FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY … · trophy/plaque spending, South Orange County Economic Coalition membership for $18,000/year, IBTTA’s $33,000/year membership,

FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY BOARD OF DIRECTORS

AGENDA

March 12, 2015 10:30 a.m.

TCA Offices 125 Pacifica, Irvine, CA 92618

AGENDA DESCRIPTIONS The agenda descriptions are intended to give notice to members of the public 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 Puckett)

PLEDGE OF ALLEGIANCE (Acting Chairman Young) OATH OF OFFICE

Acting Chair Young will administer the Oath of Office to David Benavides, the new Director for the City of Santa Ana and Kerry Ferguson, the new Director from the City of San Juan Capistrano.

ROLL CALL Acting Chair Craig Young City of Yorba Linda Director Lisa Bartlett County of Orange, 5th District Director Tony Beall City of Rancho Santa Margarita Director David Benavides City of Santa Ana Director Kerry Ferguson City of San Juan Capistrano Alternate Lucille Kring City of Anaheim Director Mark Murphy City of Orange Director Shawn Nelson County of Orange, 4th District Director Charles Puckett City of Tustin Director Greg Raths City of Mission Viejo Director Scott Schoeffel City of Dana Point Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District Director Scott Voigts City of Lake Forest Director Kathy Ward City of San Clemente Ryan Chamberlain Caltrans, Ex-Officio Member

http://www.thetollraods.com/

F/ETCA Board Of Directors Agenda March 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 1-3) 1a. MINUTES OF THE BOARD MEETING – FEBRUARY 12, 2015 (Kathleen Loch, Clerk of the Board) FILE NO.: (2015F-001) ACTION: Approve Minutes. 1b. MINUTES OF THE SPECIAL BOARD MEETING – FEBRUARY 26, 2015 (Kathleen Loch, Clerk of the Board) FILE NO.: (2015F-001) ACTION: Approve Minutes. 2. FOOTHILL/EASTERN INVESTMENT REPORT (Howard Mallen, Director of Finance) FILE NO. (2015F-003) Enclosed are the monthly investment reports for the Foothill/Eastern Transportation Corridor

Agency (F/ETCA) as January 31, 2015. As of January 31, 2015, 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 F/ETCA Investment Policy.

ACTION: Receive and file. 3. RETAIL MARKETING AGREEMENT WITH HAGGEN OPCO SOUTH, LLC GROCERY

CHAIN (Patti Bond, Senior Operations Analyst) FILE NO. (2015J-009)

The Haggen grocery chain is coming to Orange County, California. TCA has engaged in business discussions with Haggen for the purpose of distributing TCA transponders at certain Haggen locations. This will improve customer service by making transponders more accessible to the public. The preliminary staff estimate of sales, based on the existing Costco and Albertsons retail programs, is that 40 new enrollments would be generated per month from the new stores. Given the preliminary analysis, customer services benefits and the opportunity to expand our retail marketing presence, staff recommends approval of this retail marketing agreement with Haggen.

ACTION: Authorize the chief executive officer to execute Contract No. K000994 with Haggen OPCO

South, LLC (Haggen) to distribute FasTrak® transponders through the Haggen grocery chain.


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IV. PRESENTATIONS (ITEMS 4-5) 4. TRANSPARENCY DISCUSSION (Mike Kraman, Chief Executive Officer) FILE NO. (2015J-013)

An article which ran in the Orange County Register on February 19, 2014, brought into question the Transportation Corridor Agency’s (TCA) compliance with a request from the State Controller in 2012 for compensation data. TCA did provide the data and has done so annually ever since. But it is disturbing that there could be a perception that TCA lacks in transparency. A number of Board Members were concerned about the reference in the article and Director Spitzer requested that the item be added to the agenda to allow the Board Members to have a discussion about transparency at TCA.

TCA strives to conduct business in a transparent manner guided by best practices. For example, TCA posts on its website (www.thetollroads.com) Board Meeting agendas and staff reports, executive and Board Member compensation, employee benefits, and financial information including monthly transaction and revenue tables, annual financial statements and approved budgets for the current and previous fiscal years. TCA also follows comprehensive procurement practices including a new online procurement system called Planet Bids. Toll rates are also available on the website.

5. TRAFFIC & REVENUE UPDATE (Dave Lowe, Acting Chief Engineer) FILE NO. (2015J-014)

Staff will present an overview of the tolling system layout and discuss elements of the current toll rate structure. Steven Abendschein of Stantec Consulting Services Inc., the agencies’ traffic and revenue consultant will then review the fiscal year-to-date impacts of the July 2014 toll rate changes to the system traffic and revenue.

V. BOARD BUSINESS (ITEM 6)

6. SIGNAGE ENHANCEMENTS – RESEARCH (Lisa Telles, Chief Communications Officer) FILE No. (2015J-007)

Qualitative and quantitative research is recommended to test the effectiveness of existing and proposed toll road signs communicating how to pay tolls and how drivers utilize the One-Time-Toll payment option. The research will support planned enhancements to on-road signage, and revisions to the website and online One-Time-Toll payment process to improve the customer experience. Staff is recommending that Trotta/Hansen, Inc., with research facilities in both Irvine and Marina del Rey, be awarded a contract to conduct the research as outlined in the staff report.

ACTION: Authorize the CEO to sign a letter agreement No. K000996 with Trotta/Hansen, Inc., in the amount not to exceed $24,500 to conduct consumer research for One-Time-Toll® signage and online payment process.

http://www.thetollroads.com/


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

• Introduction of Samuel Johnson, Chief Toll Operations Officer • Traffic & Revenue Update

DIRECTORS’ REPORTS AND NEW BUSINESS

(Craig Young, Acting Chairman)

• Ad Hoc Committees – Monthly Reports

VI. CLOSED SESSION No Closed Session items for discussion.

VII. FOOTHILL/EASTERN ADJOURNMENT

The next regularly scheduled meeting of the Foothill/Eastern Board of Directors is Thursday, April 9, 2015, at 10:30 a.m., TCA Offices, 125 Pacifica, Irvine, CA 92618.

FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY BOARD OF DIRECTORS

MINUTES

February 12, 2015 10:30 a.m.

TCA Offices 125 Pacifica, Irvine, CA 92618

I. CALL TO ORDER

The meeting was called to order at 10:46 a.m.

INVOCATION

(Director Raths)

PLEDGE OF ALLEGIANCE (Acting Chairman Allevato)

OATH OF OFFICE Acting Chairman Allevato administered the Oath of Office to John Tomlinson, the new

Alternate for the City of Dana Point. ROLL CALL Acting Chairman Sam Allevato City of San Juan Capistrano Director Lisa Bartlett County of Orange, 5th District Director Tony Beall City of Rancho Santa Margarita Alternate Denis Bilodeau County of Orange, 4th District Director Lucille Kring City of Anaheim Director Michele Martinez City of Santa Ana Director Mark Murphy City of Orange Director Charles Puckett City of Tustin Director Greg Raths City of Mission Viejo Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District Alternate John Tomlinson City of Dana Point Director Scott Voigts City of Lake Forest (Left @ Consent Calendar) Director Kathy Ward City of San Clemente Director Craig Young City of Yorba Linda Lisa Ramsey Caltrans, Ex-Officio Member II. PUBLIC COMMENTS

There were no public comments.

F/ETCA Board Of Directors Minutes February 12, 2015

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III. CONSENT CALENDAR (Items 1-4) Director Spitzer pulled Items 3 and 4 from the consent calendar. ACTION: Approve Consent Calendar Items 1-2. MOTION: Kring SECOND: Ward VOTE: Unanimous (with abstentions on Item 1 by Alternate Tomlinson and Director

Murphy) 1. MINUTES OF THE BOARD MEETING – JANUARY 8, 2014 (Kathleen Loch, Clerk of the Board) FILE NO.: (2015F-001) ACTION: Approve Minutes. 2. FOOTHILL/EASTERN INVESTMENT REPORT (Howard Mallen, Director of Finance) FILE NO. (2015F-003) Enclosed are the monthly investment reports for the Foothill/Eastern Transportation Corridor

Agency (F/ETCA) 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 F/ETCA Investment Policy.

