MEMBERS PRESENT: John McLemore (Chair), Michael Burns, Jose Cisneros, Don Gage, Jim Hartnett Arthur Lloyd, Michael Nevin (left the meeting at 10:20 a.m.), Ken Yeager

MEMBERS ABSENT: Sophie Maxwell

MTC LIASON: Sue Lempert

STAFF PRESENT: Michael Scanlon, David Miller, Roger Contreras, Howard Goode, Chuck Harvey, Rita Haskin, George Cameron, Ian McAvoy, Susan Stark, Darrel Maxey, Gary Lambert, April Chan, Cheryl Cavitt, Martha Martinez, Jennifer Buhr

Chair McLemore called the meeting at 10:02 a.m. and led the Pledge of Allegiance to the flag.

PUBLIC COMMENT

Ed DeLanoy commented that it would be very interesting to see how the Baby Bullet and innovative skip stop transit service work out and expressed that he hopes for an increase in customer acceptance of Caltrain service offerings. Mr. DeLanoy noted that Caltrain's new timetable map pictures linking services with VTA light rail with BART to SFO. He commented that in regard to the VTA link, he suggested Milpitas be added. He hopes that the BART linking service to San Francisco and the East Bay, at least the starting portion from Millbrae, be included on future printings. He noticed that the Caltrain arrival announcement at Millbrae mentioned the BART connections to San Francisco and the East Bay. Additionally, the returning BART had a constructive message regarding Caltrain connections, which Mr. DeLanoy praised as fine establishments of the linking process for promoting connecting business.

Margaret Okuzumi, pertaining to the Transbay Terminal project and the problem with the developer of the vacant parcel at 80 Natoma, stated that this project cannot be compromised in any way. Any adjustments to the alignment to accommodate the developer's project will result in severely compromising the ability of the downtown extension to accommodate future high-speed rail and a high frequency of train service. She stated that the developer's engineers are not rail operations experts and the alternatives that they are suggesting negatively impact the capacity of the downtown extension, which is already severely constrained by existing limitations. Ms. Okuzumi stated that if the developer is not willing to adjust the design of its building then no accessible compromise exists and the TJPA must be able to meet to discuss these issues and to hire its own independent legal counsel as necessary.

Jeff Carter agreed with the comments from Ms. Okuzumi and noted that there will be a public hearing on June 8 at 4:00 p.m. in the San Francisco Supervisors Chambers. Additionally, Mr. Carter stated that he had previously suggested a six-month trial use of a $5 weekend pass to welcome people back to the service. Although he is aware of the two free weekends, he would also like to see the consideration of a weekend pass.

Norman Rolfe stated that he came to the meeting this morning in the wrapped train and it was hard to read the signs through the wrapped windows because vision is so obscured. He noted that San Francisco MUNI went out for a new contract for wrapped advertisement of its busses, which specifically states that the side windows can not be wrapped. Mr. Rolfe commented that if it is possible, the JPB should review its contract for advertising and include a provision stating the side windows cannot be wrapped.

Vaughn Wolffe expressed concern regarding the Baby Bullet and stated that he has not seen any ridership projection and questioned what the measure for success would be. Mr. Wolffe commented that other than BART, if something doesn't work, then it needs to be recognized and changed.

Paul Wendt stated that he also is concerned with the Transbay Terminal project and 80 Natoma. He feels that the 80 Natoma project will kill the Transbay Terminal project if it continues as planned and Caltrain riders will lose out the most because there will not be a terminal. Mr. Wendt commented that there also appears to be a conflict of interest because two of the JPB directors, Burns and Nevin, also serve on the TJPA board. He also stated that it appears that Director Nevin is delaying this problem.

