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CALLED TO ORDER

The Workshop Meeting of the Santa Clara Valley Transportation Authority’s (VTA) Board of Directors was called to order by Vice Chairperson Chu at 8:43 a.m., Hyatt San Jose, Mediterranean Center, 1740 North First Street, San Jose, California.

ROLL CALL

Members Present
Nora Campos
Cindy Chavez, Chairperson
Dean Chu, Vice Chairperson
Don Gage
Dennis Kennedy
Breene Kerr
John McLemore, Ex-Officio
Greg Perry
Dolly Sandoval
Forrest Williams

Members Absent
Jim Beall, Ex-Officio
David Cortese
Liz Kniss

Alternates Present
Norman Kline
Pete McHugh
Ken Yeager

Alternates Absent
Jamie Matthews
Al Pinheiro

* Alternates do not serve unless participating as a Member.

A quorum was not present and a Committee of the Whole was declared.

Vice Chairperson Chu noted that Chairperson Chavez was delayed due to a car accident and she would arrive shortly.

PUBLIC PRESENTATIONS           

Alternate Board Member McHugh took his seat at 8:47 a.m. and a quorum was declared.

Ross Signorino, Interested Citizen, referenced a news article and expressed concern regarding VTA Board of Directors and County Board of Supervisors attempting to link two quarter cent sales tax proposals together.   Mr. Signorino stated that this would circumvent Proposition 13, which was approved by the voters.   He referenced
Mayor Hammer’s attempt in 1992 to pass a tax to get the Giants Stadium in San Jose with the addition of two other items to the proposition.  Mr. Signorino stated that the proposition circumvented Proposition 13 and lost by a simple majority vote. 
Mr. Signorino stated he would be opposed to a proposal by the VTA Board of Directors and County Board of Supervisors to link two quarter cent sales tax measure together as a one half cent sales tax measure on the ballot.  

Board Orientation

Mr. Burns stated that the purpose of the Board of Directors Workshop is two fold: 1) to provide an overview of VTA through the use of the VTA Board of Directors Orientation Binder; and 2) to discuss the Recommended VTA Revenue and Expenditure Plan.  Mr. Burns commented that the staff presentation for the Board Orientation would be brief to allow sufficient time for discussion on the Expenditure Plan. 

Mr. Burns commented that the Board Orientation Binder is provided to new
Board Members to provide a specific reference regarding all the various aspects of VTA’s organization.   Mr. Burns commented that executive staff was in attendance to provide a general overview of VTA, the organizational structure, key roles, responsibilities, and activities. 

Mr. Burns noted that the Board Orientation Binder was provided to the VTA Board of Directors and to all VTA Advisory Committees.   Mr. Burns added that the Board Orientation presentation will be provided to all VTA Advisory Committees in February 2006. 

Chairperson Chavez took her seat at 8:53 a.m., Vice Chairperson Chu relinquished his seat as Chairperson and Chairperson Chavez presided for the remainder of the meeting.

Mr. Burns commented that the Board Orientation Binder contains a folder with a Compact Disk (CD), which includes all the information and documents contained within the Board Orientation Binder and other relevant information.   The Board Orientation Binder provides information on VTA’s Vision, Mission and Goals; an overview of the Board of Directors; the 2006 Board Roster; the 2000 Measure A Ballot Language; the Adopted Biennial Budget 2006 – 2007; the Short Range Transit Plan (SRTP) 2006 – 2015; and the Valley Transportation Plan (VTP) 2030. 

Mr. Burns noted that each division chief will provide a brief overview of their division and added that the information was approved in the FY 2006 – 2007 Adopted Biennial Budget.   Mr. Burns stated that staff will be coming to the Board of Directors in March 2, 2006 VTA Board of Directors Regular Meeting with a budget update for FY 2006.   The numbers in the presentation include for the most part only the operating cost component with one exception associated with the Construction Division.  The Construction Division is funded through the Capital Program so staff has included capital dollars for the Construction Division for illustration purposes.

Mr. Burns provided a power point presentation titled, “Santa Clara Valley Transportation Authority Organizational Overview January 27, 2006.”   Mr. Burns stated that VTA is a multi-modal, multi-functional transportation agency for Santa Clara County.   VTA is unique in that it combines three functions under one agency:  1) VTA is involved in transit related to the operations of bus and light rail; commuter rail partnerships with Caltrain, Altamont Commuter Express (ACE), Capitol Corridor; and Paratransit Services; 2) VTA is also a project delivery organization that constructs and designs transit facilities, rail expansion, and highway improvements; and 3) VTA is a planning and funding agency that serves as the designated Congestion Management Agency (CMA) for Santa Clara County.  As the CMA, VTA is responsible for linking transportation projects and improvements with land use planning. 

Mr. Burns provided a brief overview of the organizational structure.   The General Manager and General Counsel report directly to the Board of Directors.   The following divisions report to the office of the General Manager: Administrative Services, Construction, Development Congestion Management, Fiscal Resources, Operations, and Technology. 

Mr. Burns reviewed the major revenue and expenditure components of the budget.   The major revenue components include local sales tax revenues, Transit Development Act (TDA) funds, State Transportation Act (STA) funds, fares, operating grants, and other miscellaneous categories.   Mr. Burns noted that a large component of VTA’s expenditures are related to wages and benefits and contracted services: Caltrain, ACE, Capitol Corridor, and Paratransit Services.