ACTION: Receive and file. ITEMS PULLED FROM THE CONSENT CALENDAR: 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. There was no staff presentation on this item.


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Board discussion included: A summarization by Director Spitzer on the action taken from the San Joaquin Hills Board Meeting. Those discussions and action items included inquiries about trophy/plaque spending, South Orange County Economic Coalition membership for $18,000/year, IBTTA’s $33,000/year membership, Lisa Telles’ attendance at IBTTA’s Leadership Academy, and the $4,000 holiday lunch for TCA employees. Questions were raised regarding the dollar amounts for memberships and/or sponsorships; as an agency what are we getting for these monetary contributions, and how much other agencies pay in dues for these types of memberships? Director Spitzer noted that he does not like that the TCA is spending money on promotional/marketing materials and thinks the general public find this useless. Staff provided the rationale for support; therefore he will not oppose this item. Staff was instructed that all of these items be reviewed to determine whether TCA is consistent with other agencies.

MOTION: Spitzer SECOND: Kring Additional discussion: Director Kring stated that with regards to the tchotchkes, they are actually great forms of

advertising and all cities use them for promotional purposes. The City of Anaheim gives a tremendous amount of things away and I think all agencies do. It’s a form of advertising, it makes people feel good and it really doesn’t cost all that much for that little bit of advertising and I fully support this.

VOTE: Unanimous 4. 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.

There was no staff presentation on this item.


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Board discussion included: Director Spitzer summarized the discussion and action taken by the San Joaquin Hills Board on this item and their Board Meeting: This item was agendized for this agency and was presented to LAFCO yesterday. The Board of Supervisors had to approve the enabling legislation in order to allow all of the other agencies in our County to allow employees who are age 60 and older to opt out. This is an important discussion because we are all involved in pension reform, especially with the leadership of ACC-OC. Any time we do something in this regard we should make sure that the Board knows about it and the public knows about it. This proposal is to allow people who are 60 or older at the time they join our agency, the TCA, to elect to opt out of the retirement system. This saves the employee money and it also allows the agency not to have to make the employer contribution matching. It’s a win-win and when an employee decides that at a particular age that they probably won’t see the benefit of that payment because they don’t stay around long enough to vest. With OCERS you need five years to vest and they don’t want to make that commitment; they only want to work two or three years and they would never see the benefit of having to pay in to those contributions.

There is also an issue about this about reverse pick up. Most of the agencies have a reverse

pick up that’s all for one; one for all, so if you are 60 and older and you are paying in, you are helping offset the shortfall for all of the other employees that came before you. TCA does not have a reverse pick up and neither does OCTA. So that argument does not apply here because TCA does not have a revers pick up. I thought it was important for all of you to know that we are doing pension reform here at TCA.

MOTION: Spitzer SECOND: Murphy VOTE: Unanimous with one opposition from Alternate Bilodeau

V. PRESENTATIONS/CONSENT (ITEMS 5-6) 5. FOOTHILL/EASTERN TCA 1995 BOND REFUNDING UPDATE (Amy Potter, Chief Financial Officer) FILE NO. (2015F-006)

The 1995 bond refunding approved by the Board of Directors on January 8, 2015, was successfully executed on February 3, 2015, resulting in significant savings. The sale is scheduled to close on February 19, 2015. Continued favorable conditions in the municipal bond market and strong and diverse investor demand allowed the agency to refund $180 million of bonds, originally issued in 1995, at lower interest rates resulting in $30 million present value savings. The refunding did not increase debt service in any year and will not extend the principal payment dates. Along with approving the refunding transaction in January, the Board elected to monetize the savings in order to lock in the current low interest rates and reduce interest rate risk on potential future capital project financings. By utilizing these funds on qualified capital projects over the next three to five years, the agency will be able to preserve its unrestricted cash reserves.


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This item was presented by Amy Potter, Chief Financial Officer. Ms. Potter presented the results of the refunding transaction that the Board approved in January.

The agency was able to completely refund all of the 1995 bonds and replace them with the 2015

Bonds at a present value savings of $33.5 million and those funds will go into agency project fund. The market conditions were extremely favorable, rates continued to decrease after Board approval in January and since then, actually even on that day, they started to go back up and have been very volatile but by chance we timed it perfectly. We were able to save or monetize $33.5 million compared to the $18 million that staff had presented to you when you approved the transaction. We were also able to utilize bond insurance and Assured Guarantee, who had also been the insurer on some of the bonds as a result of the 2013 transaction, gave the agency a proposal that made economic sense, which saved additional money and contributed to that $33.5 million. As part of this transaction we eliminated the 1995 indenture and the capitalized interest account that went along with it and simplified the structure that we have today. In comparing to the parameters that were approved by the Board in January, present value savings you had indicated should be greater than 2% of refunded par and the result was 18.8%. The final maturity stayed the same as we had indicated it would be and the underwriters discount was to be less than 0.85% and we were able to negotiate a 0.79% rate.

The transaction itself was very well received by both the rating agencies and investors. The rating agencies all affirmed their ratings and Fitch was quoted as stating, “The ‘BBB-‘senior lien and ‘BB+’ subordinate lien ratings reflect the strength of the road service area, its role as a congestion reliever, F/ETCA’s demonstrated willingness to raise rates to meet bondholder covenants and a solid liquidity position combined with a moderate debt service profile – improved as a result of this (2015) refunding following last year’s major debt restructuring.”

With Moody’s, although the agency didn’t get the upgrade at this point in time, they had made

some very positive comments; “The rating outlook is stable based on recent improvement in traffic growth and increased revenue through toll increases; termination of the mitigation and loan agreement with SJHTCA and maintenance of stable levels of unrestricted liquidity and our expectation that traffic and revenue will continue to grow in tandem with the economic recovery in Orange County.”

Good response were received from the investors having participation of over 20 investors,

bonds were sold very quickly, and there were many first time investors, which was very good for the agency as well as our largest investors renewing their. So overall it was a very successful transaction and staff and our consultants are very pleased.

Director Spitzer acknowledged Ms. Potter for the hard work she has done for this agency, and having to work through very complex issues. Director Spitzer gave accolades not only to Ms. Potter, but to CEO Kraman, Director Bartlett, and the entire financial team who participated in this transaction. This was a long and hard earned achievement for this agency and it needs to be absolutely acknowledged today about how significant this is and how important those words by Fitch and Moody’s are to this agency.


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Acting Chair Allevato reported that Ms. Potter did a presentation on the refunding at his last council meeting and encouraged the other directors to have her come and share that presentation at their council meetings.

This was a presentation only item requiring no Board action. 6. SECOND QUARTER FISCAL YEAR 2015 BUDGET STATUS REPORT (Howard Mallen, Director, Finance) FILE NO. (2015F-005)

Through the end of the second quarter of Fiscal Year 2015, the Foothill/Eastern Transportation Corridor Agency received a total of $86.8 million in revenue or 54.3% of the annual budget. Net Toll Revenue was on target at 50.1%. Fees and Penalties, Development Impact Fees, Interest Earnings, and Other Revenue were above target at 55.1%, 75.3%, 96.2%, and 51.3%, respectively.

Total uses were at $94.8 million or 47.7% 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 34.4%, 46.4%, and 48.2%, respectively. Debt was at an expected 50.0%.

ACTION: Receive and file.

Howard Mallen, Director of Finance, provided the staff report and responded to questions. Additional information was provided by Amy Potter, Chief Financial Officer and Mike Kraman, Chief Executive Officer.

Board discussion included: Director Spitzer noted that a lot of time was spent on this item at

the San Joaquin Hills Board Meeting and requested that CEO Kraman encapsulate that discussion for the Foothill/Eastern Board and the direction that was taken with respect to AET, the violations, and how the TCA is going to deal with the call center issues.

CEO Kraman reported that there was a good discussion of some of the revenue numbers that

were presented and wanted to make sure that our violation revenue is really understanding the fees and the actual penalties that are noticed verses what gets assessed. It’s not the goal of the agency to build our budget on the back of the violations; we are here to collect toll revenue. We will be working that through the Toll Operations Committee and also considering customer service in our upcoming procurements both for the interim toll operations services provider as well as then the long-term, which are both in process.