Director Nevin reported that there was an appeal made by the developer at 80 Natoma. The appeal was to the Redevelopment Agency in San Francisco regarding its project and any possible conflicts with the rail line in the EIR that the TJPA and also the JPB voted on, which passed in a special joint meeting in April. Director Nevin clarified that there is no action for the TJPA to take until San Francisco Board of Supervisors hear that issue on June 8. Legally there is no action for the TJPA to take until after the Board of Supervisors meet. After said meeting, the TJPA will be holding either a special meeting on June 10 or will take the issue up at its regular meeting on June 17.

CONSENT CALENDAR

Norman Rolfe requested, from his public comment under the Executive Director's Report, that the minutes be revised to state that "…passengers can not see out them very well." Additionally Mr. Rolfe stated that his name was spelled incorrectly.

The Board unanimously approved the following items under the Consent Calendar:

1. Adoption of Minutes of May 6, 2004
2. Statement of Revenue & Expenses, April 2004

CHAIRPERSON'S REPORT

Chair McLemore reported:

• The Baby Bullet Kick-off event is tomorrow at 4th & King station. He, along with Senator Speier and Steve Heminger (MTC Executive Director) will be speaking. Mike Nevin will serve as the Master of Ceremonies.
• The appeals pertaining to the EIS/EIR for the Transbay Terminal project will be heard next Tuesday, June 8 in the San Francisco Supervisors Chambers.

MTC LIAISON REPORT (SUE LEMPERT)

• MTC is hosting its annual transportation award ceremony again this year. Ms. Lempert has nominated the Baby Bullet service for the award and urged fellow board members to also log onto MTC's website to nominate Baby Bullet, especially since it is an on-time and on-budget project.

REPORT OF CITIZENS ADVISORY COMMITTEE (CAC)

Brian Wilfey reported on the last CAC meeting:

• A letter was sent, care of Mr. Scanlon, to express encouragement and support to staff in response to the recent staff reductions.
• The May meeting was held at the historic Santa Clara station.
• Jay Commer, General Manager of Amtrak, was introduced. There was a very positive discussion on the future of Caltrain.
• There were some negative observations of the wrapped trains.
• The July meeting has been cancelled.

REPORT OF THE EXECUTIVE DIRECTOR

Michael J. Scanlon reported:

• An "I Make a Difference Award" was presented to Will Hastings of Amtrak.
• Recognized Director Yeager for his article written on the Baby Bullet in the Willow Glen Times.
• In response to the public comment received, Mr. Scanlon reiterated that the train wrapping is a pilot program and staff is listening to all the comments received. Additionally, Mr. Scanlon commented that there will be a six-month evaluation of the Baby Bullet schedules.
• Key Caltrain Performance Statistics:
1. April total ridership went from 717,937 to 715,165 riders, a .4 percent decrease.
2. April average weekday ridership was down 2.0 percent, from 28,886 weekday riders to 28,318.
3. April total revenue was off 5.8 percent from $1.79 million to $1.68 million.
4. On-time Performance decreased 7.6 percent with 86.4 percent for April.
5. April shuttle ridership had a decrease of 5.0 percent with 3,974 riders, down from 4,184.
• Rita Haskin, Chief Communications Officer, went through the timeline of Baby Bullet and Service Enhancements Activities. The kick-off event will be tomorrow, June 4, at 2:00 p.m. at the San Francisco station. The Caltrain Festival will be on Saturday, June 5 from 11:30 a.m. until 2:30 p.m. Free weekend service will run on June 5 & 6 and June 12 & 13. There will be station ambassadors June 5, June 7 and June 8. The San Jose Send-off will be on June 7 from 5:30 a.m. until 7:30 a.m.

Ms. Haskin commented that staff always looks at how many variables are being used at one time. There is concern when there are too many variables because it is hard to gauge which variable had the most effect.

Mr. Scanlon stated that he likes the idea of the $5 weekend pass. However, there are no intentions of making any changes within the six-month review period.

