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CALL TO ORDER

Chairperson Kishimoto called the Regular Meeting of the Policy Advisory Committee (PAC) to order at 4:05 p.m. in Building A, Auditorium, Valley Transportation Authority (VTA), 3331 North First Street, San Jose, California.

ROLL CALL

Members Present
Mark Brodsky
Steve Glickman, Vice Chairperson
Dominic Caserta
Joseph D. Hernandez
Greg Sellers
Breene Kerr
Yoriko Kishimoto, Chairperson
Norman Kline
King Lear
Greg Perry
Al Pinheiro
Dolores Sandoval

Members Absent
Armando Gomez
Linda J. LeZotte
Victor Ojakian
Ron Swegles

A quorum was present. 

Orders of the Day

There were no Orders of the Day.

Public Presentation 

Alternate Member Kennedy introduced Greg Sellers, newly appointed PAC member representing the City of Morgan Hill.

Member Caserta took his seat at 4:07 p.m.

Evaluate the Policy Advisory Committee and the City Groupings in relationship to the Board Restructuring Committee recommendations

PAC Chairperson Kishimoto introduced Board of Directors’ Chairperson Joe Pirzynski who stated that the Ad-Hoc Restructuring Committee, which was suspended on May 6, 2004, will reconvene on March 24, 2005, at 4:00 p.m. 70 West Hedding Street, East Wing, 10^th Floor, to evaluate the effectiveness, process, and progress of the Policy Advisory Committee and City Groupings.   Board Chairperson Pirzynski asked the Committee to focus on: 1) whether or not PAC’s advisory role has progressed internally and externally and 2) if interaction with the City Groupings has improved communication with regard to bringing each City Groupings’ transportation issues forward. 

Member Kerr took his seat at 4:15 p.m.

Upon query by Chairperson Kishimoto, Board Chairperson Pirzynski stated that the Ad-Hoc Restructuring Committee is comprised of Members Gage, Williams, Chu, and himself. 

Member Perry expressed concern regarding whether or not the Board of Directors listens to PAC. 

Upon query by Member Kline, Board Chairperson Pirzynski clarified that the intent of the Ad-Hoc Restructuring Committee Meeting is to review City Groupings and PAC’s performance and progress, he noted that other discussion was not precluded.

Member Perry expressed concern that “energizing” PAC not be seen as an alternative to restructuring.

Member Kerr noted that there has been a positive increase in PAC dialog.    He expressed concern that the City Groupings and PAC are redundant receiving the same information several times and suggested combining City Grouping and PAC meetings for efficiency. 

Member Glickman likened the Board of Directors to PAC as the House of Representatives to the State Senate and suggested that PAC work together respectfully to reflect the cities concerns with a unified voice.

Member Kline expressed concern that PAC Committee is too large to speak in one voice noting that individual city’s have varying concerns. 

Member Caserta expressed concern that he is not always able to discern if PAC Members are speaking for their cities or expressing personal views. 

Chairperson Kishimoto asked the Committee if they felt PAC and the City Groupings had improved over the past year.  The Committee concurred that there has been improvement.

Member Sandoval stressed the need for PAC to think regionally and noted that redundancy may be necessary to ensure that issues are discussed from both a local and a regional perspective.  She noted that PAC and the City Groupings have become stronger over the last 18 months.  And noted that the Committee does not see its work done but and suggested that PAC request the Ad-Hoc Committee revisit the issue of restructuring.

Member Kline felt that there is a need to restructure and noted that it will be a long process.   He expressed concern that the current structure does not serve the people efficiently.  

Member Kerr expressed opposition to restructuring at this time and noted that the current structure could be improved.   He suggested that more staff support be provided to the City Groupings as well as to Board Members of smaller cities who do not have their own city staff support. The additional support would allow smaller cities the resources necessary to better research the issues and fully participate in discussions.   Member Kerr also suggested that the use of telephone conference facilities could be beneficial.

Member Lear suggested PAC advise the Board of Directors of the need for restructuring in a way that would lead PAC to be absolved and put more importance on the City Groupings.