Acting Chair Allevato requested that staff provided information as to the difference in amount

and penalties between the two agencies noting that the San Joaquin Hills Agency had exceeded the budget in that area because of additional penalties due to AET. He also questioned if the projections were better for the Foothill/Eastern Agency.

Howard Mallen responded that historically there has been a difference between the two

agencies and it’s relative to where violations have occurred.


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CEO Kraman added that in terms of the Foothill/Eastern it is more of a commuter route, where rental car tourism and infrequent users are a higher volume on San Joaquin Hills. We see that difference in the percentage of FasTrak accounts between the two routes and other indications that there is just more infrequent use of the San Joaquin Hills road.

CEO Kraman added that going forward; the fees and penalties will have their own line item in

the monthly Traffic and Revenue Report along with the details of the net toll. MOTION: Kring SECOND: Shea VOTE: Unanimous VI. BOARD BUSINESS (ITEM 7) 7. 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 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. Joyce Hill, Customer Service Director, provided the staff report and responded to questions.

Board discussion included: Director Bartlett gave a summation on this item from the San Joaquin Hills Board Meeting and provided the direction that was given to staff. She reported that a directive was given to staff to review the routine business expense section of the CAPS manual. Additional discussion involved the concerns about approving contract amendments that take the value of an RBE contract over $100,000, which puts the Board at risk when approving or amending a contract. The discussion was then referred to the Joint Procurement Ad Hoc Committee for further discussion.


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Acting Chair Allevato stated that because there are outstanding invoices, the San Joaquin Hills Board moved to approve the item for today to continue the work that is needed. MOTION: Shea SECOND: Puckett VOTE: Unanimous

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

CEO Kraman thanked Director Murphy for putting together a meeting with Enterprise Rent-a-Car. It was a good meeting and one of the areas of focus for the agency is to work better with the rental car companies and the tourist industry; this meeting was a huge help. A lot of the interface that we have with the rental car industry is through third party companies and Enterprise, to their credit, reached out through Director Murphy to say we just want to talk face to face; it was a great meeting. The TCA has a new Toll Operations Chief who will be starting on Tuesday, February 17. Samuel Johnson comes to us from SANDAG where he oversaw the I-15 Express Lanes and the State 125 Toll Road. He has great experience and we are excited about having him come on board and I am looking forward to all of you getting to know and work with Samuel.

• Traffic & Revenue Update

CEO Kraman reported that transactions for the agency were up 2% in January year over year and revenues were up 5.2%.

• All Electronic Tolling Update (Joyce Hill, Director, Customer Service)

Joyce Hill, Director of Customer Service, provided the Boards of Directors with an AET update. The downward trend in violation activity continued in January, with less first-time violations being issued. There was a discussion during the San Joaquin Hills Board Meeting about future moves and received direction on how to improve the overload calls to assist the people that can’t currently get through to a Customer Service Representative (CSR). We will work on that and bring back a report to both Boards next month. Chairman Allevato noted that Director Spitzer had some excellent comments regarding this issue during the San Joaquin Hills Board meeting and asked if he could summarize those for this Board.


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Director Spitzer stated that this Board in August of last year gave approval for $800,000 to hire 26 full-time employees. We learned this morning though that they haven’t been able to hit that number and it’s probably because they are not paying enough and there are other jobs that are taking people away. The daily customer calls are not getting answered and he is appalled that the TCA does not have a voicemail system in place for customers to leave a message. He suggested that there are many ways to be able to achieve an efficient way to do a voicemail set up. Director Spitzer quoted an OC Article that ran in November of 2014, where it was reported that there are 18,700 violations per day and this is unacceptable. The TCA also had $36.95 million of uncollected debt but it was lodged debt. It is the TCA’s responsibility for making it right for the customers and violators. Director Spitzer further noted that the 3M contract is expiring at the end of June and there will be no renewal. He requested that staff come up a short-term and long-term solution for this, whether it means increasing the amount of pay to hire the additional personnel needed to field the calls and contract out with companies that do collections on the short-term basis. Today we don’t have the ability for someone to leave voicemail when they call and they don’t always get responded to and are directed to a website. Staff is indicating and rightfully so, that the reason through AET that we are lodging this is to deter people from using our roads who are not going to pay and not having or making sure that the people who do pay understand that we are going after the people who don’t pay so we don’t create a disincentive or two different systems. But at the same time we should not, as Mr. Kraman said and I’m going to mark his words, we are not using our violations as a revenue stream for this agency. Staff is going to come back very quickly and try to give us some short-term solutions as we move towards the RFP process to deal with our call center in its entirety, which is in process now. Director Murphy questioned staff if the TCA is receiving more calls today than we did in January of 2014; are we improving or are we getting more calls and not responding. A customer service call center is not a new science at all and we cannot operate as though we are the only game in town. He questioned staff why it has taken the agency and 3M so long to figure out a solution to the call center because if we were in a for profit enterprise this issue would have been fixed a long time ago. The agency should be a little more serious about it rather than feeling good that it is not as bad as it used to be.

Allevato – Thank you Director Murphy and staff does have direction to come back within a very short time frame and tell us exactly what they are doing to address this issue.

DIRECTORS’ REPORTS AND NEW BUSINESS

(Sam Allevato, Acting Chairman)

• Leadership Elections

Acting Chair Allevato stated that since the previous Chair, Rhonda Reardon, was not re-elected to her city council, there has been a vacancy for that seat. He has been representing the agency as the Acting Chair and therefore, opened up the floor for nominations for the Chair position.


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MOTION: Director Spitzer nominated Sam Allevato SECOND: Kring There were no other nominations by the Board Members and by acclamation Director Allevato accepted the position of Chairman. He thanked his colleagues for their trust and faith in him to run this excellent Board. For the position of Vice Chair: MOTION: Director Puckett nominated Craig Young SECOND: Kring With no other nominations on the floor, Director Kring moved to close nominations and by acclamation Craig Young accepted the position of Vice Chair.

• Ad Hoc Committees – Monthly Reports

Joint Environmental Ad Hoc Committee Director Puckett reported the committee met on February 2 and among discussion was the TCA’s participation in an upcoming exhibit in Anaheim at the Muzeo. The exhibit’s theme is Grizzly Bears and Mountain Lions, with a focus on their natural history. The exhibit will be open to the public beginning in April through mid-September and will coincide with the completion of Phase 1 and 2 of the SR-241 Wildlife Safety Fencing Project. Also discussed was the need for continued patrol services in the agency’s Upper Chiquita Canyon Conservation Area. Patrol of the approximately 1,150-acre property is required to deter trespassing activities that cause damage to the site’s natural resources. The agency intends to use a blended approach for patrol services through the use of the OC Sheriff’s Mounted Enforcement Units and private patrols. A request for proposals to conduct private patrol services will be completed and the request to award the contract will be before the Foothill/Eastern Board in May of this year.

Joint Toll Operations Ad Hoc Committee Director Puckett reported the Joint Toll Operations Ad Hoc Committee met on February 11 to discuss the status of the CSC/VES procurement. The existing CSC/VES services contract expires on June 30th. The CEO briefed the Ad Hoc committee on the two RFP’s that TCA is using to solicit proposals from qualified firms to operate and maintain the legacy system while procurement of a replacement system is in progress. The RFP for the replacement system is currently undergoing industry review. Staff will bring the results of the industry review to the Ad Hoc committee in March for discussion.

Joint Marketing Ad Hoc Committee

Director Bartlett reported that since the January Board Meeting, the Joint Marketing Ad Hoc Committee had two meetings to discuss the marketing services contract. The first meeting took place on January 26, where staff presented an overview of the contract as well as performance reviews. A second meeting took place on February 11, where the marketing services firm provided information on their services and a final third meeting will take place on Tuesday, February 17, to determine next steps with the contract.


