1,713 114,555 40,736 73,819 35.6% 36.1% 42,820 2,084

Description

San Joaquin Hills Transportation Corridor AgencyFY15 Budget to Actual Uses

Six Months Ending December 31, 2014($000)


(5) Total Administration expenditures were $2.6 million or 32.1% of the $8.2 million

annual amended budget. The variance of $1.5 million between the prorated amended budget and year-to-date expenses in this category is explained as follows: • Salaries, benefits, employer taxes, and temporary help are approximately

$203,000 lower than the prorated amended budget. A total of ten positions were unfilled for all or part of the fiscal year, mainly due to turnover and recruitment, and two employees were out on disability.

• Insurance is lower than the prorated amended budget by $74,000 primarily due to the self-insured retention that has not been used and renewals of other policies that came in slightly under budget.

• Legal Expense is lower than the prorated amended budget by $367,000 primarily due to legal costs that had been budgeted in relation to the SJHTCA refinancing in the event that the transaction was not completed during the year. The refinancing was completed in the second quarter of the fiscal year and these costs are recorded as part of the cost of issuance.

• The Board of Directors approved budget amendments for the Consulting and

Other Services category of $900,000 for rating agency costs related to the refinancing in July, $28,000 to fund the increase in the TTI consulting contract in August, and $33,000 in November for investment advisory services starting in the third quarter. However, this category is lower than the prorated amended budget by $851,000 primarily as a result of costs that were budgeted for the SJHTCA refinancing in the event that the transaction was not completed during the year. The refinancing was completed in the second quarter of the fiscal year and these costs were recorded as part of the cost of issuance. Also, various projects in this category are scheduled to occur later in the fiscal year.

• Marketing is higher than the prorated budget by $117,000 due to the advance costs to develop advertising creative (radio, online video, and digital banners ads) for the marketing campaign. The agency expenses these items rather than recording a prepaid expense unless their term falls between two fiscal years. This item is considered on track with the annual budget.

• Several expenses including Board Compensation, Telephone/

Communications, Office Expense, Education, Seminars and Memberships, Publications and Subscriptions, Transportation and Travel, Office Equipment, and Pacifica Fixed Assets comprise $100,000 of the remaining Administrative Expenses that are under the prorated amended budget. These expenses are incurred on an as needed basis or are scheduled to occur later in the fiscal year.


(6) Expenditures in the Planning, Environmental and Construction categories totaled

$551,000 or 30.8% of the $1.8 million amended budget. The variance of $344,000 between the prorated amended budget and actual results to date is a result of the following: • The Strategic and Policy Planning Study-AET is over the prorated amended

budget by $44,000 with expenditures through the second quarter of $497,000, or 54.9% of the $905,000 amended budget. The FY15 budget is comprised of civil engineering, project management, and on-road toll systems. Also, the Board of Directors approved a $205,000 budget amendment in August for AET testing expenditures originally scheduled for FY14 that were moved to FY15. The implementation phase of AET is near completion and the agency is currently testing and tuning the on-road systems prior to final acceptance which is expected to begin in the third quarter of the fiscal year. Expenditures are scheduled accordingly.

• The expenditures for Other Planning, Environmental, and Construction are

under the prorated amended budget by $388,000. These budgets include funding for various studies to monitor the agency’s compliance with permits and other environmental documents as well as miscellaneous right-of-way work, other special studies, and a signage enhancement project that occur at various times throughout the year or on an as needed basis.

(7) FY15 actual expenses for Toll Operations of $3.8 million were under the prorated amended budget by $262,000 and are 46.8% of the $8.0 million annual amended budget. Toll Operations consists of costs associated with toll collection services, toll systems, toll facilities, customer service, toll compliance, and toll equipment. Other toll operations expenses are spent as needed or are incurred at specific times of the fiscal year.

• Customer Service and Toll Compliance expenditures were over the prorated

amended budget by $34,000, and were at 50.6% of the amended budget, primarily due to higher costs incurred during the post-AET transition related to the increased volumes of customer calls, violations notices processed, and One-Time Toll payments. These costs include additional contract labor for the call center for which $248,000 was approved by the Board of Directors as a budget amendment in August. In addition, the costs for credit card processing fees and for postage to mail violation notices have increased more than was originally expected. Our customer service call volume has declined during the second quarter, and we are optimistic, as more customers continue to transition to FasTrak, ExpressAccounts, and the use of One-Time-Toll, that call volumes and related costs will decline further. These costs are being closely monitored as we continue through the transition, and if necessary, a budget amendment or transfer will be brought to the Board of Directors later in the fiscal year.


