Business Member Board of Governors
Annual Meeting/Retreat
January 20-21, 2005
Minutes
Chair Kim Green called the meeting to order on Thursday, January 20, 2005.
Present were Board Members: John Barberis, Patricia Biedar, Linda Bohlinger,
Raul Bravo, Frank Di Giacomo, Nuria Fernandez, Bernard Ford, Kim Green, Sharon
Greene, Delon Hampton, Cliff Henke, Del Komejan, Saundra Lautenberg, William
Lochte, Brian Macleod, Reba Malone, Larry Miller, Jolene Molitoris, Don Nelson,
Stephanie Pinson, Jerry Premo, Dan Reichard, Claude Robinson, John Satterfield,
Paul Smith, James Srygley, David Turney, Gary Willms, Chuck Wochele, Alan
Wulkan, and Franny Yuhas.
Business Members on the APTA Board of Directors present included: John Andrews,
Stephen Beard, John Canepari, Al Engel, Joseph Gibson, Jan Hull, Angela Iannuzziello,
Michael Monteferrante, Keith Nippes, Janet Rogers, and El Tinklenberg.
Guests present included: Charles Badgley, Ron Barnes, David Barrett, Jeffrey
Boothe, Mark Brager, Robert Brownstein, Judi Cohen, Shirley DeLibero, Roe
East, Barry Einsig, Joe Giulietti, Mary Ann Jackson, Daniel Kelleher, Michael
Laezza, Dennis Lengyel, Oscar Loera, Tom Longanbach, Frank Martin, Dave Mathisen,
John Meister, David Mikoryak, Michael Mulhern, Macy Neshati, Frank Otero,
Patrick Scully, Paul Skoutelas, Tony Torrence, Joe Trimai, Jeffrey Wharton,
Richard White, Gary Yamamura, and Donald Yuratovac.
APTA staff present included Bill Millar, Tony Kouneski, Fran Hooper, Art
Guzzetti and Martha Coffin.
The Chair reviewed the agenda and the APTA Anti-trust statement was read.
In the Chair's report the importance of the business member committees was
emphasized. A list of current committee assignments was distributed as well
as a sign-up sheet for new assignments and all business members were encouraged
to become actively involved in the committees. The BMBG meeting schedule for
2005 was noted and it was moved and seconded that the Minutes of the October
2004 meeting be approved. The motion passed.
In giving the Executive Committee report the Chair highlighted the adoption
of the APTA Strategic Plan and the items of interest to APTA business members,
as well as the establishment of a new APTA Security Steering Committee and
a new APTA Procurement Steering Committee. He also noted the Executive Committee
discussions on the continuation of the PT2 program, the standards program
and the issue of association governance and indicated that these issues would
be discussed in greater detail later in the meeting.
The Business Development Committee report it was presented by Co-Chairs Al
Engel and Don Nelson. They reported that the activities of the committee focused
on identifying business opportunities - including the international program
activities and the tactical plan items. Members were asked to comment on how
to enhance APTA's international program/ Alan Wulkan noted that he would be
attending a UITP Policy Committee meeting in the near future and would be
willing to convey messages to UITP business members. Members were also asked
to comment on the effectiveness of trade missions - how they could be made
more effective and how marketing for them could be enhanced. It was also noted
that APTA new strategic plan called for broadening the organization's scope
in the intercity rail area and that this could enhance business opportunities
for APTA business members.
Co-chairs Franny Yuhas and Cliff Henke gave the Outreach Committee report.
In a discussion about succession planning it was noted that open positions
on the APTA Executive Committee this year would include the Vice Chairs for
Human Resources and Management and Finance, both of which can be held by business
members. The need to have candidates who had a relationship, experience and
credibility with the committee was emphasized, as was the need to want to
make a contribution, and to develop a campaign strategy. Dave Turney said
that several GMs had suggested that a business member's perspective would
be a valuable asset in the Management and Finance position.
The Programs Committee report was given by Co-chairs Jolene Molitoris and
Jerry Premo. They discussed the need to identify speakers of national reputation
who would be an asset for the agenda at the Annual Meeting. Speakers mentioned
included Jim Collins the author of Good to Great and Built to Last, and Michael
Dell, and Steve Covey. Other comments from members included the need to get
ideas from Leadership APTA graduates, the possible establishment of awards
for effective papers and presentations that are given at APTA meetings.
Bob Brownstein and Chuck Wochele gave the report of the Procurement Committee.