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• Ad Hoc Committee Appointments

Chairman Allevato reported that with respect to committee assignment and with the completion of the Foothill/Eastern Chair/Vice Chair elections at the following meeting, and having all of the city assignments with the exception of Santa Ana and Orange, the Chairs and Vice Chairs will be meeting to complete the committee assignments. It is also time to review and update the committees and the committee structure at TCA; therefore, the Joint Strategic Planning Committee will be tasked with reviewing the purpose and function for each TCA committee.

Director Kring thanked the Joint Environmental Ad Hoc Committee and CEO Kraman for supporting the grizzlies and mountain lions project at the Muzeo, which is across from Anaheim City Hall and on Anaheim Boulevard. Director Kring noted that admission to all of the Foothill/Eastern and San Joaquin Hills Board members will be at no charge when they visit the Muzeo. Director Spitzer commented on the new fencing along the SR 241 and about his concerns regarding the mountain lion habitat. There is inbreeding taking place within the mountain lion population and that is hurting the species because it is denigrating their DNA. So it’s very interesting from a scientific point of view but potentially very sad and very devastating. In order for the agency to retain our permit we need to stay on top of this issue. Additionally, Director Spitzer addressed the Chair and requested that during the revamping of the TCA committees, a committee be designated for the SR 241/91 Connector Project. He feels this project is going to be extremely important for this agency and most importantly it is going to be very important for regional mobility Director Young directed a question toward the CEO and Legal Counsel inquiring about joint board meetings stating that the Board was told a few months back that staff would come back to the Boards with a suggestion or a solution for this. Director Young feels the Foothill/Eastern Board is being cheated out of robust agenda item discussions in terms of regional issues because they are joint items and already vetted through during the San Joaquin Hills Board Meetings. Chair Allevato reported that construction was halted on the La Pata connection project yesterday and care was given as an ancient sea turtle and dolphin fossil were found at the project site. He applauded OCTA, who is the lead agency on the La Pata project, as they cordoned off that area and are building around it. It points out the care that transportation agencies, including our own, take when we find these fossils that we have not only displayed in our office but OCTA as well.

VI. CLOSED SESSION There were no Closed Session items for discussion.


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VII. FOOTHILL/EASTERN ADJOURNMENT

The meeting was adjourned at 11:45 a.m. The next regularly scheduled meeting of the Foothill/Eastern Board of Directors is Thursday, March 12, 2015, at 10:30 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 Craig Young, Acting Chairman Foothill/Eastern Board of Directors

TECHNICAL ADVISORY COMMITTEE --__ ,SAN JOAQUIN IDLLS OPS & FINANCECOMMITTEE __ FOOTIDLL/EASTERN OPS & FINANCE COMMITTEE __ SAN JOAQUIN HILLS BOARD OF DIRECTORS

X FOOTHILL/EASTERN BOARD OF DIRECTORS

NEXT BOARD MEETING DATE: March 12, 2015

File No. 2015F-001

SUBJECT: Minutes of the Special Board Meeting - February 26, 2015

STAFF RECOMMENDATION:

Discussion item only, no action necessary.

REPORT WRITTEN BY:

REVIBWEDBY:

Kristal Laboy, Executive Administrative Assistant (949) 754-3409

Engineering Environmental Communications/Public Affairs Finance Toll Operations

FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY SPECIAL MEETING OF THE BOARD OF DIRECTORS

CAPITAL IMPROVEMENT PLAN WORKSHOP

MINUTES

TCA Offices 125 Pacifica, Irvine, California

February 26, 2015

I. CALL TO ORDER

The meeting was called to order at 11:05 a.m.

OATH OF OFFICE

Chairman Allevato administered the Oath of Office to Veronica Carpenter, the new Alternate for 5th District, County of Orange.

ROLL CALL Chairman Sam Allevato City of San Juan Capistrano Vice Chair Craig Young City of Yorba Linda Alternate Veronica Carpenter County of Orange, 5th District Director Lucille Kring City of Anaheim Director Charles Puckett City of Tustin Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District ABSENT: Director Tony Beall City of Rancho Santa Margarita Director David Benavides City of Santa Ana Director Mark Murphy City of Orange Director Shawn Nelson County of Orange, 4th District Director Greg Raths City of Mission Viejo Director Scott Schoeffel City of Dana Point Director Kathy Ward City of San Clemente Director Scott Voigts City of Lake Forest There was not a quorum for this meeting. II. PUBLIC COMMENTS

There were no comments from the public.

Foothill/Eastern Board of Directors Meeting Minutes February 26, 2015

Page 2

II. BOARD BUSINESS

1. CAPITAL IMPROVEMENT PLAN PRESENTATION

David Lowe, Acting Chief Engineer provided the history and description of the Capital Improvement Plan (CIP). He then discussed the current projects with the CIP and items that have change that may affect future CIP needs. Discussion items:

• 241/91 Direct Connector Ramps Director Spitzer requested a check list of issues be developed and that all issues be worked through and resolved early in the process. These include:

o Evaluate whether there is a need for a 3rd party verification of the Traffic & Revenue Study since Stantec is working for all parties involved.

o Address the perceived issue that OCTA will have to raise tolls to create capacity o How will maintenance be handled for both connector and additional lanes on the

SR 91? o Maintenance cost assumptions in the T & R Study o Differing operation policies

Car pool pricing Set pricing vs. dynamic pricing License plate tolling

• Jeffrey Road

o Confirm if Jeffrey Road at SR241 is on or off the Master Plan of Arterial Highways.

• Wildlife Fencing o CEO Kraman directed to write a letter for the Board to educate other elected

officials of the importance of projects undertaken to protect the mountain lions in Southern California.

ACTION: Discussion item, no action required. IV. CLOSED SESSION

There was no need for a closed session.

Foothill/Eastern Board of Directors Meeting Minutes February 26, 2015

Page 3

V. ADJOURNMENT

The meeting was adjourned to the next regular meeting of the Foothill/Eastern Board of Directors on March 12, 2015, at 10:30 a.m. TCA Offices, 125 Pacifica, Irvine, CA.

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

DATE: March 12, 2015 TO: Foothill/Eastern Transportation Corridor Agency Board of Directors FROM: Howard Mallen, Director of Finance SUBJECT: Investment Reports STAFF RECOMMENDATION: Receive and file. BACKGROUND: The Foothill/Eastern Transportation Corridor Agency (F/ETCA) issues a monthly report to the Board of Directors to provide the overall investment profile and resulting performance of the investment portfolio. DISCUSSION: Compliance Enclosed are the investment reports for the F/ETCA for the month ended January 31, 2015. These investment reports reflect only assets held by the Trustee (Bank of New York), which include 1995 and 2013 indenture accounts and three non-indenture accounts. As of January 31, 2015, 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 F/ETCA Investment Policy. Portfolio Update Since December 31, 2014, the adjusted cost portfolio balance has decreased by approximately $52.5 million to $523.6 million. This decrease in January is primarily due to debt service payments of $60.9 million, construction and construction related expenditures of $1.6 million and toll operations related expenses of $2.5 million. The decrease is partially offset with toll revenue transfers of $11.3 million, receipts of development impact fees of $1.0 million and net interest income of $0.2 million.