Chairperson Kishimoto noted that PAC has made progress and expressed opposition to the necessity for restructuring.

M/S/F (Perry/Brodsky) on a vote of 6 ayes to 6 nays to 0 abstentions to advise the Ad-Hoc Committee that PAC and the City Groupings have made some progress but recommend that the Ad-Hoc Committee continue work on the issue of restructuring. Members Brodsky, Sellers, Kline, Lear, Perry, and Pinheiro supported the motion. Members Caserta, Glickman, Hernandez, Kerr, Sandoval, and Chairperson Kishimoto opposed the motion.

M/S/C (Kishimoto/Glickman) to advise the Ad-Hoc Committee that PAC and the City Groupings have made some progress and to keep restructuring on the table as an issue to be studied.

M/S/C (Sandoval/Caserta) to recommend that the PAC Chairperson join the Board of Directors as an ex-officio member similar to the Board’s two Metropolitan Transportation Commission representatives. The closer relationship will help ensure that the PAC’s voice is heard.

Member Sellers agreed with the need to work regionally but expressed concern that South County does not carry much weight, as an example, the needs of Morgan Hill and Gilroy are frequently different than the needs of Milpitas, making it difficult for the VTA Board Member from South County City Group to accurately represent the views of each city. 

Minutes of February 10, 2005

M/S/C (Sandoval/Glickman) on a vote of 11 ayes to 0 nays to 1 abstention to approve the Minutes of February 10, 2004.  Members Sellers abstained.

Committee Staff Report

Carolyn Gonot, Chief Development Officer, introduced staff members, Ann Jamison, Director of Congestion Management Planning and Programming; John Ristow, Deputy Director of Programming and Highway Administration; and Bernice Alaniz, Deputy Director of Marketing and Public Affairs. 

Upon query of Chairperson Kishimoto, Matthew O. Tucker, Chief Operating Officer, provided an overview of the outcome of the Paratransit Eligibility Process Item heard at the March 3, 2005, Board of Directors Meeting.   Mr. Tucker advised the Committee that the eligibility process has been streamlined for efficiency and ease of use.

On order of Chairperson Kishimoto, there being no objection, the Committee Staff Report was received.

Chairperson’s Report

Chairperson Kishimoto reported that a PAC Workshop is scheduled for April 1, 2005, to discuss the Valley Transportation Plan 2030.  She suggested that three subcommittees be formed to focus on the following topics: revenue, capital projects, and alternative services.  She requested PAC members bring their recommendations to the Workshop for consideration. 

City Groupings Reports

There were no City Groupings Reports.

BUSINESS REFERRED TO COMMITTEE BY THE BOARD OF DIRECTORS/ GENERAL MANAGER

Policy Advisory Committee Bylaws Amendments      

Chairperson Kishimoto read the following e-mail message from Member LeZotte into the record: 

Madam Chair

I apologize for not being able to attend tonight's meeting.   I have been asked to give the opening remarks at this year's National Junior Wheelchair Basketball Championship Tournament at the same time.  The tournament is in San Jose this year and I am the liaison to the Disability Advisory Commission.  Although I hate to miss any of the PAC meetings, I am particularly disappointed to be missing this meeting as I feel the discussion of by-laws is very important.  I am sending you this email in the hopes that you might be able to read my thoughts into the record.
* I feel that we should change our agenda to include a consent calendar, so that we might concentrate our discussion time on items that the committee must take action on, such as the by-laws discussion.  Reports offer valuable information, but rather then verbal presentations could be provided as written staff reports and approved on a consent calendar.  That way more of the members are likely to be present for discussion items.  For example, I would have preferred that the by-laws item on be closer to the beginning of the agenda.  We have always struggled with keeping a majority of the members at the meeting for items late in the agenda, due to the conflict with the Santa Clara County Citizens Association (SCCCA) meeting.
* I have some thoughts on the by-laws discussion and changing the number of members needed to carry a motion.   I think it makes sense, as long as this change is consistent with the Board and other committees.  When we changed the requirement to a majority of the members present, we did so, because it had become almost impossible to keep a quorum for the entire meeting.  Since the PAC has become more influential and we have made progress in raising the profile of the Committee, I feel that the proposed change will allow the PAC to more accurately represent the will of all the Cities in the County. 
* As we seek to further raise the profile of the PAC it may be incumbent upon us to seek other ways to ensure that we have a quorum. Perhaps this new standard will force more of our colleagues to prioritize attendance.  (I fully recognize the irony in delivering this message in absentia and again apologize.)