Mr. Scanlon continued to report:

• Recognized all staff that worked on the FY2005 Operating Budget. The budget is much tighter this year compared to past years. The proposed budget is not without risks. However, it was prepared with the customer in mind and it was important to present an attractive service to compel riders to come back and to enlist new riders as well. Staff will be particularly watching the fuel budget line. Mr. Scanlon cautioned that there may be a need for a temporary fuel surcharge as opposed to a fare increase.

Mr. Scanlon responded that that idea has been looked at in other locations. Each of the agencies buy enough fuel to have a significant amount of clout. However, in the current market, now is not the time. The American Public Transportation Association is currently doing a survey across the country to aid in devising the best practices for the current times.

Chair McLemore noted that the April statistics were outstanding with over 28,000 riders. He noted that there have been incremental improvements. Chair McLemore questioned how the average ridership projections, within the budgeting process, equate to the 28,000 riders.

Mr. Scanlon responded that staff will further research the question. However, preliminarily, 29,250 is the average number of riders for the year.

Mr. Scanlon further reported:

• The JPB has received new directives through the Department of Homeland Security, which will be administered through the Transportation Security Administration.
• Recognized the new Chief of Protective Services, Bill Pedrini.

• Recognized a letter submitted by Bruce Balshone on behalf of the JPB CAC. The letter expressed sympathy to those affected by the recent staff reductions. At the same time, the CAC sees a whole new world of service opening for Caltrain and thanked the board and staff for their contributions.
• The Monthly Safety and Security Report was distributed.
• Trial runs of the new service ran on May 15-16 and May 22-23.
• The Burlingame ticket station has been closed. There was a public meeting on May 25.
• Baseball service continues to attract riders. There have been excess of 3,400 riders per game.
• Suggested canceling the August board meeting.

ADOPTION OF FY2005 OPERATING BUDGET

Susan Stark, Director of Finance and Budget, reported that the item before the board is the request to approve the FY2005 Operating Budget. The budget packet was presented to the board at the May 6th meeting. Since that time, staff has contacted the board members individually for any questions or requests for additional information. Additionally, a redlined version of the report was presented. The redlined version literally prints out changes from the May 6 version in red ink. In this case, no financial information changed. The only changes to the budget were two typos on page 2 of the staff report, the inclusion of the member agency contributions table on page 3 of the staff report, and the deletion of verbiage that is no longer applicable in the resolution.

Director Burns, in regard to the lease/leaseback revenue projections, commented that it is his understanding that that completes the available funds in the bank in terms of lease/leaseback. He noted that there will need to be a source to backfill the funds in FY2006. Director Burns also questioned if the $3 million in the fiber optic funds were one-time or recurring.

Ms. Stark responded that the funds were one-time.

Director Burns stated that this item would also need a source in FY2006. He reinforced the comments that the proposed budget has a structural problem for future years.

Director Gage commented that he wants to make sure that there is a plan B for the budget, including areas that may have cuts if the JPB does not meet certain goals and expectations. He stated that the board needs to be able to react very quickly if ridership starts going down and be able to identify areas where the JPB can recover the money from.

Chair McLemore, because of potential constraints, questioned if it would be wise to give the board quarterly updates against some of the main goals and standards being used for the budget.

Mr. Scanlon responded that staff will be giving monthly updates within the statements of revenue and expenses. He reiterated that one of the main concerns will be fuel prices. Staff recognizes that there is an obvious need for much higher ridership.

Chair McLemore commented that within the monthly report, he would like to see staff outline the three main financial elements of concern and compare actual costs to budgeted amounts.

Mr. Scanlon noted that the budget is very basic. However, staff will prepare monthly reports to present to the board, knowing that the early months will probably be very tough.

Director Hartnett agrees that it is important to receive monthly reports. However, he also thinks that at some point, short of six months, there should be a time to be more reflective on the budget so that the reports don't become routine. He suggested readdressing not just the budget itself but also structural issues as well. Director Hartnett commented that he is more concerned about the out-year rather than the upcoming year. He hopes that within this coming year, there are early discussions to address structural issues that may come up.