F/E Investment Reports File No. 2015F-003 March 12, 2015 Page 2 The weighted average maturity of the F/ETCA portfolio is 3.38 years. The weighted average YTM (Yield to Maturity @ Cost) increased 29 basis points, from 1.71 percent on December 31, 2014 to 2.00 percent on January 31, 2015. The increase is primarily due to the maturing of lower yielding U.S. Agencies, which were used for the debt service payments. The market value of the portfolio is $36.9 million higher than adjusted cost at January 31, 2015. The majority of this difference is attributable to certain long-term, fixed income investments held in the debt service funds, which are structured so that securities mature to meet debt payments. The market values of these fixed income securities, which are currently yielding an average of 6.5 percent, have increased over the last five years due to the low interest rate environment. If interest rates were to increase the market value of these securities will fall as market values and interest rates move inversely on fixed income securities. The 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 71 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 medium-term corporate notes and 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 press release on January 28, 2015 after its Federal Open Market Committee (FOMC) meeting stated that information received since December suggests that economic activity has been expanding at a solid pace. Labor market conditions have improved further, with strong job gains and a lower unemployment rate, and underutilization of labor resources continues to diminish. Household spending is on the rise as a result of declines in energy prices. Inflation has declined further below the FOMC’s longer-run objective, largely due to declines in energy prices. Consistent with the its statutory mandate, the FOMC seeks to foster maximum employment and price stability. To support this mandate, the FOMC reaffirmed its view that the current 0 to ¼ percent target range for the federal funds rate remains appropriate. The FOMC is maintaining its existing policy of reinvesting principal payments from its holdings in agency mortgage-backed

F/E Investment Reports File No. 2015F-003 March 12, 2015 Page 3 securities and not increasing its holdings in Treasury securities at auction. This policy should help maintain accommodative financial conditions. According to the Bureau of Labor Statistics total nonfarm payroll rose by 257,000 in January, and the unemployment rate was little changed at 5.7 percent. Job gains occurred in retail trade, construction, health care, financial activities and manufacturing. The labor force participation rate rose by 0.2 percent to 62.9 percent for January. The employment-population ratio was little changed at 59.3 percent. As for the housing sector, Fannie Mae Chief Economist Doug Duncan stated in a January press release, “Our theme for the year, Economy Drags Housing Upward, implies that both housing and the economy will pick up some speed in 2015, but the economy will grow at a faster pace. Strength in the broader economy, accompanied by continued employment growth and income growth, should contribute to some improvement in housing activity this year.” 2015 is not expected to be a breakout year for housing, yet broad-based improvement is expected following a disappointing and uneven year for the housing recovery in 2014. Exhibits 1. Portfolio Summary – F/ETCA Indenture and Non-Indenture Funds

This report provides a summary of the F/ETCA 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).

2. Portfolio Summary Graph– F/ETCA Indenture and Non-Indenture Funds Asset Allocation Comparison – Market Value

This pie chart is a representation of the market value and related percentage of each asset category in the portfolio to the total portfolio. The investment policy and debt agreements specify percentage limitations on certain asset categories. At January 31, 2015, the agency holdings were all below the maximum percentage limits.

3. Fixed Income Holdings – F/ETCA Indenture and Non-Indenture Funds

This report provides a detailed description and the associated rating of each fixed income security held in the F/ETCA portfolio at January 31, 2015. This report includes all agency security holdings with the exception of money market funds and cash. All of the agency’s investments were rated at or above the minimum rating required per the agency’s investment policy and debt agreements.

F/E Investment Reports File No. 2015F-003 March 12, 2015 Page 4

4. Investment Definitions

This is a list of common terminology used to describe the agency’s investment portfolio. Staff has provided this glossary to assist the Board in their review of the agency’s investment practices.

BUDGET: N/A CONCLUSION: Enclosed are the monthly investment reports for the Foothill/Eastern Transportation Corridor Agency (F/ETCA) as of January 31, 2015. As of January 31, 2015, 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 F/ETCA Investment Policy. Attachments

Transportation Corridor AgenciesPORTFOLIO SUMMARY

Foothill Eastern Transportation Corridor AgencyJanuary 31, 2015

Adjusted PctSecurity Type Cost Market Value Assets Yield

Money Market & CashMONEY MARKET & CASH 15,965,065.67 15,965,065.67 2.85 0.00

15,965,065.67 15,965,065.67 2.85 0.00

Certificates of DepositCERTIFICATES OF DEPOSIT 992,000.00 992,956.29 0.18 0.75

992,000.00 992,956.29 0.18 0.75

Commercial PaperCOMMERCIAL PAPER 114,408,883.33 114,417,329.80 20.41 0.27

114,408,883.33 114,417,329.80 20.41 0.27

U.S. TreasuriesTREASURY NOTES 191,225,299.13 192,205,343.76 34.29 0.76TREASURY STRIPS 6,225,466.10 10,304,850.20 1.84 6.15RFCO STRIPS 90,510,297.40 122,226,058.19 21.80 6.49

287,961,062.62 324,736,252.15 57.93 3.09

U.S. AgenciesFHLB BOND 14,363,666.14 14,379,338.46 2.57 2.09FHLB DISCOUNT NOTE 4,700,543.27 4,703,071.20 0.84 0.24FNMA BOND 24,805,026.61 24,855,606.90 4.43 0.51FNMA DISCOUNT NOTES 3,005,372.34 3,006,024.00 0.54 0.22AGENCY BOND 24,805,097.17 24,869,988.83 4.44 0.88

71,679,705.51 71,814,029.39 12.81 0.93

Medium Term Corporate NotesCORPORATE NOTES-MEDIUM TERM 13,102,887.67 13,116,026.20 2.34 0.74CORPORATE BONDS 6,124,686.77 6,112,698.00 1.09 0.70

19,227,574.44 19,228,724.20 3.43 0.73

Municipal BondsMUNICIPAL BONDS 13,392,985.07 13,393,451.80 2.39 0.53

13,392,985.07 13,393,451.80 2.39 0.53

TOTAL PORTFOLIO 523,627,276.65 560,547,809.29 100.00 2.00

Exhibit 1

Money Market & Cash 2.85%

Certificates of Deposit 0.18%

Commercial Paper 20.41%

U.S. Treasuries 57.93%

U.S. Agencies 12.81%

Medium Term Corporate Notes 3.43%

Municipal Bonds 2.39%

FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY PORTFOLIO SUMMARY

INDENTURE AND NON-INDENTURE FUNDS JANUARY 31, 2015

MARKET VALUE $560.547,809

Exhibit 2

Transportation Corridor Agencies

FIXED INCOME HOLDINGS - SETTLED TRADESFoothill Eastern Transportation Corridor Agency