Mr. Burns reviewed the functions of the Office of the General Manager and commented that the responsibilities are to provide Board Support, Policy Development, Strategic Planning, and Intergovernmental and Business Relations.   The Office of the General Manager consists of the Office of the Board Secretary, Copy Center, and Records Management and Document Control.   Maria Marinos, Board Secretary, is responsible to provide Board Support and has eight Board Assistants.  The Copy Center operates  24 hours a day and has six employees.  Kurt Evans and Jim Lawson staff the Intergovernmental and Business Relations Department.  Mr. Burns continued that the goals of the Office of the General Manager are to increase ridership; to improve the financial stability of the organization; improve relationships with VTA Board Committees, Governmental Agencies within the area, and Transportation Stakeholders; and the delivery of Capital Programs.

Suzanne Gifford, General Counsel, reviewed the responsibilities of the Office of the General Counsel.  Ms. Gifford commented that the Office of the General Counsel consists of seven attorneys and two staff employees.  As General Counsel, Ms. Gifford reports directly to the VTA Board of Directors.  The Office of the General Counsel’s responsibilities are to provide legal advice and counsel to all divisions and departments as well as to the General Manager and VTA Board of Directors.  The goal of the Office of the General Counsel is to assist divisions to achieve their goals by providing legal advice, counsel, and support. 

The Office of the General Counsel handles all legal aspects of the organization except workers compensation, which is handled by outside counsel.   The Office of the General Counsel has extensive knowledge and experience in the following areas: federal grants; State contracting law; Americans with Disabilities Act (ADA); Disadvantage Business Enterprise (DBE); Equal Employment Opportunity Act (EEO); Title 6 and Title 7 - Civil Rights Act, Federal Buy-America Requirements; Public and National Labor Relations Employment Law; Discrimination, Wage and Hour Issues; Public Meetings; The Brown Act; Conflict of Interest; Public Record; Congestion Management Laws of California; Federal Transit Funding; Metropolitan Transportation Commission (MTC) related issues; Construction Law; Railroad Law; California Public Utilities Commission (CPUC); Federal Railroad Administration (FRA); Federal Transportation Law; Taxation Law; Litigation; Personal Injury Law; Public Pension Law; Domestic Relations Orders; and Deferred Compensation and Labor Law Administration.   

Board Member Kerr took his seat at 9:07 a.m.

Ms. Gifford stated that VTA has reduced its need to hire outside counsel and only utilizes outside services for very few matters, which require specialized services.   Ms. Gifford offered to meet individually with new Board Members to review any questions in greater detail.   Ms. Gifford noted that the workload of the Office of the General Counsel has increased so VTA is considering hiring another attorney to provide additional coverage. 

Matthew O. Tucker, Chief Operating Officer, provided an overview of the Operations Division.   The Operations Division consists of 1,700 employees the bulk of which are bus and light rail operators and other employees who support day-to-day activities of operations.   VTA has an active fleet of 423 buses and 100 light rail vehicles.  The Operations Division manages shuttle services, contracted paratransit services with OUTREACH Paratransit Services, and contracted service with Caltrain, ACE, Highway 17 Express, and Dumbarton Service.  The Operations Division is responsible for service planning, schedules, and operator training.  The Operations Division includes Protective Services for transit patrol and security, which consists of reporting and analysis, system support, and administrative support. 

Mr. Tucker outlined various accomplishments including increases in ridership, streamlining the Operations Division, improvements with absenteeism and staffing to ensure productivity, and containment of costs.   Other accomplishments include the Community Bus in Los Gatos, Bus Raid Transit (BRT) Line 522, the Vasona Light Rail opening, and the Zero Emission Bus (ZEB) Pilot Program.   The goals of the Operations Division are to develop initiatives to: increase ridership, working in partnership with the Ridership Initiative to Develop Energy-Efficiency (RIDE) Task Force; streamline and reduce costs; improve customer service; conduct the Comprehensive Operations Analysis (COA); and invest in employees by providing training to ensure that employees are more productive and effective in the organization.  Mr. Tucker stated that it is the intent of the Operations Division to contain or reduce costs while simultaneously ensuring the highest quality service for the community.

Jack J. Collins, Chief Construction Officer, provided an overview of the Construction Division, which manages construction of VTA’s rail, highway, and facilities projects.   Mr. Collins noted that the Construction Division’s mantra is “on time and on budget.”   The major accomplishments of the Construction Division include:  the Vasona Light Rail Project, 880 widening landscaping, 152 Phase B1, 85 Noise Mitigation Project, Cerone Division Improvement to the operations and repair buildings, and improvements for the ZEB’s fueling facility. 

The goals of the Construction Divisions are to complete the following projects: River Oaks Bicycle/Pedestrian Bridge in March 2006; Preliminary Engineering (PE) for Silicon Valley Rapid Transit; PE for Capital Expressway Light Rail (LR) Project; Coleman/880 Interchange Project; 85/101 North Interchange Project; 17 Auxiliary Lanes from Hamilton to Camden; Route 87 North High Occupancy Vehicle (HOV); 152 B Project, commence construction of the Downtown Platform Retrofit Project; commence construction of 152/156 Improvement Project; and commence construction of landscaping for 85/101 North and Coleman/880 Interchange Project.
Mr. Collins commented that full time equivalent staffing levels were 128 in 2005, 112 in FY 2006, and projecting 74 in FY 2007.