Mr. Scanlon agreed with Director Hartnett's comments and stated that it should be something that should be done. As a reminder, Mr. Scanlon reported that the action taken today really isn't the final action until each of the three partner agencies get the budget approved. He said that the JPB needs to be looking at what is the proper way, should there be a dedicated revenue stream, to operate a regional rail service, other than going back to the three member agencies.

Director Burns questioned the insurance line item because the number in the budget is different than the number listed in the FY2005 Insurance Program.

Ms. Stark responded that the number is a projection at the time that the budget is adopted. The budget will be amended according to the actual contract.

Director Burns questioned if the action to be taken would be for the entire insurance program.

Ms. Stark responded that is correct.

Mr. Contreras, Chief Financial Officer, also stated that the insurance line item also includes other items such as claims expenses.

For the record, there was no public comment on this agenda item.

The motion to approve the FY2005 Operating Budget was unanimously approved, by roll call, and Resolution 2004-20 was adopted.

DISTRIBUTION OF FY2005 CAPITAL BUDGET

April Chan, Manager of Capital Programming & Grants, gave a PowerPoint presentation pertaining to the FY2005 Capital Budget. The presentation included an overview of the budget, goals and budget assumptions, highlights of the FY2005 capital programs, a breakdown by program categories and funding sources including member contributions. In general, the proposed FY2005 Capital Budget is $72,797,835. It includes Federal and State funding of $59,551,243 and local match requirement of $10,277,623. Per-Member local match requirement is $3,425,874. Additional amounts of $2,798,969 (San Mateo) and $170,000 (Santa Clara) are required to fund area-specific station improvements. Ms. Chan noted that this item was for informational purposes only and action would be at the July meeting.

Director Gage questioned why the JPB does not store fuel.

Darrell Maxey, Chief Engineer, responded that currently the fuel is brought in by tank trucks, which allows for a lot of flexibility. At CEMOF, staff is looking at continuing to bring it in by tank trucks but are also looking at whether it could be stored to eliminate the 12-cents per gallon surcharge.

Director Gage commented that with the new facility, if fuel could be stored, the JPB could take advantage of the fuel prices when they are lower.

Mr. Scanlon cautioned that even if the fuel is stored, there isn't the ability to stockpile it and there would need to be deliveries approximately every other day.

Director Gage noted that at least there wouldn't be the 12-cent surcharge.

Mr. Scanlon noted that staff will be looking at storage for fuel but will need to stay within the current budgeted amount for CEMOF and there has been an increase in the cost of steel.

Chuck Harvey, Chief Operating Officer, commented that at other SamTrans designed facilities, typically there would be four 20,000 gallon tanks in the ground so that 80,000 gallons could be stored. That amount allows for approximately four to five days of operations. Mr. Harvey stated that the problem with CEMOF is that there are environmental and cost concerns associated with underground storage. However, Mr. Harvey commented that the best idea for that facility would be to store a one to two-day supply probably above ground, which would eliminate the trackside fueling and surcharge, and have frequent deliveries.

Director Gage commented that he would like to see the calculation of the payback of the 12-cent surcharge versus the added investment to CEMOF to see what the return on investment (ROI) is.

Director Yeager recalled that fuel storage was an issue that arose in one of the community meetings and because of the close proximity of the neighborhood, it was understood that there would not be any fuel stored at the facility. Director Yeager also questioned how the rise in steel cost will affect the project.

Ian McAvoy, Chief Development Officer, responded that the project is still in final design phase of the facility. He noted that recently steel prices have increased significantly and although staff proposed to put brand new rail in the yard initially in the project budget, there may be an opportunity to use used rail in the yard, which could be a trade-off in cost by reducing the line item in rail. Staff will continue to monitor the costs of steel very closely.

Director Yeager questioned if the administrative building was still to be phased in.

Mr. Scanlon clarified that the administrative building is an option based on available funding.

