MINUTES OF THE FINANCE-AUDITING COMMITTEE

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BOX 9000, PRESIDIO STATION ♦ SAN FRANCISCO, CA 94129-0601 ♦ USA

March 12, 2015

MINUTES OF THE FINANCE-AUDITING COMMITTEE

Honorable Board of Directors Golden Gate Bridge, Highway and Transportation District Honorable Members:

A meeting of the Finance-Auditing Committee (Committee) of the Golden Gate Bridge, Highway and Transportation District (District) was held in the Board Room, Administration Building, Golden Gate Bridge Toll Plaza, San Francisco, CA, on Thursday, March 12, 2015, at 10:14 a.m., Chair Stroeh presiding.

(1) Call to Order: 10:14 a.m.

(2) Roll Call: Secretary of the District Amorette M. Ko-Wong.

Committee Members Present (5): Chair Stroeh; Vice Chair Pahre; Directors Cochran and Sobel; President Grosboll (Ex Officio).

Committee Members Absent (2): Directors Moylan and Yee.

Other Directors Present (4): Directors Arnold, Eddie, Fredericks and Sears.

Staff Present: General Manager Denis Mulligan; Secretary of the District Amorette Ko-Wong; Attorney Kimon Manolius; Deputy General Manager/Bus Transit Teri Mantony; Deputy General Manager/Ferry Division James Swindler; Director of Capital and Grant Programs Gayle Prior; Director of Budget and Electronic Revenue Jennifer Mennucci; Assistant Clerk of the Board Arit Butani.

Visitors Present: None.

(3) Authorize Budget Adjustment(s) and/or Transfer(s)

There were no actions requiring authorization.

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(a) Authorize Actions Relative to the Certifications and Assurances for the Low Carbon Transit Operations Program (LCTOP)

(i) Staff Report

In a memorandum to the Committee, Director of Capital and Grant Programs Gayle Prior, Auditor-Controller Joseph Wire, and General Manager Denis Mulligan reported on staff’s recommendation to authorize actions relative to the certifications and assurances for the low carbon transit operations program (LCTOP).

A copy of the staff report, with attachments, is available on the District’s web site or upon request from the Office of the District Secretary.

(ii) Presentation by the Staff

Ms. Prior briefly summarized the staff report. She mentioned that this item authorizes actions necessary in order to secure Low Carbon Transit Operations Program (LCTOP) grant funds to support transit capital and operating projects for Golden Gate Bridge, Highway and Transportation District and Marin Transit.

(iii) Action by the Committee

Staff recommended and the Committee concurred by motion made and seconded by

Directors COCHRAN/SOBEL to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the General Manager or his designee to execute for and on behalf of the District any actions necessary, including executing and submitting related certifications and assurances, grant applications and agreements relative to the FY 14/15 Low Carbon Transit Operations Program (LCTOP) administered by the California Department of Transportation.

Action by the Board at its meeting of March 13, 2015 – Resolution NON–CONSENT CALENDAR AYES (5): Chair Stroeh; Vice Chair Pahre; Directors Cochran and Sobel; President

Grosboll (Ex Officio).

NOES (0): None.

ABSENT (4): Directors Arnold, Eddie, Fredericks and Sears.

(b) Authorize Actions Relative to the Resolution of Local Support for the Transit Performance Initiative (TPI) Incentive Program

(i) Staff Report

In a memorandum to the Committee, Director of Capital and Grant Programs Gayle Prior, Auditor-Controller Joseph Wire, and General Manager Denis Mulligan reported on

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staff’s recommendation to authorize actions relative to the relative to the resolution of local support for the Transit Performance Initiative (TPI) Incentive Program.

A copy of the staff report, with attachments, is available on the District’s web site or upon request from the Office of the District Secretary.

(ii) Presentation by the Staff

Ms. Prior briefly summarized the staff report. She explained that the item authorizes actions necessary to secure TPI funds to support transit capital and operating projects for Golden Gate Bridge, Highway and Transportation District and Marin Transit.

(iii) Action by the Committee

Staff recommended and the Committee concurred by motion made and seconded by

Directors COCHRAN/SOBEL to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors authorize the General Manager or his designee to execute for and on behalf of the District any actions necessary, including executing and submitting related grant applications and resolutions of local support relative to the Transit Performance Initiative (TPI) Incentive Program administered by the Metropolitan Transportation Commission.

Action by the Board at its meeting of March 13, 2015 – Resolution NON–CONSENT CALENDAR AYES (5): Chair Stroeh; Vice Chair Pahre; Directors Cochran and Sobel; President

Grosboll (Ex Officio).