Roger Contreras, Chief Financial Officer, provided an overview of the Fiscal Resources Division, which is divided into four departments:   1) Accounting Compliance Review Department that conducts reports on VTA’s financial condition; 2) Contracts and Materials Management Department that administers and manages contracts; 3) Disbursements and Revenue Services Department that reviews invoices, process payroll checks, currency, and coins; and 4) Treasury and Financial Planning Department that manages financing and investment portfolios, and prepares the biennial budget. 

The Fiscal Resources Division’s accomplishments include: financing transactions for subleases Light Rail Vehicles (LRV), lease to service for Low Floor LRVs, refunded 2001 Bonds for $17 million in savings, investment earnings; and implementing the first biennial budget and fare policy.   The Fiscal Resources Division goals include financing transactions to remarket 2000 Measure A Bonds, fund accounting conversion, attendance at an annual vendor fair, annual compliance review plan, and the automated budget system. 

George Barlow, Chief Technology Officer, discussed the Technology Division.   Its responsibilities include providing technology assistance to all departments and divisions to enable the users to perform tasks in a more efficient and cost effective manner.  The Technology Division consists of three departments: 1) Technology department – responsible for administrative duties and functions within the Technology Division; 2) Infrastructure department - responsible for the desktop programs, network, and electronic mail (e-mail); and 3) Applications department - responsible for the applications and provides support to programs.  The major programs are: 1) Bid Dispatch and Timekeeping System (BDT) – operator payroll system; 2) Expedition Program – used by the Construction Division to monitor progress of large projects; 3) Advance Communication System (ACS) – computer dispatch, locator system, and Global Positioning System (GPS), which tracks the buses and conducts radio communication with the buses and light rail vehicles; 4) SAP – core system of VTA organization, which tracks all financial activities within the organization; 5) Trapeze – used by Operations Division related to the schedules; and 6) Cameras on the buses and  LRV’s, which are monitored by Protective Services to ensure activities are monitored to deter crime. 

Technology Division accomplishments are: the Technology Strategic Plan/Capital Investment Program; the installation of Closed Circuit Television (CCTV) on 80 LRV’s; reduced Technology service delivery costs; and completion of the setup of VTA Backup Recovery Center at Guadalupe Light Rail.   The Technology Division goals include: SAP Hardware and Software upgrades; implementation of “Real Time Customer Information”; implementation of the new Budget System; upgrade security cameras on VTA buses; and implementation of the TransLink Program.

Board Member Gage took his seat at 9:37 a.m.

Carolyn M. Gonot, Chief Development Officer, provided an overview of the Development and Congestion Management (DCM) Division, which is comprised of the following four departments: planning, project development, commercial development, and marketing.   The Planning Department includes transit planning, which is responsible for the production of the long-range transit plan, VTP 2030; the Congestion Management Plan (CMP); and developing and implementing the design in transportation program; Bicycle and Pedestrian Program; and conceptual design for the 2000 Measure A Program projects.   The Project Development Department is responsible for programming and grants, allocating state and federal funding for the highway projects, overseeing environmental planning and real estate acquisitions for projects.  The Commercial Development Department is responsible for identifying and investigating opportunities for Joint Development (JD) ventures and Transit Oriented Developments (TOD), and development of excess parcels.  The Marketing Department is responsible for four areas:  Customer Service, Community Outreach, Media and Public Affairs, and Marketing and Advertising.

Ms. Gonot reviewed the Division’s accomplishments including the completion of the
FY 2006 – 2015 SRTP Update; the 2006 State Transportation Improvement Program (STIP); the High Occupancy Toll (HOT) Lanes Feasibility Study; the Joint Development Program Policy (JDPP); the I-880 Corridor and South County Highway Studies; and the Measure A Caltrain Plan update.

Bernice Alaniz, Marketing and Public Affairs Deputy Director, reviewed the responsibilities of the Marketing and Public Affairs Department.   Ms. Alaniz commented that this department is responsible for the content of the website; public affairs and outreach efforts; the customer service (408) 321-2300 line; and creative services, which is responsible for all the printed material, signage, campaigns, and schedules.   Ms. Alaniz noted that the Marketing Department is currently working on the following campaigns:  Leisure/Destination Promotion; Senior/Disabled Free Fare; and new Service Corridor Promotions.

Mr. Burns stated that he is currently in the process of interviewing for the position of Chief Administrative Officer and noted that position should be filled within the next
45 days.   Mr. Burns reviewed the responsibilities of the Administrative Services Division including: 1) Employee Services Department headed by Shellie Albright, Employee Services Manager, responsible for classification, compensation and personnel service, retirement services, and employee benefits; 2) Risk Management Department headed by Nanci Eksterowicz, Risk Manager, responsible for workers compensation claims and settlements, other liability claims, substance abuse, safety, emergency response, environmental compliance, employee assistance, and implementation of transitional work program; and 3) Employee Relations Department headed by Bob Escobar, Employee Relations Manager, responsible for labor contract negotiations, administering grievances, arbitration processes, managing the collective bargaining process, and work related to equal opportunity and affirmative action. 

Mr. Burns noted that the intent of the Board Orientation presentation was to provide the Board of Directors with an opportunity to meet the various division chiefs and to give a deeper understanding of the organization’s roles and responsibilities.   Mr. Burns stated that staff would be happy to provide any additional information requested by the Board of Directors that was not covered in the presentation.   Mr. Burns stated that staff will schedule tours of VTA facilities and will make sure to notify the Board Members of the tour dates.    