Ms. Lempert stated that all the comments received today show how important it is to move toward electrification. She noted that it is a very difficult thing to store fuel because the neighbors are alert and sensitive to the issue.

Mr. Scanlon noted that one of the elements of the decision to not have storage at CEMOF was because the JPB adopted dual priorities including the Rapid Rail improvement to the infrastructure itself and also the electrification of the railroad. The vision of the board was to make sure the rail was electrified meaning the storage of fuel would be temporary.

APPROVAL OF FY2005 INSURANCE PROGRAM

Gary Lambert, Manager of Risk Management, reported that the Staff Coordinating Council (SCC) recommends that the board approve the Caltrain insurance program for FY2005 at a premium figure within the parameters of the FY2005 Operating Budget. While the coverage has not changed from FY2004, the cost is approximately $270,000 less this year than last year.

The motion to approve the FY2005 Insurance Program was unanimously approved, by roll call, and Resolution 2004-19 was adopted.

AUTHORIZATION OF FY2005 HOMELAND SECURITY FUNDING APPLICATION

April Chan, Manager of Capital Programming & Grants, reported that the Federal Department of Homeland Security is providing funding to California through the Governor's Office of Emergency Services (OES). The funding will help different transit agencies and will assist in the protection of critical infrastructure and emergency preparedness activities. The Staff Coordinating Council (SCC) recommends that the board authorize the Executive Director to submit a grant application to the Governor's OES. This grant is in the amount of $795,280. Closed circuit televisions will be included within the list of projects for use of this grant.

Francis Wong commented that there is a national controversy over, as part of transportation security, photography of fixed facilities and rolling stock of operating agencies. Mr. Wong was glad to see that there is not a photography ban being proposed from Homeland Security, especially since there are many tourists in the area who ride the transit.

The motion to approve the authorization of the FY2005 Homeland Security Funding Application was unanimously approved, by roll call, and Resolution 2004-18 was adopted.

APPROVAL OF JPB PROCUREMENT POLICY

Cheryl Cavitt, Director of Contracts & Procurement, reported that staff proposes that the board approve the JPB Procurement Policy and to grant authorization to the Executive Director, or his designee, to utilize the Procurement Manual recently approved by the San Mateo County Transit District. Approval of this action will update the Procurement Policy and provide a broad overview of procurement standards and methods that guide the JPB in obtaining goods and services in its day-to-day operation. This Policy serves as a foundation for a more detailed Procurement Manual.

Director Gage questioned what controls are in place for who is authorized to purchase items of smaller dollar amounts and how are those individuals checked.

Ms. Cavitt responded that the authorization to purchase is very tightly controlled by a published signature authorization that is updated by level in the organization and approved by the Executive Director. Individuals that are not on the list are not authorized to procure anything. There is control within the operational elements of the organization, which is not a part of this policy per se.

Director Gage questioned if audits are performed.

Ms. Cavitt responded that yes, inventory audits are routinely made.

Director Burns questioned whether this policy has any impact on Amtrak's procurements.

Ms. Cavitt replied that this is an internal policy so it does not have any effect on Amtrak.

Director Burns questioned if there is any difference in this policy versus previous policies.

Ms. Cavitt responded that only updates were made.

Director Burns commented that he is fully supportive of being consistent with the policy that SamTrans has.

The motion to approve the JPB Procurement Policy was unanimously approved, by roll call, and Resolution 2004-17 was adopted.

AUTHORIZATION TO ENTER INTO AN INTERAGENCY AGREEMENT FOR THE TRANSLINK PROJECT

Roger Contreras, Chief Financial Officer, reported that staff recommends authorization for the JPB to join a consortium of Bay Area transit properties to administer the Translink regional fare payment system as a General Member of the consortium. Staff further recommends authorization for the Executive Director to execute the Translink Interagency Participation Agreement on behalf of the JPB and to participate in joint agency decisions as a General Member of the Translink Consortium. Translink is a smart card, which is similar in size to a credit card, and will be accepted for fare payment on every participating transit vehicle and at every participating transit station in the region. Ultimate plans call for a full roll-out of Translink at all Caltrain facilities, and on all SamTrans busses in 2005. MTC will fund 100 percent of the capital costs for equipment and smart cards used in Translink and 50 percent of the operating costs for the first 10 years of the program. Other estimated costs are included in the FY2005 operating budget.