They reviewed the issues that the committee has been working on, indicated
that FTA has understood the concerns of APTA business members regarding purchase
pooling and are listening. Because the process of making procurement change
takes a long time, they encouraged members to identify issues that need to
be addressed, and they emphasized the continuing need to have conversations
with GMs on procurement issues. Dave Turney reported on the status of the
Buy America Task Force report and noted that their suggestions would be presented
to the Executive Committee for approval in March unless any comments were
received. A member mentioned that UITP was considering a proposal to make
it harder to import products.
Jim LaRusch reported on the FTA purchase pooling initiative. He spoke about
the background and history of the effort and reported on the size of the bus
procurements that would be going forward under the program: a pool organized
by STV for the purchase of 83 - 30 foot buses, 320 - 35 foot buses and 509
- 40 foot diesel buses over the next five years; a pool organized by OCTA
to purchase approximately 600 CNG buses over the next five years; and a pool
organized by TxDOT to purchase cutaways. He also said that Congress had directed
FTA to authorize an additional two pools but no plans were in place for how
to carry out the congressional direction. He urged the members to monitor
the FTA procurement website for additional information. Members noted that
the pools would tie up 12 - 15% of the industry production capability, they
questioned how FTA would report on the impact of the pools on the industry,
and it was noted that Purchase Pooling software did not seem to be involved
in any of the three procurements. Other comments were that 15% of the market
could be a tipping point for small sub-suppliers who could be forced to wait
for five years to supply product, that if the first pools tied up an additional
15% of the market capacity that a major manufacturer could go down as well
as a number of the sub-suppliers, and whether FTA had inform Senator Shelby
of their concerns with the program was questioned.
Sharon Greene presented the Government Affairs committee report. Committee
activities that she noted included a letter to new Congressmen, the transit
action center, the use of Paul Weyrich to train business members on how to
do Hill visits and a report on the impact of reauthorization delays. In the
subsequent discussion members commented on the need to involve GM in the reauthorization
debate, the need for more clout in sending a letter on reauthorization, and
the need to leverage the support of companies that had public affairs staff
in Washington. Bill Millar urged all members with Washington public affairs
staff to have them attend the monthly meeting that APTA holds for DC-based
staff which as been set up to coordinate their efforts and bring additional
support to APTA's legislative program. Members noted the need to convey to
Congress the need for a new bill, the need to get to the leadership.
Frank DiGiacomo reported that the Bylaws Committee would meet at 7 am on
March 8th in Washington and that members who were interested in joining the
committee should contact him.
Kim Green reported on the APTA Bylaws Review Task Force. He reported that
the recommendations do not include additional positions that would be open
to business members.
In the report of the Technology Committee Brian Macleod reported that the
committee had suffered from a lack of interest by members and that the committee
needs to be refocused. To that end he asked members to identify people who
were interested in working on technology issues, and noted that the committee
would work closely with APTA's Research and Technology Committee chaired by
Linda Bohlinger.
The meeting was adjourned for the day.
When the meeting was resumed the APTA Chair's report was presented by Dick
White. His remarks focused on reauthorization, the impact of delay on the
industry, a letter from the industry being sent to the members of Congress,
and the need for business members to take the reauthorization message to the
Hill. He also commented on how PT2 had helped the industry get its message
out and how PT2 investments had paid off. The third topic that he talked about
was APTA's standards development program and the standards financing task
force's recommendations.
Bill Millar presented the APTA President's report. He noted that ridership
was up and appropriations for transit were up 5% for the industry, and that
within APTA revenues were on budget and that actual attendance at the Annual
Meeting and registrations for the upcoming meetings were good. He commented
on a letter sent to Ken Meade regarding the review that Congress directed
the IG to conduct, and that broadening APTA's support for high speed rail
was one of the items included in the Strategic Plan. He also noted that a
new report by the Hudson Institute would be released in the next week with
a pro-transit message.
An Election Overview was presented by Martin Hamburger. He noted that the
Speaker wanted $286 billion to be the starting point for reauthorization,
that he thought he had a deal to that effect with the White House, and that
bipartisan support exists in both houses for a good transportation bill with
an adequate number. With regard to places that influence should be attempted
he suggested Senator Frist regarding the extent to which he would go against
the White House, the Governors who have not been energized as they were for
the last bill, and that we need to keep doing the same thing that we have
been doing.
Regional Election comments were presented by Paul Skoutelas, Mike Mulhern,
Ron Barnes, and Dick White.