Board Member Kennedy commented on the reduction of staffing levels and asked about staff morale regarding the increase in workload and the effect of the staff reductions.  Mr. Burns responded that there are individuals concerned about the layoffs and increased workloads, but we have reached a level where individuals are beginning to recognize that further reductions are not imminent so morale is improving.   Mr. Burns commented that due to fiscal restraints there have been many reductions to employee programs, but staff is working to continue those programs without spending the levels of resources that were spent in the past.   Mr. Burns stated that the intent is to give employee recognition, participate in employee events, and reinvest in training.

Chairperson Chavez expressed appreciation and thanked staff for the Board Orientation Presentation provided to the Board of Directors.   Chairperson Chavez requested that staff schedule one-on-one meetings with the new Board Members.   Chairperson Chavez queried about the financial and organizational assessment audits and if they will address some of the issues raised today. 

Chairperson Chavez stressed the importance of the Standing Committees and recommended that Items of Concern and Referral to Administration be added to all Standing Committee Agendas in order to address and respond to questions and concerns quicker.

Mr. Signorino expressed support for many of the items discussed in the Recommended VTA Scenario, especially regarding the BRT projects.   Mr. Signorino expressed appreciation and support for Michael T. Burns, VTA’s new General Manager.  Mr. Signorino urged the Board of Directors to consider the expenses related to the BART project.   Mr. Signorino queried about the technology to inform customers when the next vehicle is coming.  Mr. Signorino asked if a clock will be installed there to show the time.  Mr. Barlow responded “yes” that a clock will be there to inform customers of the time and when the next vehicle is coming.

Jerry Carlson, Atherton Caltrain Subcommittee, urged the Board of Directors to allocate a portion of the proposed County sales tax to Caltrain operations as well as Caltrain Improvements.   Mr. Carlson stated that Santa Clara County benefits as much as San Mateo County for Caltrain’s services and expressed support for the long-term commitment of funds designated for Caltrain operations, which will provide more financial stability for the system.                      

On order of Chairperson Chavez, there being no objection, the Board Orientation was received.

Recommended VTA Scenario

Mr. Burns commented that this part of the meeting is for discussion of the ¼ Cent Sales Tax Expenditure Plan.   The Expenditure Plan is the updated plan contained in the December 23, 2005 Board of Directors Memorandum based on the new sales tax projections.   Mr. Burns emphasized that staff has used the same methodology throughout the entire process but with different inputs.  Mr. Burns stated that there are no projects in the completion plan at this time but noted that the Expenditure Plan will continue to include and maintain a completion plan in the event that conditions change.  Mr. Burns commented that the Expenditure Plan is modeled after the 1996 Measure B Transportation Improvement Program (MBTIP), which was very successful.

Mr. Burns continued that the Expenditure Plan along with the projections of taxable sales for VTA provided by Steven Levy, Center for Continuing Study of the California Economy (CCSCE), were presented to all VTA Advisory and Standing Committees in January 2006.   Mr. Burns noted that a summary of all the comments received from the committees, responses to questions, and correspondence has been included in the materials presented at the Friday, January 27, 2006 VTA Board of Directors Workshop Meeting.   Mr. Burns noted that the presentation was presented to Santa Clara County Board of Supervisors, the cities of Morgan Hill and Milpitas.  Mr. Burns stated that staff is scheduled to provide presentations to the cities of Gilroy, Cupertino, Monte Sereno, and Los Gatos over the next couple of weeks.  Mr. Burns noted that Mr. Collins will briefly review three of the presentation slides to provide a summary of what is in the Recommended VTA Scenario then the meeting will move into discussion.

Mr. Collins provided a power point presentation titled, “VTA Scenario January 2006”, Page 13 – VTA Scenario with New Projections.  Staff issued a new Expenditure Plan in December 2005.  Mr. Collins continued that the current plan:

• completes all 2000 Measure A Projects,
• provides a positive ending balance of $537 million,
• maintains Board Policy of 15 percent reserves for VTA,
• advances BART Project by two years to December 2016,
• advances Light Rail to Eastridge by 2012,
• advances Light Rail to Nieman by 2017,
• advances Light Rail to Los Gatos by 2012,
• accommodates Single Car Light Rail on Santa Clara/Alum Rock by 2021, if mode is selected as preferred alternative.

Mr. Collins referenced Page 14 – VTA Scenario with New Projections. 
The VTA Scenario:

• restores prior 10 percent funding cut to Caltrain,
• completes Caltrain Electrification by 2018,
• provides for Caltrain Service Improvements,
• provides for 8.4 miles of Caltrain double tracking in the South County by 2010,
• completes Dumbarton Rail by 2011,
• provides for Altamont Commuter Express (ACE) Upgrades between
  2014 and 2025,
• completes Airport People Mover (APM) by 2018,
• initiates Bus Rapid Transit (BRT) Projects on Line 22, Monterey Road, and Stevens Creek by 2011.

Mr. Collins referenced Page 15 - VTA Scenario Includes New Projects.  The Recommended VTA Scenario includes:

• new $718 million in local streets and roads, county roads and bicycle and pedestrian path improvement program,
• new $130 million BRT project in Sunnyvale/Cupertino,
• increases in current VTA service up to 24 percent by 2020,
• new Senior/Disabled Program about $2 million a year over the 30 year program, which equates to $90 million,
• $2.7 billion in BART operating subsidy to 2038.