Director Gage questioned if this project was the same as the MTC presentation that was given to the JPB previously.

Ms. Lempert responded that this is the same project. MTC had a very successful pilot program. This card will be universal for people who change from one system to another, which will save people a lot of time.

Jeff Carter commented that there are no figures in the report as to what this program costs for either capital or operating. He stated that this represents a significant expenditure by MTC of scarce transit dollars and Mr. Carter questioned if it would really be beneficial to the riders. While the transfers may be easier, it would not be cheaper since Translink is simply a carbon copy of the Bay Area's fragmented fare system. He stated that there is no incentive for people to use multiple systems because it costs too much. Therefore, Mr. Carter recommended not entering into the agreement because there are a lot of shortfalls regarding Translink and he thinks that MTC would be better off to do a coordinated fare system prior to implementing Translink. Additionally, he has heard that there is going to be a joint Caltrain, BART and SamTrans monthly pass and he hopes that that is something that can be worked out, especially since BART currently does not offer a monthly pass. Lastly, Mr. Carter commented that he heard that the ridership increase at BART due to the reduction in parking fees at Peninsula BART stations has offset the loss of revenue that was received by the parking.

Ed DeLanoy stated that he is curious about the specifications as to what is set to be accomplished by interlaying fare collection.

Ms. Lempert commented that Translink is the first step in getting a unified fare system. If ridership is increased, it will be a step forward in making transportation more friendly in the Bay Area. She stated that time is money and one of the many reasons people don't use transit is because of the time it takes to get a ticket for different transit systems.

The motion for authorization to enter into an Interagency Agreement for the Tanslink Project was unanimously approved, by roll call, and Resolution 2004-16 was adopted.

QUARTERLY CAPITAL PROGRAM STATUS AND ELECTRIFICATION REPORT

Ian McAvoy, Chief Development Officer, reported that the key elements of this report are the North and South CTX projects, which are practically complete with the return of weekend service and the opening of Baby Bullet. For the CEMOF project, the site preparation and demo have been complete, the community wall is under construction, the track and signal work design package is complete and the facility construction is in the final design phase. The San Francisco Yard Improvements Project is underway with site preparation and fence construction. In San Jose Diridon, the platform improvements are almost complete. Mobilization of the Tunnel Rehabilitation Project, which was awarded recently, is expected very soon. Additionally, staff is moving quickly to try to resolve issues in Santa Clara to accommodate future rail traffic increases and eventually the elimination of the hold-out rule issue at the Santa Clara station. In regard to Electrification, the public meetings have been completed and staff is working on compiling all of the written and verbal comments that were received.

Mr. McAvoy stated that as part of his new job, he expects to improve the Quarterly Report, which may include the concept of stoplight reporting by having red, green and amber lights to show the health of projects in summary form.

Francis Wong questioned the progress of the Global Positioning System (GPS) Project, which has been on the report for many months.

Mr. Harvey responded that staff is working to complete design specifications for this project.

REPORT OF LEGAL COUNSEL

None.

CORRESPONDENCE

Previously distributed.

DATE/TIME OF NEXT MEETING

Thursday, July 1, 2004, 10 a.m. at the San Mateo County Transit District Administrative Building, 1250 San Carlos Avenue, San Carlos, CA 94070.

It was noted by Chair McLemore that the meeting would be at the San Carlos location and not in Santa Clara as the agenda suggested. Staff will be working on details to have the September meeting in Santa Clara.

ADJOURNED

Meeting adjourned at 11:21 a.m.