January 31, 2015

Date/Price

Adj.Unit Adjusted

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

CERTIFICATES OF DEPOSIT

AMERICAN EXPRESS

CENTURION C/D

02587dmm7 248,000 100.00 248,000.00 NA NA

0.750% Due 03-07-16

BMW BK NORTH AMER SALT

LAKE

05568p2u0 248,000 100.00 248,000.00 NA NA

0.700% Due 03-08-16

DISCOVER BK GREENWOOD

DEL

254671ku3 248,000 100.00 248,000.00 NA NA

0.800% Due 03-07-16

GOLDMAN SACHS BK USA

NEW YORK

38147JAU6 248,000 100.00 248,000.00 NA NA

0.750% Due 03-07-16

CERTIFICATES OF DEPOSIT Total 992,000.00

COMMERCIAL PAPER

Abbey National North America

LLC Commercial Paper

0027a1pt0 7,000,000 99.98 6,998,836.95 A-1 P-1

0.230% Due 02-27-15



0027a1qr3 3,000,000 99.97 2,999,089.82 A-1 P-1

0.210% Due 03-25-15



0027a1s59 28,300,000 99.94 28,281,721.24 A-1 P-1

0.250% Due 05-05-15



0027a1uv9 18,000,000 99.82 17,967,959.04 A-1 P-1

0.360% Due 07-29-15

Credit Agricole CIB Commercial

Paper

22533urw5 6,000,000 99.94 5,996,332.48 A-1 P-1

0.250% Due 04-30-15

Credit Agricole CIB Commercial

Paper

22533us12 25,000,000 99.94 24,984,547.21 A-1 P-1

0.250% Due 05-01-15

Natixis Commercial Paper 63873ks40 2,200,000 99.93 2,198,481.75 A-1 P-1

0.270% Due 05-04-15

Natixis Commercial Paper 63873ks57 25,000,000 99.93 24,981,914.84 A-1 P-1

0.280% Due 05-05-15

COMMERCIAL PAPER Total 114,408,883.33

TREASURY NOTES

U.S. TREASURY NOTE 912810fg8 285,000 133.19 379,582.12 AA+ Aaa

5.250% Due 02-15-29

U.S. TREASURY NOTE 912828RX0 3,592,000 100.01 3,592,272.18 AA+ Aaa

0.875% Due 12-31-16

U.S. TREASURY NOTE 912828gs3 42,860,000 108.41 46,464,920.41 AA+ Aaa

4.500% Due 05-15-17

U.S. TREASURY NOTE 912828hh6 42,860,000 108.91 46,680,901.17 AA+ Aaa

4.250% Due 11-15-17

U.S. TREASURY NOTE 912828kw9 5,500,000 103.51 5,692,959.80 AA+ Aaa

3.250% Due 05-31-16

1

Exhibit 3



January 31, 2015

Date/Price

Adj.Unit Adjusted


U.S. TREASURY NOTE 912828lp3 42,860,000 104.08 44,608,588.04 AA+ Aaa

3.000% Due 09-30-16

U.S. TREASURY NOTE 912828nk2 3,607,000 103.29 3,725,570.98 AA+ Aaa

2.500% Due 06-30-17

U.S. TREASURY NOTE 912828ru6 10,000,000 100.50 10,049,619.35 AA+ Aaa

0.875% Due 11-30-16

U.S. TREASURY NOTE 912828sj0 8,700,000 99.80 8,682,964.89 AA+ Aaa

0.875% Due 02-28-17

U.S. TREASURY NOTE 912828td2 7,400,000 99.98 7,398,621.29 AA+ Aaa

0.250% Due 07-15-15

U.S. TREASURY NOTE 912828ue8 1,672,000 98.23 1,642,478.35 AA+ Aaa

0.750% Due 12-31-17

U.S. TREASURY NOTE 912828ug3 5,172,000 99.93 5,168,548.28 AA+ Aaa

0.375% Due 01-15-16

U.S. TREASURY NOTE 912828vk3 1,678,000 99.31 1,666,504.53 AA+ Aaa

1.375% Due 06-30-18

U.S. TREASURY NOTE 912828vl1 5,474,000 99.96 5,471,767.75 AA+ Aaa

0.625% Due 07-15-16

TREASURY NOTES Total 191,225,299.13

TREASURY STRIPS

UNITED STATES TREAS SEC 912833pd6 4,499,000 47.48 2,136,119.02 AA+ Aaa

0.000% Due 05-15-27

U S TREASURY SEC STRIPPED 912833qb9 4,500,000 46.11 2,074,811.70 AA+ Aaa

0.000% Due 11-15-27

UNITED STATES TREAS SEC 912833wq9 4,500,000 44.77 2,014,535.38 AA+ Aaa

0.000% Due 05-15-28

TREASURY STRIPS Total 6,225,466.10

RFCO STRIPS

RESOLUTION FDG CORP FED

BOOK

76116ecc2 4,499,000 98.71 4,441,180.11 AA+ Aaa

0.000% Due 04-15-15


BOOK

76116ecd0 4,500,000 95.56 4,300,232.98 AA+ Aaa

0.000% Due 10-15-15


BOOK

76116ece8 4,500,000 92.52 4,163,209.02 AA+ Aaa

0.000% Due 04-15-16


BOOK

76116ecf5 4,500,000 89.53 4,028,838.99 AA+ Aaa

0.000% Due 10-15-16


BOOK

76116ecg3 4,500,000 86.71 3,901,881.61 AA+ Aaa

0.000% Due 04-15-17


BOOK

76116ech1 4,500,000 83.93 3,776,972.37 AA+ Aaa

0.000% Due 10-15-17


BOOK

76116ecj7 4,500,000 81.26 3,656,521.91 AA+ Aaa

0.000% Due 04-15-18

2

Exhibit 3



January 31, 2015

Date/Price

Adj.Unit Adjusted



BOOK

76116ecl2 4,500,000 76.21 3,429,517.92 AA+ Aaa

0.000% Due 04-15-19


BOOK

76116ecm0 4,500,000 73.79 3,320,519.68 AA+ Aaa

0.000% Due 10-15-19


BOOK

76116efs4 4,499,000 79.95 3,596,965.11 AA+ Aaa

0.000% Due 07-15-18


BOOK

76116efx3 4,499,000 68.13 3,064,965.66 AA+ Aaa

0.000% Due 01-15-21


BOOK

76116efy1 4,500,000 66.00 2,969,836.31 AA+ Aaa

0.000% Due 07-15-21


BOOK

76116efz8 4,500,000 64.01 2,880,284.61 AA+ Aaa

0.000% Due 01-15-22


BOOK

76116egt1 4,499,000 71.44 3,214,096.98 AA+ Aaa

0.000% Due 04-15-20


BOOK

76116egu8 4,500,000 69.17 3,112,589.21 AA+ Aaa

0.000% Due 10-15-20

RESOLUTION FDG CORP 76116egy0 4,499,000 61.12 2,749,703.80 AA+ Aaa

0.000% Due 10-15-22


BOOK ENTRY CPN

76116egz7 4,499,000 59.27 2,666,592.06 AA+ Aaa

0.000% Due 04-15-23


BOOK

76116eha1 4,500,000 57.49 2,587,118.57 AA+ Aaa

0.000% Due 10-15-23


BOOK

76116ehb9 4,499,000 55.79 2,509,849.59 AA+ Aaa

0.000% Due 04-15-24

RESOLUTION FDG CORP CPN

STRIPS

76116ehc7 4,500,000 54.16 2,437,023.22 AA+ Aaa

0.000% Due 10-15-24


BOOK

76116ehd5 4,500,000 52.60 2,367,185.43 AA+ Aaa

0.000% Due 04-15-25


BOOK ENTRY CPN

76116ehe3 4,499,000 51.05 2,296,754.81 AA+ Aaa

0.000% Due 10-15-25


BOOK

76116ehf0 4,500,000 49.46 2,225,900.42 AA+ Aaa

0.000% Due 04-15-26


BOOK

76116ehg8 4,500,000 47.94 2,157,172.23 AA+ Aaa

0.000% Due 10-15-26


BOOK

76116ehl7 4,500,000 42.40 1,907,808.85 AA+ Aaa

0.000% Due 10-15-28

3

Exhibit 3



January 31, 2015

Date/Price

Adj.Unit Adjusted



BOOK

76116ehm5 30,946,000 41.19 12,747,575.95 AA+ Aaa

0.000% Due 04-15-29

RFCO STRIPS Total 90,510,297.40

FHLB BOND

FEDERAL HOME LOAN BANK

BOND

3130a2fr2 6,200,000 100.01 6,200,351.95 AA+ Aaa

0.170% Due 06-30-15


BOND

3130a2rg3 2,015,000 100.03 2,015,547.45 AA+ Aaa

0.180% Due 07-29-15


BOND

313371nw2 3,000,000 100.92 3,027,502.47 AA+ Aaa

1.375% Due 12-11-15


BOND

313376zq1 1,700,000 100.03 1,700,465.26 AA+ Aaa

0.375% Due 03-13-15


BOND

313379dt3 495,000 100.25 496,246.12 AA+ Aaa

1.250% Due 06-08-18


BOND

3133834r9 580,000 100.10 580,565.77 AA+ Aaa

0.375% Due 06-24-16

FEDERAL HOME LN BKS 3133xxp43 345,000 99.42 342,987.10 AA+ Aaa

3.125% Due 03-11-16

FHLB BOND Total 14,363,666.14

FHLB DISCOUNT NOTE

FEDERAL HOME LOAN BANK 3130a0sd3 3,000,000 100.02 3,000,581.05 AA+ Aaa

0.375% Due 02-19-16

Federal Home Loan Bank Discount

Note

313384br9 1,700,000 100.00 1,699,962.22 AA+ Aaa

0.050% Due 02-19-15

FHLB DISCOUNT NOTE Total 4,700,543.27

FNMA BOND

FEDERAL NATL MTG ASSN 3135g0al7 15,300,000 102.00 15,606,123.75 AA+ Aaa

2.250% Due 03-15-16

FEDERAL NATL MTG ASSN 3135g0ye7 7,000,000 99.98 6,998,902.86 AA+ Aaa

0.625% Due 08-26-16

FEDERAL NATL MTG ASSN

M/T/N

3136g1bw8 2,200,000 100.00 2,200,000.00 AA+ Aaa 04-29-15

0.550% Due 07-29-16 100.00

FNMA BOND Total 24,805,026.61

4

Exhibit 3



January 31, 2015

Date/Price

Adj.Unit Adjusted


FNMA DISCOUNT NOTES

FEDERAL NATIONAL MTG

ASSOC