Board Member Kennedy queried about Caltrain projects in the Expenditure Plan. 
Mr. Collins responded that the 10 percent funding cut to Caltrain was restored and Caltrain Electrification from Tamien to Gilroy is back in the Expenditure Plan.

Board Member Chu directed attention to the December 23, 2005 Board Memorandum, Page 6 of 7 and queried about the completion date for the Capitol Expressway Light Rail to Nieman project.   Mr. Collins apologized for the typographical error in the memorandum and noted that the Capitol Expressway Light Rail to Nieman project is completed by 2017.

Board Member Gage noted that the schedule of revenues coming in is very impressive but noted his concern regarding how accurate the figures are.   Board Member Gage stressed the importance of having a backup plan in the event that the revenue assumptions are not what everyone anticipated.   Board Member Gage commented that once the projects start moving forward it will be very difficult to place those projects on hold.  Board Member Gage asked if we are sure that the revenue coming in will cover all the projects that everyone would like completed. 

Mr. Collins responded that part of the process is to include an annual review of revenues and expenditures.   Mr. Collins stressed the importance that the ending balance be maintained at a higher level early on within the Expenditure Plan.   Mr. Collins continued that several Board Members queried about the revenue assumptions received from Mr. Levy, CCSCE, but noted that staff is starting to see increases in the revenue now.  Mr. Collins directed attention to the VTA Scenario January 2006, Slide 10 - Annual Sales Tax Projection and noted that only eight years of sales tax revenues were adjusted over the 30-year projections. 

Mr. Collins referenced Slide 11 – New Projections by VTA and noted that staff has not made adjustments to FY 2006 and FY 2007 so both years are 4.8 percent growth rate.   Mr. Collins stated that in FY 2008 the growth rate has increased to 5.7 percent, which is a .8 percent increase.   Staff has made those adjustments to match up with the new percent change in midpoint growth rate received from the CCSCE.  Mr. Collins noted that overall VTA’s percent change in growth rate range from .7 percent to 1.2 percent over a period of eight years.  Then VTA drops back to the 4.8 percent for the remaining 20 years from 2016 – 2036, which in the past has been VTA’s overall average of the ups and downs in sales tax revenues; therefore, staff does not consider the projections as aggressive.  Mr. Collins stressed the importance of making prudent projections and indicated that staff will continue to utilize the process of an annual review of revenues and expenditures to make adjustments to the program.

Board Member Campos queried about why the Santa Clara/Alum Rock project timeline has been pushed out.   Board Member Campos stated that she thought that the Santa Clara/Alum Rock project would link to the completion of the BART project. 
Mr. Collins responded that the Santa Clara/Alum Rock project is currently being studied from Downtown San Jose. 

Board Member Campos queried about the length of time required to complete the
Santa Clara/Alum Rock project.   Mr. Collins responded that the Santa Clara/Alum Rock project would take approximately 5 years to complete.

Board Member Campos queried about the timeline to start work on the Santa Clara/Alum Rock project from one end so that it links to the completion of the BART project.     Board Member Campos asked staff if they have considered this scenario and referenced the Downtown East Valley (DTEV) Policy Advisory Board’s (PAB) previous request that staff to look into the scenario.   Mr. Collins responded that the plan was rail and it would be five years after BART.  Mr. Collins continued that Santa Clara/Alum Rock would probably start around the time that the BART project is finished.  Mr. Collins stated that staff has not looked at a hybrid alternative but staff has the cost the entire budget by Downtown San Jose in this scenario.

Board Member Campos requested that the DTEV PAB receive a copy of the evaluation of both scenarios so that the DTEV PAB could review the information.   Chairperson Chavez stated that Board Member Campos is referring to the DTEV PAB’s request for an evaluation of both alternative scenarios.   Chairperson Chavez commented that the request was to address concerns regarding the use of light rail to the point of the Five Wounds Church since it is a very narrow area.  Chairperson Chavez expressed concern and noted that the DTEV PAB believed that staff was reviewing the request based on the direction of the DTEV PAB.  Mr. Burns responded that his understanding was that the next step in the process was the expanded public outreach but noted that he will forward the DTEV PAB request to staff for response.

Alternate Board Member McHugh queried about when the VTA Board of Directors will make a final decision regarding the preferred transportation mode for the Santa Clara/Alum Rock project.   Alternate Board Member McHugh stated that the DTEV PAB supports the Single Car Light Rail alternative.   Mr. Collins commented that there is one year left for the community outreach and evaluation of the alternative so the final decision is about 12 months away regarding the preferred alternative selection for the project.

Chairperson Chavez stated that the reason VTA is conducting the extensive public outreach is related to the circulation of the Environmental Impact Report (EIR), which is currently underway.

Board Member Williams expressed concern regarding safety issues along the corridor between San Jose, Gilroy, and Morgan Hill.   Board Member Williams referenced a recent accident involving a child hit by a train.   Board Member Williams queried about resources to address pedestrian crossovers to ensure safety for individuals.  Board Member Williams asked if any of the scenarios include project funds for pedestrian crossovers or bridges to address safety issues and concerns.  Mr. Burns responded “no” in terms of a specific project.  Pedestrian crossovers are not itemized in the Expenditure Plan.  Mr. Burns continued that projects such as this could be funded from the Bicycle and Pedestrian Improvement Program or Caltrain Improvement Program.  Mr. Burns noted that staff is seeking federal funding for that specific project but that project is beyond this particular Expenditure Plan.  Board Member Williams thanked staff for the information and stressed the importance of funding projects that address safety issues and concerns.  Board Member Williams noted that one of VTA’s highest priorities is safety.