Paul Skoutelas noted that Pennsylvania transit agencies have been stressed
by a three year fight for state resources, that their state funding sources
have been capped for the last 10 years which has restricted growth in state
funding sources and has resulted in fare increases and staffing and service
cuts on the local level. He noted that the base fare at SEPTA will rise from
$2.50 to $3. He also reported on a new study from the PA Economy League that
indicates that 70% of the citizens support a new source of funds for transit
and that he believes that the issue of state funding will get turned around
this year.
Ron Barnes reported that Miami - Dade was trying to get a local pro-forma
together and to obtain federal and state support for that program.
Mike Mulhern reported that the MBTA had increased fares by 25% with 2 increases
in 4 years -- the largest increase in 25 years; that the agency was taking
on the union regarding the budget impacts of service delivery. He also noted
that the state's executive branch is responding to the business case for transit
and the need to keep the system in a state of good repair.
Dick White reported that Metro was a victim of its own success -- that the
continued growth in ridership without increases in capacity had caused reliability
problems and that Metro was a new old system but also an institutional orphan.
The $3.3 billion Metro Matters program needs $1.5 billion in federal funds
over the next 6 years and that a recent Brookings report on the need for a
regional funding source for Metro was entitled Metro: Deficits by Design.
In the subsequent discussion members commented on why we don't have a reauthorization
bill yet, how the White House could be influenced to make transportation a
priority, on the limited ability to affect White House priorities, and potential
impact points on the administration, the fact that the highway industry had
made $44 million in campaign contributions while Bill Millar had made $14,000
in personal contributions and that the transit industry's contribution was
the ability to leverage influence back home.
Dave Turney provided an update on PT2, noting that they were looking for
comments on the future of the program.
In a Procurement Summit Paul Skoutelas noted that the APTA Procurement Task
Force had not been able to address all of the important procurement issues
in the industry and that we can not relax on these issues and that they needed
to be worked on by mainstream APTA committees. Among the successes of the
Task Force he noted the development of the Procurement Guide for Transit Board
Members, the revised NTI procurement training course, the revisions to 4220,
and the development of best practices that would be submitted for the FTA
best practices manual. He noted that cash flow was not on the front burner
with GMs and that there are GMs who don't realize that their agency does not
pay bills within 30 days, that business members needed to share their concerns
with the GMs, that the public and private sectors needed to work together
to hold down the cost of capital projects and that standards hold promise
in that area as well as public-private partnerships utilizing innovative financing
alternatives.
Ron Barnes noted that procurement reform was going to become a major issue
at his agency and that there would need to be a major campaign to help the
county understand the importance of prompt payment and other issues that affect
their relationship with the private sector.
Mike Mulhern noted that the private sector was now doing a better job of
alignment between sales and business development, that GMs need to be more
sophisticated in how they approach procurement issues and that problems on
big procurements need to be dealt with early on, greater staff involvement
with client relationships is needed and that companies need to establish a
relationship with the CEO early in the process -- that business development
people need to really understand what they can do and that he expects to have
a good relationship with the company president or VP. He noted that companies
need to make a good profit and that there is nothing wrong with a company
making money from doing business with the MBTA as long as they get what they
paid for.
Dick White discussed how both the public and private sectors benefit from
cooperative rather than adversarial relationships, from healthy companies,
and risk sharing; and that mutual trust and open communications where both
easy and hard things are put on the table are keys to development of good
business relationships. He also talked about WMATA's use of negotiated best
value procurements and partnering procedures, focusing on cost drivers and
putting price tags on things in the evaluation process and that public agencies
often go overboard on risk issues. He emphasized the need to talk honestly
about performance capabilities and commitments -- that business members deserve
a healthy profit but that they need to understand that on performance issues
there can be no excuses about scope, schedule and price.
Subsequent questions asked were:
- how can technical rescoring at the RFP stage be controlled which means
that the RFP process becomes a low bid process? Mike Mulhern noted that
their needs to be greater weight put on technical evaluation scores, that
companies can't play "gotcha" -- that they need to point out fatal
flaws in procurements.
- how can GMs get the message to their procurement staff about the need
to support procurement change? Paul Skoutelas noted that GMs should make
the work of the Procurement Task Force known to their staff. Mike Mulhern
noted that a better job could be done and that after a recent FTA Triennial
audit he had sent his procurement staff down to learn from WMATA.