• Toll Systems is lower than the prorated amended budget by $197,000, at

32.2% due to the exclusion of maintenance expenses that are currently covered under the installation contract. After system acceptance, maintenance will be paid under the new contract expected to take effect in the second half of the year. Also, the Board of Directors approved two budget amendments in August totaling $299,000 in this category for auxiliary toll system equipment maintenance not covered under the installation contract and AET transitional contract labor office equipment.

• Toll Facilities is lower than the prorated amended budget by $100,000, at 26.9% primarily due to energy and water conservation efforts taken at the toll plazas and ramps, and other projects and maintenance that are incurred as needed or expected to occur later in the fiscal year.

• Transponder Equipment is over the prorated amended budget by $46,000 at

55.6% of the annual amended budget partly due to the timing of transponder deliveries. Transponders are delivered as scheduled, based upon need. This category is considered on track with the annual budget.

• Toll Equipment expenditures are under the prorated amended budget by

$45,000 with expenditures at 5.1% of the annual amended budget. A portion of the computer upgrade project related to toll systems will start in the third quarter. In addition, server replacements are scheduled for later this fiscal year, and the purchase of a facilities truck has been postponed.

(8) FY15 Debt of $33.8 million represents 35.0% of the annual amended budget. Debt

is lower than budget due to the refinance completed in November 2014. The agency budgets and makes debt payments as scheduled.

CONCLUSION: Through the end of the second quarter of Fiscal Year 2015, the San Joaquin Hills Transportation Corridor Agency received a total of $75.1 million in revenue or 53.9% of the annual budget. Net Toll Revenue, Fees and Penalties, Development Impact Fees, and Interest Earnings were above target at 51.8%, 63.6%, 80.2%, and 52.1% respectively. Total uses were $40.7 million or 35.6% of the annual amended budget at the end of the second quarter of the fiscal year. Administration, Planning, Environmental and Construction, and Toll Operations were below the annual amended budget at 32.1%, 30.8%, and 46.8%, respectively. Debt was at an expected 35.0%.

Annual % of % ofOriginal Amendments Amended Actual Balance Budget Budget

Category Budget & Transfers Budget To Date Remaining Used* Remaining

Administration:Regular Salaries & Temporary Help 2,090 - 2,090 921 1,169 44.1% 55.9%Board Compensation 78 - 78 25 53 32.1% 67.9%Benefits 836 - 836 340 496 40.7% 59.3%Employer Taxes 40 - 40 19 21 47.5% 52.5%Insurance 854 - 854 352 502 41.2% 58.8%Legal Expense 880 - 880 73 807 8.3% 91.7%Telephone/Comm 44 - 44 15 29 34.1% 65.9%Office Expense 129 - 129 47 82 36.4% 63.6%Educ, Seminar, Membership, Mtgs 67 - 67 28 39 41.8% 58.2%Consulting & Other Services 978 961 1,939 119 1,820 6.1% 93.9%Marketing 728 - 728 481 247 66.1% 33.9%Publications & Subscriptions 7 - 7 2 5 28.6% 71.4%Rents & Leases 386 - 386 193 193 50.0% 50.0%Transportation & Travel 78 - 78 18 60 23.1% 76.9%Office Equipment 58 - 58 5 53 8.6% 91.4%Pacifica Fixed Assets 16 - 16 - 16 0.0% 100.0%

Total Administration 7,269 961 8,230 2,638 5,592 32.1% (5) 67.9%Planning, Environmental and Construction:

Capital Improvement Plan (CIP):Strategic & Policy Planning Study (AET) 700 205 905 497 408 54.9% 45.1%

Total Capital Improvement Plan 700 205 905 497 408 54.9% 45.1%Other Planning, Environmental and Construction:

Environmental 179 - 179 31 148 17.3% 82.7%Design/Program Mgmt 158 - 158 23 135 14.6% 85.4%Design Special Studies & Other 240 - 240 - 240 0.0% 100.0%ROW Acquisitions, Appraisals & Other 5 - 5 - 5 0.0% 100.0%Other Construction SJH 300 - 300 - 300 0.0% 100.0%

Total Other Planning, Environ and Construction 882 - 882 54 828 6.1% 93.9%Total Planning, Environ and Construction 1,582 205 1,787 551 1,236 30.8% (6) 69.2%Toll Operations:

Customer Service & Toll Compliance 5,337 248 5,585 2,827 2,758 50.6% 49.4%Toll Systems 809 299 1,108 357 751 32.2% 67.8%Toll Facilities 431 - 431 116 315 26.9% 73.1%

Subtotal Toll Operations 6,577 547 7,124 3,300 3,824 46.3% 53.7%Operations Equipment:

Transponder Equipment 818 - 818 455 363 55.6% 44.4%Toll Equipment 99 - 99 5 94 5.1% 94.9%

Total Equipment 917 - 917 460 457 50.2% 49.8%

Total Toll Operations 7,494 547 8,041 3,760 4,281 46.8% (7) 53.2%Debt 96,497 - 96,497 33,787 62,710 35.0% (8) 65.0%