3135g0nv1 3,000,000 100.18 3,005,372.34 AA+ Aaa

0.500% Due 09-28-15

FNMA DISCOUNT NOTES Total 3,005,372.34

AGENCY BOND

FARMER MAC NOTE 30769qaa8 8,750,000 109.08 9,544,367.59 AA+ Aa1

5.125% Due 04-19-17

FARMER MAC NOTE 31315pj42 6,300,000 99.96 6,297,189.97 NR NR

0.600% Due 06-27-16

FEDERAL FARM CR BKS CONS 3133ea6k9 1,000,000 100.00 1,000,000.00 AA+ Aaa

0.410% Due 10-29-15

FEDERAL FARM CR BKS CONS 3133eaju3 3,040,000 100.78 3,063,732.04 AA+ Aaa

1.050% Due 03-28-16

FEDERAL FARM CR BKS CONS 3133edhj4 1,800,000 99.99 1,799,807.56 AA+ Aaa

0.930% Due 03-20-17

WORLD BANK BOND 45905upf5 3,100,000 100.00 3,100,000.00 AAA Aaa

1.760% Due 05-01-19

AGENCY BOND Total 24,805,097.17

MUNICIPAL BONDS

BAY AREA TOLL AUTH CALIF

TOLL

072024de9 4,000,000 105.32 4,212,644.76 AA Aa3 04-01-16

5.000% Due 04-01-16 100.00

CALIFORNIA STATE GENERAL

OBLIGATION BOND

13063a5c4 1,370,000 100.79 1,380,851.38 A Aa3

5.450% Due 04-01-15

NEW YORK ST URBAN DEV

CORP REV

650035j33 5,800,000 99.97 5,798,036.04 AAA Aa1

0.580% Due 03-15-16

NEW YORK ST URBAN DEV

CORP REV

650035ym4 1,000,000 100.15 1,001,452.89 AAA Aa1

0.550% Due 03-15-16

UNIVERSITY OF CALIFORNIA

REGENTS REVENUE BOND

91412GPX 1,000,000 100.00 1,000,000.00 AA Aa2

0.659% Due 05-15-16

MUNICIPAL BONDS Total 13,392,985.07

CORPORATE NOTES-MEDIUM TERM

INTERNATIONAL BUSINESS

MACHS

459200hb0 5,000,000 100.00 5,000,101.23 AA- Aa3

0.550% Due 02-06-15

METLIFE INSTL FDG II GLOBAL

RESTR

59157BAH5 3,100,000 100.04 3,101,176.21 AA- Aa3

1.625% Due 04-02-15

NEW YORK LIFE GLOBAL FDG

RESTR

64952WBH5 5,000,000 100.03 5,001,610.22 AA+ Aaa

0.750% Due 07-24-15

CORPORATE NOTES-MEDIUM TERM Total 13,102,887.67

5

Exhibit 3

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



January 31, 2015

Date/Price

Adj.Unit Adjusted


CORPORATE BONDS

UNITED HEALTH GROUP

MEDIUM TERM NOTE

91324PBS0 6,000,000 102.08 6,124,686.77 A A3

1.875% Due 11-15-16

CORPORATE BONDS Total 6,124,686.77

GRAND TOTAL 507,662,210.98

6

Exhibit 3

Exhibit 4

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.

Exhibit 4


DATE: March 12, 2015 TO: Foothill/Eastern Transportation Corridor Agency Board of Directors San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Patricia Bond, Senior Operations Analyst SUBJECT: Retail Marketing Agreement with Haggen OPCO South, LLC Grocery Chain STAFF RECOMMENDATION: Foothill/Eastern Transportation Corridor Agency (F/ETCA) Recommendation: Authorize the chief executive officer to execute Contract No. K000994 with Haggen OPCO South, LLC (Haggen) to distribute FasTrak® transponders through the Haggen grocery chain. San Joaquin Hills Transportation Corridor Agency (SJHTCA) Recommendation: Authorize the chief executive officer to execute Contract No. K000994 with Haggen OPCO South, LLC (Haggen) to distribute FasTrak® transponders through the Haggen grocery chain. BACKGROUND: Retail marketing of FasTrak accounts through the distribution of transponders has proven effective with the success of the Costco and Albertsons Retail Programs—currently attributing to over 14 percent of the new FasTrak enrollments per month. A retail environment to distribute transponders improves customer service by making account enrollment more accessible and convenient to the public. The potential of reaching customers when they are in the store allows TCA the ability to market to those individuals who want to become FasTrak customers, but have not yet enrolled. This proposal is part of an ongoing plan to increase the number of locations FasTrak transponders can be purchased. Currently customers can sign-up for a FasTrak account at one of our two customer service centers, online at thetollroads.com, through The Toll Roads mobile app, through a link on the American Automobile Association member website or by obtaining a transponder through retail distribution centers and activating online.

Retail Marketing Agreement with Haggen File No. 2015J-009 OPCO South, LLC Grocery Chain March 12, 2015 Page 2 of 4 DISCUSSION: TCA is engaging in business discussions with Haggen for the purpose of distributing TCA transponders at certain Haggen locations. Founded in 1933, Haggen is one of the Pacific Northwest’s leading grocery chains. In late 2014, Haggen entered into an agreement to acquire 146 stores as part of the divestment process of the Albertsons LLC and Safeway merger. In the Orange County area, the acquisition means Haggen would rebrand five Albertsons and six Safeway stores. The new Haggen stores will be transformed in phases during the first half of 2015. Currently, under the existing retail marketing agreement with Albertsons, TCA distributes transponders through 29 Albertsons stores located in the Orange County area. Haggen’s acquisition will affect five of these stores. TCA and Haggen are mutually in agreement to provide uninterrupted service of the distribution of transponders through these five stores. In addition, Haggen agreed to include the remaining six Safeway stores in the Orange County area, soon to be transformed to the Haggen grocery chain. The retail marketing program replicates the existing agreement with Albertsons. First, Haggen would pay TCA $33.50 per transponder. Then, a customer would pay Haggen $36.00 and would then activate the transponder on TCA’s website and receive a special incentive funded by TCA that would give the customer a total of $40.00 in prepaid tolls. At the time of activation, TCA would offer an additional incentive. If the new FasTrak customer selects electronic check as their replenishment method, a $5.00 incentive funded by TCA would be added, making a total incentive value of $9.00 for the new FasTrak customer. TCA, from time to time, may offer an additional incentive in prepaid toll credits upon account activation; such incentive is referred to as a “seasonal marketing promotion.” Program Details: Transponders would be distributed at the stores’ service desk or in prominent locations within the stores. A minimum order of 50 FasTrak account packages (Package) would be shipped to each store location. Each Package would contain the following: • One TCA transponder • Information booklet with:

– Registration instructions for establishing an account – FasTrak License Agreement – The Toll Roads Privacy Policy – and more, such as The Toll Roads map, Mobile App info, Frequently Asked Questions

• Mounting strips The Package would also include printing and labeling designed by TCA to encourage the new account holder to sign up for FasTrak with electronic check as the replenishment method to receive the additional $5.00 in toll credits.

