Governance and Audit Committee Thursday, February 2, 2017 MINUTES CALL TO ORDER The Regular Meeting of the Governance and Audit Committee ( Committee ) was called to order at 4:03 p.m. by Chairperson Bruins in Conference Room 157, County Government Center, 70 West Hedding, San Jose, California. 1. ROLL CALL Attendee Name Title Status Jeannie Bruins Chairperson Present Cindy Chavez Member Present Glenn Hendricks Member Present Sam Vice Chairperson Absent Teresa O Neill Member Present A quorum was present. 2. PUBLIC PRESENTATIONS: Roland Lebrun, Interested Citizen, expressed concern with light rail and Caltrain connections. 3. ORDERS OF THE DAY Member O Neill arrived at the meeting and took her seat at 4:05 p.m. There were no Orders of the Day. CONSENT AGENDA 4. Regular Meeting Minutes of November 30, 2016 M/S/C (Chavez/Hendricks) to approve the Regular Meeting Minutes of November 30, 2016. 5. Policy Advisory Board Appointments M/S/C (Chavez/Hendricks) to approve appointments to VTA s Policy Advisory Boards. NOTE: M/S/C MEANS MOTION SECONDED AND CARRIED AND, UNLESS OTHERWISE INDICATED, THE MOTION PASSED UNANIMOUSLY.
6. Bicycle & Pedestrian Advisory Committee Appointments M/S/C (Chavez/Hendricks) to ratify appointments to the Bicycle & Pedestrian Advisory Committee for the two-year term ending June 30, 2018. 7. Ethics Hotline Quarterly Summary Report Member Chavez indicated there was an error in the attachment and wanted to ensure it was clear for the record that there were three reports via website and not two. M/S/C (Chavez/Hendricks) to receive and review the Auditor General's Ethics Hotline Quarterly Summary Report. 8. 2017 Governance and Audit Committee Meeting Schedule M/S/C (Chavez/Hendricks) to approve the 2017 Governance and Audit Committee Meeting Schedule. 9. Timekeeping and Payroll Process Review Member Chavez commended staff for their work in completing the project. review and receive the Auditor General's follow-up report on the implementation status of management's action plans contained in the Timekeeping and Payroll Process Review. 10. Investment Program Controls Internal Audits Member Chavez commended staff for their work in completing the projects. review and receive the Auditor General's follow-up report on the implementation status of management's action plans contained in the Investment Program Controls Internal Audits performed during Fiscal Years 2013 and 2015. APPROVED - Agenda Items #4-10 REGULAR AGENDA 11. 2016 Measure B Citizens Oversight Committee Appointment Process Jim Lawson, Director of Government Affairs and Public Relations, provided a brief overview of the staff report, highlighting the purpose of the committee, committee composition, and the application and appointment process. Member Chavez made the following recommendations: 1) add regional representation as a goal; and 2) offer committee members training on bond oversight and other relevant topics. Governance and Audit Committee Minutes Page 2 of 5 February 2, 2017
Member Chavez indicated she can provide the information to staff on a company that provides training. Nuria I. Fernandez, General Manager and CEO, and Committee Staff Liaison, indicated staff is working to have the committee in place by July 2017 which is when the first report of revenues is expected. Public Comment Mr. Lebrun requested Committee Members be required to be a resident of Santa Clara County. Staff responded the current requirement is a registered voter in Santa Clara County. M/S/C (Hendricks/Chavez) to submit a recommendation to the Board of Directors to approve the process for appointments to the 2016 Measure B Citizens Oversight Committee with training on bond oversight and an additional goal of regional resident representation, as amended. APPROVED - Agenda Item #11 12. Express Lane Funding and Operations Assessment Pat Hagan, Auditor General s Office, and Corey Saunders, Deputy Auditor General, provided a brief overview of the staff report. The Committee discussed the following: 1) funding implications; 2) beneficial impacts; 3) prioritization of projects; 4) creative funding and other opportunities. Ms. Fernandez indicated all infrastructure projects will be going to the Capital Projects Oversight Committee (CPOC), and Administration and Finance (A&F) will be making recommendations on financing and funding and what investments need to be made to generate revenue. Chairperson Bruins stressed the importance of understanding dollars for toll roads and what they can be used for. review and receive the Auditor General's report on the Express Lane Funding and Operations Assessment. APPROVED - Agenda Items #12 Governance and Audit Committee Minutes Page 3 of 5 February 2, 2017