Board Member Williams queried about the projections.   Board Member Williams noted that the CCSCE provides both low and high projections and asked how staff knows what projections to use.   Mr. Contreras responded that the CCSCE provides two projections, one projection is moderate and the other is conservative; therefore, staff takes the midpoint.   

Board Member Williams asked if staff has a confidence level based on experience and if staff believes that we are on the right path.   Mr. Contreras responded that VTA is conservative in terms of these projections.   Mr. Burns noted that VTA has not changed the methodology that was used throughout this process.

Board Member Sandoval asked for clarification regarding the Santa Clara/Alum Rock project and if the DTEV PAB is looking at the EIR for both possible transportation mode alternatives.   Chairperson Chavez responded that staff in advance of the community process presented a recommendation to the DTEV PAB with the preference for BRT along Alum Rock.   The DTEV PAB expressed concern that the public outreach process was still going on so everyone agreed to move forward with a very informed, intense, and educational process for that entire corridor. 

Board Member Sandoval stated that the EIR is reviewing both alternative positions for the project and noted staff’s recommendation of BRT but the DTEV PAB’s recommendation is Single Car Light Rail.   Chairperson Chavez responded “yes” that is correct. 

Board Member Sandoval queried about the BRT projects listed in the Expenditure Plan.   Ann Jamison, Congestion Management and Planning Deputy Director, responded that the original outline for potential BRT corridors on the Expenditure Plan were essentially preliminary lines drawn on the map.   Ms. Jamison noted a request to staff to look at all the corridors and determine the ones that were appropriate for advancing in a future timeframe with money that was available so staff is in the process of conducting an analysis at this point. 

Board Member Sandoval queried about BRT lines going through Coyote Valley and if it would be part of the service.   Ms. Jamison responded that part of the detailed analysis would be to get a handle on the routes but at this point in time it is simply shown as a line from San Jose along Monterey Road into Morgan Hill towards the Gilroy area.  Ms. Jamison stated that there is no specific timeline or route alignment but staff will look at this proposal.

Board Member Sandoval referenced the Sunnyvale/Cupertino BRT line and asked how does the cost of that line compare to the cost of the Monterey/Stevens Creek BRT line. Board Member Sandoval queried about a way to bring the Sunnyvale/Cupertino BRT on line prior to 2021.   Mr. Collins responded that it requires three years to bring the project on line.   Mr. Collins commented on the cost and noted that staff used the other project and factored in the mileage items into the conceptual or preliminary engineering on the Sunnyvale/Cupertino BRT line project.  Once staff has a better idea of what the scope of the project is then staff will be able to nail down the schedule and ultimate cost of the of the project.

Board Member Sandoval asked how the scope and cost of the project would change by having a line on the map.   Mr. Collins responded that conceptual or preliminary engineering construction costs associated with the project are important to know since it is difficult to determine the costs and other components related to the project. Mr. Collins noted that important details and components need to be worked out so staff took the estimate on the length for the line basis for BRT and multiplied the number by the length form the cities of Sunnyvale to Cupertino then arrived at the numbers at this juncture for the project.

Board Member Perry queried about the operating costs and asked if operating costs are expected to grow by inflation.   Mr. Contreras responded “yes”. 

Board Member Perry asked if operating costs are expected to grow by inflation, is the plan to hold employee wages constant for the next 30 years?   Mr. Contreras responded that there could be decreases and increases within 3.5 percent. 

Board Member Perry asked if the money is growing by inflation then staff is either holding employee wages constant, reducing staff, or there is a third option.   Mr. Tucker responded that staff can provide more specific information to the Board Members but staff has anticipated labor growth year to year relative to wages and benefits.   Mr. Tucker referenced the Transit Planning and Operations (TP&O) Committee Meeting discussion related to the organization providing services at a lower cost. 

Board Member Perry stated that in real terms the amount of money spent on operating is decreasing and VTA has not been able to achieve that in the past.   Board Member Perry noted that the ways to achieve this is if VTA fixes employee wages for the next 30 years or reduces staff.   Board Member Perry asked if VTA is going to reduce staff, have a decline in employee wages over the next 30 years,  or both and asked where the money  is coming from if not from those actions. 

Board Member Perry queried about the total costs to the Expenditure Plan to get Caltrain from the County line down to Lick with grade separation and pedestrian crossings.    Board Member Perry asked if VTA could afford to do that with significant service increases.   Mr. Burns requested clarification on the line limits for the grade separation.  Board Member Perry stated to Lick, or wherever it made sense to grade separate and if it made sense to go to Diridon Station.

Board Member Perry noted that the projected growth in real per capita in sales tax is
1.3 percent per year over the past 25 years.   Historically it has been 4 percent over the 25 years. Board Member Perry requested that staff explain Mr. Levy’s growth rate and why VTA’s is eight times more than the historic.   Mr. Contreras responded that staff will get back to the Board Members with the information.

Chairperson Chavez requested that staff get back to the Board of Directors with a response to Member Perry’s questions. 

Board Member Perry asked what is the cost of grade separation from the San Mateo County line to a reasonable point, such as Tamien.   Mr. Burns responded that staff will provide a range with a totally full grade separated design with some variations off that.  

Board Member Kerr stated that Caltrain is the Peninsula’s BART and noted the need for Caltrain to be fully grade separated all the way through.   