Thank you for your dedication in serving as chair and I look forward to seeing you at the next meeting.

Sincerely,

Linda J. LeZotte
City of San Jose

Member Lear noted that PAC is different from the Board of Directors and therefore need not be held to the same voting standard. 

Member Glickman expressed support for the Board of Directors desire to modify the voting requirements.

Committee Members noted that many city/town councils employ “majority of quorum present,” as opposed to “majority of total membership,” and expressed their view that it is not imperative that the voting requirements for all VTA advisory committees be consistent.

M/S/C (Lear/Brodsky) on a vote of 11 ayes to 1 nay to 0 abstentions to oppose the amendment to the Policy Advisory Committee (PAC) bylaws requested by the VTA Board of Directors to modify the number of affirmative votes required to pass an item.    Member Glickman opposed.

M/S/C (Glickman/Brodsky) to approve the amendment to the Policy Advisory Committee (PAC) bylaws requested by the VTA Board of Directors to codify the responsibility of the PAC chairperson to collaborate with the chairperson of the VTA Board on integrating the PAC Work Plan with the objectives of the VTA Board.

Member Kerr left the meeting at 5:22 p.m.
Member Lear left the meeting at 5:24 p.m.
Member Caserta left the meeting at 5:25 p.m.

FY 2004 Transit Operations Performance Report and Analysis

Mr. Tucker provided an overview of the FY 2004 Transit Operations Performance Report and Analysis outlining New Accounting Methodology Summary Of Changes:
1) Allocated general administration to transit operating modes on the basis of a full-time equivalent (FTE) distribution, 2) Cost Center functional/modal split, several Cost Centers were affected with the most significant changes seen on the following: a) movement of the Farebox/Electronics cost center from Vehicle Maintenance to Non-Vehicle Maintenance, b) a shift in operating costs from Bus to Light Rail for the following cost centers, Protective Services, Revenue Services, and Facilities due to revision of their cost allocation base, c) revised allocation of general administration, resulting in more allocation to Purchased Transportation, 3) Identified amount of under-charged labor hours to non-transit operations activities which resulted in  a decrease to transit operating costs and an increase to non-transit operating costs.

Future plans are to modify the existing exception-based timekeeping system to a system that will more accurately reflect the overhead costs to operations, capital projects, and direct services with a target implementation of FY 2006.  

Mr. Tucker noted that bus service reduction results in immediate cost savings by removing the operator and maintenance staff associated with the deleted bus stop area.  Light Rail however has an infrastructure that must be maintained resulting in minimal cost savings.

Mr. Tucker provided an overview of Actual Revenue Hours Per Employee and noted that Member Perry’s suggestion, understanding the makeup of VTA, to break out the graph to show all labor and the measure of operation.  He noted that this method gives a good “apples-to-apples” comparison and pointed out that though goals are not yet met VTA is trending in a positive direction.

Mr. Tucker provided an overview of Achieving Improved Results: 1) continue refining National Transit Database (NTD) reporting methodology, 2) continue reducing operating expenses: a) system operating costs were $24 million, 10 percent under the 2004 projected budget, b) significant reduction in absenteeism, c) established staffing standards for Operator, Mechanic, and Supervisory positions, 3) continue improving productivity and service quality, 4) re-think Service Delivery Model (service optimization), and 5) increase Revenue and Ridership. 

Member Brodsky thanked Mr. Tucker for his responsiveness to the Members of PAC and noted the forming of a solid foundation for a very good future working relationship.  

Member Perry complimented Mr. Tucker for improvement in revenue hours per employee.   He noted however, that the bus operating cost per actual revenue hour trend has not been good.  He pointed out that this is an area with significantly higher overall costs than other area transit system operators and requested material for comparison as to year, end-year goals, and what policies are acting as cost drivers that make VTA so much more expensive. 