Retail Marketing Agreement with Haggen File No. 2015J-009 OPCO South, LLC Grocery Chain March 12, 2015 Page 3 of 4 The proposed retail marketing agreement with Haggen is modeled after the Costco and Albertsons Retail programs. The program is designed to offer a convenient customer experience and an efficient distribution arrangement at the retail level. Regular monitoring of the distribution volumes and new account activities will be conducted by the staff to ensure success of the program. BUDGET: Haggen has agreed to reimburse all new collateral-related expenses incurred by TCA due to the Haggen’s rebranding. The cost of the transponders and incentives is included in regular business expenses. CONCLUSION: The Haggen grocery chain is coming to Orange County, California. TCA has engaged in business discussions with Haggen for the purpose of distributing TCA transponders at certain Haggen locations. This will improve customer service by making transponders more accessible to the public. The preliminary staff estimate of sales, based on the existing Costco and Albertsons retail programs, is that 40 new enrollments would be generated per month from the new stores. Given the preliminary analysis, customer services benefits and the opportunity to expand our retail marketing presence, staff recommends approval of this retail marketing agreement with Haggen. Attachment

Retail Marketing Agreement with Haggen File No. 2015J-009 OPCO South, LLC Grocery Chain March 12, 2015 Page 4 of 4

HAGGEN OPCO South, LLC

Orange County

New Division Address City Zip

2133 Haggen South 30922 South Pacific Coast Hwy Laguna Beach 92651

2135 Haggen South 21672 Plano Trabuco Rd Trabuco Canyon 92679

2137 Haggen South 21500 Yorba Linda Blvd Yorba Linda 92887

2202 Haggen South 25872 Muirlands Blvd Mission Viejo 92691

2171 Haggen South 3049 Coast Highway Corona Del Mar 92625

2172 Haggen South 25636 Crown Valley Parkway Ladera Ranch 92694

2173 Haggen South 30252 Crown Valley Parkway Laguna Niguel 92677

2201 Haggen South 3901 Portola Pkwy Irvine 92620

2203 Haggen South 28751 Los Alisos Blvd Mission Viejo 92691

2215 Haggen South 17662 17th Street Tustin 92780

2216 Haggen South 550 E First St Tustin 92780


DATE: March 12, 2015 TO: San Joaquin Hills Transportation Corridor Agency Board of Directors Foothill/Eastern Transportation Corridor Agency Board of Directors FROM: Lisa Telles, Chief Communications Officer SUBJECT: Signage Enhancements -- Research STAFF RECOMMENDATION: Foothill/Eastern Transportation Corridor Agency Recommendation: Authorize the CEO to sign a letter agreement No. K000996 with Trotta/Hansen, Inc., in the amount not to exceed $24,500 to conduct consumer research for One-Time-Toll® signage and online payment process. San Joaquin Hills Transportation Corridor Agency Recommendation: Authorize the CEO to sign a letter agreement No. K000996 with Trotta/Hansen, Inc., in the amount not to exceed $24,500 to conduct consumer research for One-Time-Toll signage and online payment process. BACKGROUND: With the conversion to all-electronic tolling in May 2014, hundreds of signs have been installed to inform customers about how to pay tolls with either a FasTrak® account, ExpressAccount® or with One-Time-Toll within five days after their trip. While most toll road drivers have set up an account to pay their toll electronically using a FasTrak transponder or a license-plate based ExpressAccount, a small percentage are unfamiliar with the One-Time-Toll payment option. In reaction to input from infrequent drivers and visitors, the Boards of Directors, in December 2014, approved a change order with HDR Engineering for design signage enhancements. The change order included Phase I (50%) of the cost for the design of the signs, securing approval from Caltrans and obtaining encroachment permits for installing the new signs. During the December 2014 discussion, Board Members requested that focus group research be conducted to test sign messages before design was finalized and to return the plans to the Boards of Directors for discussion.

Signage Enhancements Research File No. 2015J-007 March 12, 2015 Page 2 of 3 DISCUSSION: Staff issued an informal request for proposals to three firms on February 2, 2015. The firms were asked to provide their proposed methodology to test signage messaging, and the steps consumers would take when they saw the pay toll signage. Included in the scope was testing the customer experience in accessing thetollroads.com, the One-Time-Toll payment section of the website and usage of the One-Time-Toll forms. The firms were asked to submit a research plan with a not-to-exceed amount of $50,000 ($25,000 per agency). All three firms (Civic Resources Group; Fairbank, Maslin, Maullin, Mertz & Associates; and Trotta/Hansen, Inc.) submitted proposals by the due date. The proposals were evaluated by David Lowe, acting chief engineer, Lisa Ganz, manager of marketing, and Lisa Telles, chief communications officer, based on the following criteria:

• Proposed process outline and demonstrated understanding of TCA’s needs. • Proposed methodology in light of TCA’s stated objectives. • Proposed project schedule and ability to meet schedule. • Proposed plan value in relation to cost proposed.

Trotta/Hansen, Inc. had the highest score and provided a comprehensive research plan within the $50,000 budget to test signage that effectively communicates The Toll Roads’ payment processes, how consumers find and use online search tools to pay online, and how to ease the payment process on website, smart phone and tablet tools. Trotta/Hansen, Inc. methodology included three phases that included both qualitative and quantitative research: Phase I: Individual and in-depth qualitative interviews will be conducted with consumers not familiar with The Toll Roads in Trotta/Hansen, Inc. Los Angeles and Orange County facilities over three days. Interviewees will review existing and proposed signs for comment, discuss what they would do next, follow their online search to make a payment, access the website via desktop, mobile phone and tablet, and follow the process to pay a One-Time-Toll. Phase II: Drive alongs will be conducted where a person not familiar with The Toll Roads will drive the routes with a moderator and two observers in the car. After the drive along, participants will discuss their experience, review alternative signage for comment and be observed while accessing the website and mobile app to pay their tolls. Phase III: With the input from Phase I and Phase II, signage plans will be adjusted and tested through a quantitative web-based survey of 150 participants. The survey would include images of new signs and test for communication effectiveness.

Signage Enhancements Research File No. 2015J-007 March 12, 2015 Page 3 of 3 Trotta/Hansen, Inc. will provide video of all sessions, and a final report with research results and recommendations. Recommendations will be coordinated with HDR Engineering to address Caltrans signage regulations and requirements. Trotta/Hansen, Inc. was established in 1975 by Diane Trotta. Ms. Trotta has conducted research for major companies in virtually every segment of industry, including consumer goods and services, business-to-business, and healthcare. Trotta/Hansen Inc. owns and operates two focus group facilities located in Marina del Rey and Irvine. FUNDING: Funding to cover the cost of this project is included in the FY15 communications department budget. CONCLUSION: Qualitative and quantitative research is recommended to test the effectiveness of existing and proposed toll road signs communicating how to pay tolls and how drivers utilize the One-Time-Toll payment option. The research will support planned enhancements to on-road signage, and revisions to the website and online One-Time-Toll payment process to improve the customer experience. Staff is recommending that Trotta/Hansen Inc., with research facilities in both Irvine and Marina del Rey, be awarded a contract to conduct the research as outlined in the staff report.

PROCUREMENT SUMMARY REPORT File No. 2015J-007 Contract #: K000996 Title: Signage Enhancements -- Research Recommend Award To: Trotta/Hansen, Inc. Procurement Process

Type: Request for Proposal Award Criteria: Best Value Negotiated Price: $49,000 Proposal Results:

CONSULTANT NAME RANK SCORE (max = 300) PRICE*:

Trotta/Hansen, Inc. 1 259 $49,000 Civic Resource Group 2 253 $49,140 Fairbank, Maslin, Maullin, Metz & Associates (“FM3”) 3 243 $42,835

* See below Compensation note as to Trotta/Hansen, Inc.’ proposed price.

EVALUATION CRITERIA

MAXIMUM POINTS Trotta/Hansen Civic Resource

Group FM3

Proposed process outline; demonstrated understanding of TCA’s needs.

60 53 56 47

Proposed methodology in light of TCA’s stated objectives.

90 80 78 65

Proposed project schedule and ability to meet that schedule.

60 49 41 58

Proposed plan’s value in relation to the cost proposed.

90 77 78 73

Total: 300 259 253 243

Vendor Sourcing: Communications and Public Affairs provided Contracts with the above listed proposers. Contracts staff forwarded informal RFP No. K000996 to each proposer. Compensation: Trotta/Hansen, Inc. proposed a $46,000 contract price, plus or minus 10%. Subsequent negotiation established the contract’s not-to-exceed value at $49,000. This price is all inclusive and is acceptable to TCA. Indemnification: The contract contains standard indemnification language previously approved by legal counsel.

Documents

FOOTHILL/EASTERN TRANSPORTATION CORRIDOR AGENCY … · trophy/plaque spending, South Orange County Economic Coalition membership for $18,000/year, IBTTA’s $33,000/year membership,