Board Member Kerr clarified the real wage issues and noted that benefits are growing at a substantially higher rate, health care is two or three times that amount, and California Public Employees’ Retirement System (CalPERS) contribution for pensions is going to have higher rates.   Board Member Kerr continued that if VTA were to use an inflation adjusted number for wages it would essentially be projecting declining real wages, the take home portion of the paycheck, and this is what Board Member Perry is referring to. 

Board Member Kerr stated that it is more appropriate to hold take home pay in constant real terms and to provide some appropriate guidance for total compensation for the higher rate of inflation.   Board Member Kerr queried about the $1.5 billion in revenue and asked if the money comes from sources other than the increase of the ¼ cent sales tax.  Mr. Contreras responded “yes” that is correct.   Board Member Kerr asked if the $1.5 billion is in 2003 dollars.  Mr. Contreras responded “no”.  Board Member Kerr asked if this is $2 billion in year of collection dollars.  Mr. Contreras responded “yes”. 

Board Member Kerr asked how does the windfall from VTA’s existing revenue streams compare to the amount available to VTA from the potential ¼ cent sales tax.   Board Member Kerr asked if VTA’s projections indicate that there would be a windfall or increase in available dollars over the next 30 years without passing an additional sales tax.   Mr. Contreras responded “yes” that is correct. 

Board Member Kerr stated that at various times in the past VTA has looked at projections to try and determine if VTA could make the figures work without a ¼ cent sales tax.   Board Member Kerr asked if there is a possible scenario that could reflect the increased revenue due to a better economy combined with the financial restraints implemented by the Board of Directors and the organization, which would allow VTA to complete most of the projects without a sales tax increase.   Mr. Contreras responded that the $2.2 billion is comprised of several pools of taxes including the 1976 ½ cent tax, Transit Development Act (TDA) ¼ cent tax, and 2000 ½ cent tax, which comprise the total of $1.7 billion in the year of collection. 

Board Member Kerr commented that the new projections provide the organization with a potential $1.7 billion in revenue for the next 30 years.   He asked, if VTA combined financial restraint with an improving economy, what would VTA be able to accomplish?   Mr. Burns asked if Board Member Kerr was requesting that staff go back to the September 2005 Scenario and run that with the new projections.  Board Member Kerr responded “yes”. 

Mr. Burns asked if Board Member Kerr wanted to see a scenario that excluded money for all of the new programs.   Board Member Kerr responded “yes” since these new programs and projects were not discussed last fall.   Mr. Burns responded that staff could provide the information to the Board of Directors.

Chairperson Chavez recommended that staff distribute the Ad-Hoc Financial Stability final report recommendations and noted that the information is very important for the new incoming Board Members.

Alternate Board Member McHugh left the meeting at 10:52 a.m.

Board Member Kennedy expressed concern regarding a fatality and an individual who was critically injured last week on the non-grade separation in Morgan Hill.   Board Member Kennedy stressed the importance of grade separations or total blockage to address the issues and stop these type of accidents. 

Board Member Kennedy thanked staff for the presentation to Morgan Hill City Council.   Board Member Kennedy noted that the goal of Morgan Hill is to find a solution that works for as much as of the County as possible.   The Morgan Hill City Council would like to see more specific statements and language on the issues in the VTA Scenario.  For example, the language mentions funding for expressways in the County but the South County does not have expressways.  Board Member Kennedy suggested that specific language be included in the Scenario in the form of a footnote with South County alternatives that are equivalent to the projects in the other parts of the County.  Board Member Kennedy stated that a footnote in the Scenario would help to build support for the plan.  He also indicated that the language regarding the Single Car Light Rail in the Santa Clara/Alum Rock project was important to provide a better level of comfort that those parts of the region are included in the plan.  

Member Kennedy asked staff to look at what other entities use as their source of sales tax projections and other fund sources so that VTA could use this information as a basis of comparison for establishing projections. 

Mark Brodsky, City of Monte Sereno Mayor and Policy Advisory Committee (PAC) Member, requested that staff include a copy of “Vote Against Another ¼ Cent Tax Scenario - Build All Measure A Without a Tax Increase” in the Board presentation.

Mayor Brodsky commented that at the last PAC Meeting a transit advocate complained that the scenario chose the most expensive and impractical route for BART.  Mayor Brodsky asked that the Board consider new improved technology instead of trying to work with a “40 year old system”.   Mayor Brodsky noted that all the 2000 Measure A Program projects can be completed without another tax increase if BART is placed on the most efficient route. 

Margaret Okuzumi, Bay Rail Alliance, requested to see the list of projects included on the completion plan.   Ms. Okuzumi referenced a bill pending in the Assembly that would exempt a portion of business-to-business sale tax, which would decrease the amount of sales tax revenues coming in.   Ms. Okuzumi urged the Board to seriously consider the negative impact of this legislation on sales tax revenues if the bill passes.  Ms. Okuzumi urged the Board to review her presentation included in the comment materials, which summarizes an alternative to extending BART to San Jose that will provide service directly to the airport, serving more, and requiring fewer transfers to the airport under the current VTA Scenario. 

Vice Chairperson Chu congratulated Yoriko Kishimoto for being elected as Vice Mayor of the City of Palo Alto.