Mr. Tucker agreed that VTA’s cost per boarding is higher than many other transit operators.   He stated that wages and benefits are primary cost drivers and that VTA’s wages are higher than many other transit systems.  Mr. Tucker also noted that each operator has a different business model (some systems have an engineering staff and some do not), and noted that a good starting point would be to look at various cost structures based only on wages and benefits versus other activities the systems have. 

On order of Chairperson Kishimoto, there being no objection, FY 2004 Transit Operations Performance Report and Analysis, was received.

FY 2006 and FY 2007 Biennial Budget Assumptions

Susan Stark, VTA Controller, distributed a handout titled Santa Clara Valley Transportation Authority Budget Assumptions FY 2005 and FY 2007, and brought the Committees’ attention to the Guidelines (items evaluated throughout the budget process for possible changes).  She noted the major items evaluated are:

On Page 2, Economic Conditions - Ms. Stark advised the Committee that the chart reflects growth estimates for the nation and the Bay Area provided by the California Legislative Analyst Office and the Association of Bay Area Governments (ABAG).  She noted that economists continue to believe the Bay Area is still continuing on a strong growth track.  ABAG feels that the Bay Area will continue to grow although it will lag behind the nation and are therefore projecting a moderate annual growth by 2007. 

On Page 3, Inflation Factors – Ms. Stark reported that the California Department of Finance projects a 2.6 percent increase in Santa Clara County in FY 2006, VTA concurs and is projecting  an inflation rate of 3 percent for FY 2006 and FY2007.

On Page 4, Labor, Potential Bond Issuances, and Interest Rates – Ms. Stark noted that VTA’s labor cost projections use an estimated increase of 3.5 percent for the combined total of wage and benefits costs which is consistent in being applied to the VTA Long-Range Operating Forecast and is in keeping with any consideration of existing Labor Agreements.  Regarding Potential Bond Issues the Board of Directors authorized an issuance of up to $80 million in debt services in 2003 in lieu of a potential 21 percent service reduction.  She reported that VTA does not expect to have a deficit in the current fiscal year and does not anticipate the need to take advantage of those debt issuances in 2006 or 2007.  Regarding Interest Rates Ms. Stark reported that based on VTA’s current interest rate forecast the rate of return for investments in 2006 and 2007 is being projected at 3 percent, actual average return 3.17 percent in 2004 with a current rate of return between 2.9 and 3 percent.

On Page 5, Sales Tax Estimates – Ms. Stark reported that the Center of Continuing Study of the California Economy is projecting a $142 million sales tax estimate for 2005, $149 million for 2006, and $156 million for 2007 which reflects an increase of approximately 5 percent per year.  For budgeting purposes VTA uses the mid-point between the conservative and the moderate projections and has found this historically to come fairly close to the actuals.   She reported that the projections for FY 2005 reflect an approximate $3.1 million increase over FY 2004.

On Page 6, Fuel, Traction Power, and Fares – Ms. Stark reported that regarding Fuel the rule of thumb is that for approximately every $3 increase per barrel increases VTA’s fuel cost by approximately 10 ¢ per gallon.  She reported that for budgeting purposes VTA is assuming fuel prices will remain high and are using $1.70 and $1.75 respectively for FY 2006 and FY 2007.  She reported that VTA’s assumption for Traction Power is 13.4 ¢ per kilowatt-hour the actual average for 2004 was 12.2 ¢ per hour.  She noted that every 2 ¢ increase in kilowatt-hour rate adds approximately $500,000 of operating cost to VTA’s budget.  Regarding fares Ms. Stark reported that in December 2003 the Board of Directors approved a Fare Policy that established a process for fare review to be conducted in conjunction with the development of the bi-annual budget. Included is a cost recovery target along with a January implementation date for any necessary fare increases, she noted that it is VTA’s primary goal to move closer to the cost recovery target during the next budget cycle through lowering of operating cost and through attempting to increase ridership.  She reported that VTA is not currently anticipating any fare increases.