13. Internal Audit Work Plan Mr. Saunders provided an overview of the report, noting the IT Development and Project Management Assessment item was complete, but was moved to the March 2017 meeting to allow adequate time to fully discuss the item. He provided a brief overview of the work plan, noting the types of items that are reviewed by the Committee. On order of Chairperson Bruins and there being no objection, the Committee received an update from Auditor General Office staff on the status of projects contained in the current Internal Audit Work Plan. 14. Fiscal Year 2018 & Fiscal Year 2019 Biennial Budget Assumptions Carol Lawson, Fiscal Resources Manager, provided a brief overview of the staff report, highlighting several areas, including: 1) service and fares; 2) sales taxes; and 3) wages. She provided a schedule for outreach, committee review, and Board adoption. Member Chavez requested the following: 1) matrix showing all funding sources and uses; 2) provide a pie chart showing how much money is being invested in operations activities versus capital activities; 3) options available to VTA in terms of timing of expenditure; 4) illustrate the financing costs and the implications over the 30 year horizon; and 5) present capital costs in a simple and easy to understand format. On order of Chairperson Bruins and there being no objection, the Committee reviewed the Fiscal Year 2018 & Fiscal Year 2019 Biennial Budget Assumptions. 12. Express Lane Funding and Operations Assessment (continued) Raj Srinath, Chief Financial Officer, indicated the financing plan for SR 237 Phase II project was underway and the Request for Proposal (RFP) was being released. Member Chavez suggested outreach be done to solicit medium sized banks. 15. Internal Audit Program's Audit Dashboard Meeta Podar, Audit Program Manager, provided a brief overview of the report and a presentation, highlighting: 1) Background; 2) Implementation status; and 3) Status of recommendations due for implementation by area of responsibility. On order of Chairperson Bruins and there being no objection, the Committee reviewed and received the Internal Audit Program's Audit Dashboard on the status of implementation of recommendations issued by the Office of the Auditor General. OTHER ITEMS 16. Items of Concern and Referral to Administration Chairperson Bruins requested staff meet with new members and provide an overview of the Committee. 17. Review Committee Work Plan Ms. Fernandez briefly discussed items scheduled for the March 2017 meeting including the results of the 2016 Board self-assessments. Governance and Audit Committee Minutes Page 4 of 5 February 2, 2017
On order of Chairperson Bruins and there being no objection, the Committee reviewed the Committee Work Plan. 18. Committee Staff Report There was no Committee Staff Report. 19. Chairperson's Report Chairperson Bruins welcomed Directors Hendricks and O Neill to the Committee. 20. Determine Items for the Consent Agenda for Future Board of Directors' meetings CONSENT: Agenda Item # 9., Review and receive the Auditor General's follow-up report on the implementation status of management's action plans contained in the Timekeeping and Payroll Process Review. Agenda Item #10., Review and receive the Auditor General's follow-up report on the implementation status of management's action plans contained in the Investment Program Controls Internal Audits performed during Fiscal Years 2013 and 2015. Agenda Item #11., Approve the process for appointments to the 2016 Measure B Citizens Oversight Committee highlighting training and the goal for regional resident representation. Agenda Item #12., Review and receive the Auditor General's report on the Express Lane Funding and Operations Assessment. Agenda Item #15., Review and Receive the Internal Audit Program's Audit Dashboard on the status of implementation of recommendations issued by the Office of the Auditor General. REGULAR: 21. ANNOUNCEMENTS There were no Announcements. 22. ADJOURNMENT On order of Chairperson Bruins and there being no objection, the Committee was adjourned at 5:04 p.m. Respectfully submitted, Menominee L. McCarter, Board Assistant VTA Office of the Board Secretary Governance and Audit Committee Minutes Page 5 of 5 February 2, 2017