NOES (0): None.

ABSENT (4): Directors Arnold, Eddie, Fredericks and Sears.

(5) Approve Actions Relative to the Annual Review of Rule XI, Investment Policy, of the Rules of the Board

(a) Staff Report

In a memorandum to the Committee, Director of Fiscal Resources Alice Ng, Auditor-Controller Joseph Wire, and General Manager Denis Mulligan reported on staff’s recommendation to approve actions relative to the annual review of RULE XI,

INVESTMENT POLICY, of the Rules of the Board.

A copy of the staff report, with attachments, is available on the District’s web site or upon request from the Office of the District Secretary.

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(b) Presentation by the Staff

Ms. Ng briefly summarized the staff report. Ms. Ng stated that the above-mentioned action is for the upcoming fiscal year. She also stated that second action is for amendment to the investment policy. She further mentioned that one of the restrictions is that negotiable certificates of deposits (CDs) must be rated in one of the two highest rating categories by a Nationally Recognized Statistical Rating Organizations (NRSRO). Ms. Ng explained that staff recommends revising this restriction to allow investment in negotiable CDs in three of the highest rating categories. Moreover, she indicated that investment-grade securities rated in the two highest rating categories have become less available over the past few years because the rating agencies have recalibrated their rating systems. She also indicated that expanding the rating restriction on negotiable CDs to the top three rating categories (AAA, AA, and A) will allow the portfolio to capitalize on market opportunities without adding undue risk as well as be diversified into more issuers. Moreover, she mentioned that effective January 1, 2015, California Code §53601 authorized local governments in California to invest in certain supranational organizations.

(c) Action by the Committee

Staff recommended and the Committee concurred by motion made and seconded by

Directors PAHRE/COCHRAN to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors approve the following actions:

i. Renew the annual delegation of investment management authority to the Auditor-Controller for FY 15/16 as per RULE XI, INVESTMENT POLICY, Section E, Delegation of Authority, of the Rules of the Board, as provided for in California Government Code §53601; and,

ii. Approve an amendment to RULE XI, INVESTMENT POLICY, Section I, Permitted Investment Instruments, Subsection 3, Negotiable Certificates of Deposits (CDs), of the Rules of the Board,to permit investment in negotiable CDs that are rated in one of the three highest rating categories by a Nationally Recognized Statistical Rating Organizations (NRSRO).

Action by the Board at its meeting of March 13, 2015 – Resolution NON–CONSENT CALENDAR AYES (5): Chair Stroeh; Vice Chair Pahre; Directors Cochran and Sobel; President

Grosboll (Ex Officio).

NOES (0): None.

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6) Approve an Amendment to Rule XII, District Bank Accounts and Signatures, of the

Rules of the Board

(a) Staff Report

In a memorandum to the Committee, Director of Accounting Bette Joe, Auditor-Controller Joseph Wire, and General Manager Denis Mulligan reported on staff’s recommendation to approve an amendment to Rule XII, DISTRICT BANK ACCOUNTS AND SIGNATURES, of the Rules of the Board.

A copy of the staff report, with attachments, is available on the District’s web site or upon request from the Office of the District Secretary.

(b) Presentation by the Staff

Ms. Mennucci briefly summarized the staff report. Ms. Mennucci explained that staff recommended certain adjustments to Rule XII. She indicated that the Director of Fiscal Resources is to be added to the list, to replace the Director of Budget and Electronic Revenue. This would improve operational efficiencies. She further mentioned that staff also recommends updating the Supervising Accountant title to Accounting Supervisor, which is consistent with the District’s Table of Organization. Furthermore, Ms. Mennucci indicated that staff recommends that the Director of Fiscal Resources and the Accounting Supervisor be authorized to act in a dual authority role to make changes in the District's electronic banking business rules.

(c) Action by the Committee

Staff recommended and the Committee concurred by motion made and seconded by

Directors COCHRAN/SOBEL to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Finance-Auditing Committee recommends that the Board of Directors approve an amendment to Rule XII, DISTRICT BANK ACCOUNTS AND SIGNATURES, of the

Rulesof the Board, to revise the list of positions authorized to approve certain telephonic or electronic banking transactions.

Action by the Board at its meeting of March 13, 2015 – Resolution NON–CONSENT CALENDAR AYES (5): Chair Stroeh; Vice Chair Pahre; Directors Cochran and Sobel; President

Grosboll (Ex Officio).

NOES (0): None.

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