In conclusion, Ms. Stark directed the Committee’s attention to Page 9 of the handout that contained a list of scheduled budget meetings for the remainder of the fiscal year.

Draft Long-Term Transit Capital Investment Program Public Review

On order of Chairperson Kishimoto, there being no objection, the Draft Long-Term Transit Capital Investment Program Public Review was deferred. 

Implementation Plan for the Valley Transportation Plan 2030 (VTP 2030) Highway Project

Mr. Ristow reported that the Board of Directors approved the VTP 2030 25-year plan on February 3, 2005.   He reported that in order to begin implementation of this next generation of highway projects it is necessary to establish a shorter list of projects that can be moved into the next stage of project development.  

Ms. Gonot reported that CMP is planning to swap funds and cities matches to complete the list of projects and move them into project development so that when money becomes available the projects can move ahead quickly.  Mr. Ristow noted that cooperative agreements will be entered into with some of the cities that have expressed a desire to contribute to moving projects to the next phase.

Chairperson Kishimoto asked if the project list included High Occupancy Vehicle (HOV) connectors.  Mr. Ristow noted that currently none of the projects include HOV lanes and pointed out that the projects are still in very early stages.  He reported that as the HOV, rapid bus, and High Occupancy Toll (HOT) Lane network is developed he anticipates that locations where a need for HOV lanes will be determined.   Ms. Gonot stated that a HOT Lane Feasibility Study is currently being completed and will be presented to the PAC Committee with recommendations on what projects should be moved forward.

On order of Chairperson Kishimoto, there being no objection, the Implementation Plan for the Valley Transportation Plan 2030 (VTP 2030) Highway Project was discussed.

I-880 Corridor Study

Mr. Ristow reported that VTP 2030 identified two additional new corridors for review, one is the I-880 Corridor Study.  Results of this study will be incorporated into the next update of the 25-year plan.

Member Brodsky pointed out that there is not much room available to expand laterally and suggested the possibility of a raised HOV lane.

On order of Chairperson Kishimoto, there being no objection, the use of Local Program Reserve Funds (LPR) in the amount of $500,000 for the I-880 Corridor Study; and the General Manager executing a contract with Mark Thomas and Company for the study for a total value not to exceed $500,000, was reviewed.

South County Circulation Study

Mr. Ristow reported that VTP 2030 identified two additional new corridors for review, one is the South County Circulation Study.  Results of this study will be incorporated into the next update of the 25-year plan.

Member Sellers stated that the City of Morgan Hill appreciates the study in particular the Coyote Valley portion though not called out in the report, and expressed interest in the results. 

On order of Chairperson Kishimoto, there being no objection, the use of Local Program Reserve Funds (LPR) in the amount of $500,000 for the South County Circulation Study; and the General Manager executing a contract with URS Corporation for the study for a total value not to exceed $500,000, was reviewed.

Vehicle Registration Fee (VRF) Legislation

Mr. Ristow reported that there has been some discussion regarding a possible vehicle registration fee and that San Mateo will put the fee into effect in a couple of months.  He advised the Committee that the legislation is in VTA’s Board approved State and Legislative Program.  Mr. Ristow reported that AB 1546 (Simitian) Vehicle Registration Fee would allow the VTA Board of Directors, with a two-thirds vote, to add a $5 vehicle registration fee to every vehicle registered within the County of Santa Clara.   He reported that the use of the fee revenue (approximately $7 or $8 million per year) would follow a Board approved expenditure plan.   He reported that an Ad-Hoc Task Force made up of all the cities in the County will develop a guideline for the expenditure plan.  He reported that there would be a presentation at tonight’s Cities Association Meeting.

On order of Chairperson Kishimoto, there being no objection, the status report on Vehicle Registration Fee (VRF) Legislation was received.

Committee Work Plan

On order of Chairperson Kishimoto, there being no objection, the Committee deferred the Committee Work Plan.

OTHER

Announcements

There were no Announcements.

Adjournment

On order of Chairperson Kishimoto, there being no objection, the meeting was adjourned at 6:10 p.m.

Respectfully submitted,
Barbara R. Box, Board Assistant
VTA Board of Directors