- what can be done to reduce the impact of the high cost of bonding in the
marketplace today? Paul Skoutelas noted that state statutes affected the
ability of some agencies to act in new ways. Mike Mulhern said that the
focus needed to be at prequalifying corporate capabilities and that he was
willing to spend more time on risk evaluation if it would lead to more robust
competition.
- do you have a vendor performance program at you agency? Mulhern said no
but that they did have a prequalification program.
- does Buy America prohibit their getting good and new products? Ron Barnes
noted that Buy America was a great way of keeping jobs in the US; Mulhern
said that he had a mixed view on the issue -- that there would be a day
when it should be dropped since we do have a global economy these days.
Paul Skoutelas said that it was not influential in their ability to get
good products and services but that it was becoming less and less relevant.
Dick White noted that final assembly is a big problem.
Jerry Premo discussed the possibility of establishing a CEO advisory group
from companies that have business lines that transcend public transit. Reba
Malone reported on the status of the Public Transit Foundation and urged everyone
to make a contribution.
In the report on the Activity Fund budget Kim Green noted the need to change
the timing of the fiscal year to correspond with APTA's fiscal year and the
need for a six-month extension to the current year budget. Nuria Fernandez
presented a proposed six-month budget developed by the BMBG budget committee
with expenditures totaling $175,000 for the period January 1 - June 30, 2005.
It was moved and seconded that the budget be approved. In the subsequent discussion
it was noted that there would still be a high ending balance, that there needed
to be a way for the chair and first vice chair to authorize funding for committee
projects, that reserves were appropriate when there were mandatory fixed payments,
that the transit initiatives conference should get additional funding, that
funds should be allocated to rolling out the procurement recommendations,
and that support for Paul Weyrich was needed. Bill Millar said that if help
for reauthorization was really desired the Weyrich contract would be supported
for six months. He also commented on how the PT2 budget was developed and
approved. Alan Wulkan moved to amend the motion to add $96,000 to support
the Weyrich contract for six months. The motion was seconded and a budget
totaling $236,000 was adopted. A motion to adopt a reserve policy for the
Activity Fund that would reserve an amount equal to 25% of the estimated annual
member contributions was moved and seconded. After discussion it was moved
and seconded that the motion be tabled. The motion to table was approved.
In the discussion members noted that historically a reserve was not needed,
that a reserve for overruns might be appropriate, and that members needed
to submit budget items for the 2006 budget.
Tony Kouneski provided a presentation on APTA's standards program. In the
subsequent discussion members asked about what would happen after the five
years outlined for the program, that standards development would be based
upon work plans developed by the working groups, that business members can't
afford to have members on all of the working groups and that more information
needs to be provided about what is going on on the APTA website so that member
could decide whether they needed to be involved, that standards had taken
one company's product definition away, that there would need to be a new process
for review and approval of new standards that are developed if the new funding
proposal was adopted including a new balloting process in accordance with
the ANSI process, that standards were not easily applicable to the A&E
area by APTA since they did not have civil engineering capabilities, that
APTA will only develop standards in areas where they do have expertise and
that they will defer to others who do have the needed expertise, whether agencies
can opt out of the standards programs, that APTA needed to be ANSI certified,
that APTA's standards should be sold, that APTA should provide notice of proposed
standard setting activities and that there needs to be a an annual budget
for standards.
Brian Macleod gave the EXPO report. He noted that 475,000 square feet of
space has been sold, an increase from his report at Atlanta. He also reported
on a variety of marketing efforts that have been started, asked if business
members would be benefited by having access to a trade show for folks who
participate in trade shows, and asked for support for a $10,000 budget item
to support attendance at EXPO. This last proposal was supported by the members
in a motion that was adopted.
Kim Green presented his appointments to the BMBG Nominations Committee. The
appointments were approved by the BMBG. He also asked what the members present
thought of Jerry Premo's CEO steering committee idea and about half of those
present thought it was a good idea. Members noted the need for a connection
to the BMBG.
Jim Srygley brought up the issue of the Business Member of the Year award
and the fact that there was not going to be an event supporting the award
in Dallas due to EXPO. It was moved and seconded that the award not be made
in an EXPO year since the award was established provide a vehicle to promote
the winning candidate. The motion was approved.
Delon Hampton reported that the 2007 meeting would be held in Naples FL at
the Ritz golf resort.
An Executive Session of the BMBG was then held.
The meeting was adjourned at the end of the Executive Session.
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