Ms. Kishimoto, City of Palo Alto Vice Mayor and PAC Member, expressed appreciation to the Board of Directors for the “Full Participation, Full Information” Initiative.  Ms. Kishimoto stressed the importance of the topic since everyone wants their visionary and strategic investments included in the Expenditure Plan but noted that elected officials have a fiduciary responsibility to review the capital and operating budget, performance of potential investments, and make prudent recommendations.    Ms. Kishimoto commented that BART has been promised as a “magic bullet” by some to solve the Valley’s transportation woes but there is no such thing as a “magic bullet”.   Ms. Kishimoto continued that the problem is a complex, multi-variant one and the solution is the same.  BART could be part of the solution, but its cost to County taxpayers must be balanced with other needed investments and it must promise timely service to the most important destinations.  Ms. Kishimoto stated that it was important to learn from past mistakes and urged the Board of Directors to think about how to make transit smarter, less expensive, and more direct so it can become an effective part of every day travel.

Noel Tebo, Citizens Advisory Committee (CAC) Member, expressed appreciation to staff for the diligent work regarding the VTA Scenario and updates.   Mr. Tebo commented that the VTA Board Members have the difficult task of trying to find a way to fund all the approved projects. Mr. Tebo expressed concern regarding the BART project and noted that the details affect the entire scenario budget.    Mr. Tebo commented that the goal of BART to San Jose is fine, but “the Devil is in the details,” and the public did not vote for this costly Plan.  Mr. Tebo continued that the public wants a cost effective plan that is not drawn up by developers but designed by traffic engineers to maximize ridership at lower costs, to get most people to their jobs, reduce congestion, and serve more of Santa Clara County. 

Chairperson Chavez queried about the next steps.   Mr. Burns responded that staff will take the comments received, respond to specific questions, and provide information regarding the public meetings.   Mr. Burns stated that the expectation is that the Expenditure Plan will be agendized for the March 2, 2006 VTA Board of Directors Regular Meeting.

Board Member Perry asked staff to address the concerns regarding the sales tax projections and employee wage growth.   Board Member Perry noted that the CCSCE has wage growth projections for the Valley as a whole and requested that staff use that as VTA’s assumption for projecting VTA’s operator’s wages.   Mr. Burns responded that the numbers that CCSCE is using are for all of the jobs in the County, and the wages driving VTA costs are the operator wages.  Mr. Burns referenced the presentation and noted the point made was that the higher paying specialty-type jobs in the Valley are the jobs where wages are increasing.  Mr. Burns indicated that staff will take a shot at it, but noted concerns that it may not really be relevant to VTA specifically.  Mr. Burns stated that staff will ask Mr. Levy if the CCSCE has something specific for that area.

Chairperson Chavez recommended that all the information requested be sent two weeks prior to the March 2, 2006 VTA Board of Directors Regular Meeting.   Chairperson Chavez requested that Steven Levy, CCSCE, be available to attend the March 2, 2006 VTA Board of Directors Regular Meeting as well as the February 2006 Standing Committees.   Chairperson Chavez recommended that the questions raised at the February 2006 Standing Committees need to be responded to so that the Board Members will have a chance to review the information as quickly as possible.

Alternate Board Member Kline clarified that Board Member Kerr requested and
Mr. Burns agreed to bring back the September 2005 scenario without the ¼ cent sales tax since VTA has additional revenue projections.   Mr. Burns responded “yes” that the request is the previous scenario in September or beginning October using the current projections without the ¼ cent sales tax and without the programs added over the last five or six months.

Chairperson Chavez requested that staff provide the scenario memorandum that staff generated and not the City of San Jose’s scenario recommendations in response to staff’s generated scenario.   Mr. Burns asked Chairperson Chavez for clarification regarding the scenario.   Chairperson Chavez responded that the request is for scenario that staff generated before responding to the City of San Jose’s recommendations. 

Board Member Sandoval clarified that the document is the memorandum that the Board of Directors would have considered at the December 2, 2005 Board of Directors Regular Meeting that Board Member Kerr would like to see with the new projections.   Mr. Burns responded “yes”.  

Board Member Gage stressed the importance of clarity in relation to the ¼ cent sales tax regarding what is allocated for supporting the existing transit system.   Board Member Gage stated that the Ad-Hoc Financial Stability Committee did discuss the importance of maintaining funding allocated to support the existing service.   Board Member Gage discussed the importance of maintaining the current bus and light rail system since there are communities, such as the South County, that are dependent upon bus and light rail service.  Mr. Lawson responded that one of the things that staff tried to emphasize in the presentation to the various committees and city groupings is that VTA is looking at a ¼ cent sales tax to keep service at a level that is acceptable to the community and to address shortfalls for the projects.

Board Member Gage stated that it is important to complete the projects promised to the public and address the core projects before committing to other projects. 

Chairperson Chavez requested that the responses to the questions from the Board regarding the Recommended VTA Scenario and Expenditure Plan be forwarded to the February Standing Committee Meetings then at the March 2, 2006 VTA Board of Directors Regular Meeting.   Chairperson Chavez requested that staff distribute the material at least two weeks in advance to the March 2, 2006 VTA Board of Directors Regular Meeting.   Mr. Burns responded that the information will be provided to the Board of Directors as requested.

On order of Chairperson Chavez, there being no objection, the Recommended VTA Scenario was reviewed and discussed.

ADJOURNMENT

On order of Chairperson Chavez, there being no objection, the Board of Directors Workshop Meeting was adjourned at 11:23 a.m.

Respectfully submitted,

Michelle M. Garza, Board Assistant
VTA Board of Directors