Total Uses 112,842 1,713 114,555 40,736 73,819 35.6% 64.4%

*50% Target as of end of second quarter

San Joaquin Hills Transportation Corridor AgencyFY15 Budget to Actual Uses

($000)Six Months Ending December 31, 2014


DATE: February 12, 2015 TO: San Joaquin Hills Transportation Corridor Agency Board of Directors Foothill/Eastern Transportation Corridor Agency Board of Directors FROM: Joyce Hill, Director, Customer Service SUBJECT: Contract Amendment for Printing and Mail House Services STAFF RECOMMENDATION:

Foothill/Eastern Transportation Corridor Agency (F/ETCA) Recommendation: 1. Authorize the chief executive officer (CEO) to execute Amendment No. 2 to Contract No.

K000858 with QuestMark Information Management, Inc. (QuestMark), for printing and mailing services for Fiscal Year 2015 (FY15) in an amount not-to-exceed $137,000.

2. Authorize the CEO to execute additional changes to this contract within five percent of the

authorized expenditure value ($6,850) without further Board action. San Joaquin Hills Transportation Corridor Agency (SJHTCA) Recommendation: 1. Authorize the CEO to execute Amendment No. 2 to Contract No. K000858 with QuestMark, for

printing and mailing services for FY15 in an amount not-to-exceed $68,000.

2. Authorize the CEO to execute additional changes to this contract within five percent of the authorized expenditure value ($3,400) without further Board action.

BACKGROUND: In September 2013, QuestMark was selected through a competitive procurement process to provide the agencies with printing and mail house services. A one-year contract with two one-year options was awarded under routine business expense (RBE) authorization with a maximum annual value of $100,000 per agency. Actual expenses during the first year of the contract were approximately $78,000 for F/ETCA and $39,000 for SJHTCA.

Contract Amendment for Printing and Mail House Services File No. 2015J-005 February 12, 2015 Page 2 QuestMark’s services include generating, printing and mailing patron statements, invoices and violation notices, as well as supplying the associated paper and envelopes. Mailing of these pieces in a timely manner is critical to the agency’s successful operation. DISCUSSION: The implementation of all electronic tolling resulted in an increase in the number of patron accounts as well the number of violations. This led to an increase in the overall number of statements and notices routinely printed and mailed. Additionally, the violation notices were modified from a one-page, two-sided document to a two-page, four-sided document—enhancing the appearance and better educating patrons on how to use The Toll Roads in the future. Based on this increased demand for QuestMark’s customer service-related printing and handling services, estimated expenses incurred by F/ETCA in the second year of the contract are expected to be greater than those allowed under an RBE. FY15 costs associated with this amendment are estimated at $137,000 for the F/ETCA and $68,000 for the SJHTCA. While SJHTCA’s expenses are expected to remain within the RBE guidelines, consistency between both agencies is required. FUNDING The funds associated with this contract amendment are included in the current FY15 approved budgets. CONCLUSION: QuestMark was selected through a competitive procurement process to provide the agencies with printing and mail house services. Based on the increased demand for QuestMark’s customer service-related printing and mail handling services, estimated expenses incurred by F/ETCA in the second year of the contract are expected to be greater than those allowed as a RBE item. Staff recommends board approval of the contract amendment with QuestMark. Attachment

PROCUREMENT SUMMARY REPORT File No. 2015J-005 Contract #: K000858 Amendment #: 2 Title: Printing and Mail House Services Contractor: QuestMark Department: Customer Service Staff Lead: Joyce Hill, Director Procurement Process Type: Negotiated Amendment Award Criteria: N/A Not-To-Exceed Price: $205,000 Notes: The Contractor provides printing and mailing of patron statements, invoices and violation notices, as well as supplying the associated paper and envelopes. The AET conversion greatly increased the quantities of mailings and has resulted in the estimated expenses incurred by F/ETCA in the second year to be greater than those allowed under a Routine Business Expense (RBE) authorization per the agencies Contracts and Procurement Services (CAPS) Policies and Procedures Manual. Amendment No. 2 authorizes additional funding to the contract within the current term and authorizes the CEO to execute additional changes to the contract within 5% of the authorized expenditure value without further Board action. Contract No. K000858 Compensation:

F/ETCA SJHTCA TOTAL Original NTE Amount $89,831.59 $87,905.57 $134,077.00

Previous Amendments $88,643.40 $43,660.16 $132,303.56 Extend one year (first one-year option) and add new funds.

Current NTE Amount $178,474.99 $87,905.57 $266,380.56 Proposed Amendment No. 2 $137,350.00 $67,650.00 $205,000.00 Additional funding. Revised NTE Amount $315,824.99 $155,555.57 $471,380.56

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