Las Vegas, NV
ATTENDEES
Claudia L. Hussein, Chair, Port Authority of Allegheny County
Terry Cordell, Vice Chair, RTC of Southern Nevada/CAT
Robert Babbitt, McDonald Transit Associates
Scott Baker, AECOM Consulting
Sol Barth, Vanderbilt Capital
Peter Benjamin, Washington Metropolitan Area Transit Authority
George Bischof, Macquarie Corporate Finance (USA)
Steven Bracy, UBS|PaineWebber
Mary Conkel, Greater Dayton RTA
Mort Downey, PB Consult Inc.
Raymond Ellis, AECOM Consulting
Grace Gallucci, Greater Cleveland Regional Transit Authority
Jonnie Keith, Metropolitan Atlanta Rapid Transit Authority
William Leverence, Westchester County Bee-Line System
Bill Maier, Sunline Transit Agency
Murphy McCalley, McCalley Consulting
Deborah McClain, AC Transit
Richard McCrillis, Metropolitan Atlanta Rapid Transit Authority
Kenneth Montague, Jr., Utah Transit Authority
Jeff Parker, Jeffrey A. Parker & Associates
Mike Parker, Jeffrey A. Parker & Associates
Gloria Salazar, San Joaquin Regional Transit District
Ken Schmier, NextBus
Scott Schroeder, Bay Area Rapid Transit
Ed Thomas, Washington Metropolitan Area Transit Authority
Michael Speas, CIBC World Markets Corporation
Karen Weinberg, CIBC World Markets Corporation
Nancy Whelan, Nancy Whelan Consulting
Carole Winchell, Stark Area RTA
Tom Yang, UBS|PaineWebber
Jay Zwerling, Macquarie Corporate Finance (USA)
Sam Kerns, Staff Advisor, American Public Transportation Association
Brian Dunlap, American Public Transportation Association
Welcome and Introduction
Chair Claudia Hussein called the meeting to order. Ms. Hussein welcomed the committee members in attendance and self-introductions were made.
Approval of Minutes
A motion was made, seconded, and unanimously adopted to approve the minutes of the Financial Management Committee’s May 5, 2002 meeting.
Assessing the Climate for Transit – Mort Downey
Ms. Hussein introduced Mort Downey, Principal Consultant at PB Consult, Inc. and former Deputy Secretary of Transportation for the USDOT. Mr. Downey described the outlook for transit as a difficult, with revenues down and spending up. Most of the decreases in revenue are the result of decreased sales tax collections and reduced local funding from states and municipalities. Mr. Downey discussed the current status of Amtrak and its likely bailout by Congress (no authorization as of this date but funds are appropriated). He also noted that the Transportation Security Administration (TSA) would be moving from the USDOT into the newly created Department of Homeland Security. The TSA will likely have a $5 billion per year budget. Mr. Downey concluded his presentation with comments on issues related to the upcoming TEA-21 Reauthorization, especially those dealing with the RABBA allocation, the funding guarantees and funding firewalls.
Legislative Update – Peter Benjamin
Mr. Benjamin went through the PowerPoint presentation on APTA’s recommendations on TEA 21 reauthorization. This presentation had earlier in the day been given to the APTA Board of Directors.
The recommendations were formed from the Reauthorization Task Force that included more than 100 members. The Task Force met 14 times in 10 cities over the last two years. Highlights of the recommendations include:
- Grow transit program from $7.2 billion to $14.3 billion over next six years
- Preserve the guaranteed funding
- Grandfather existing program at the $7.2 billion guaranteed level
- Increase funding for new starts, rail modernization and discretionary bus
- All growth subject to formula/capital relationship of not less than 1.15 to 1
- Recommendations are evolutionary, not revolutionary
T-Flex Update – Terry Cordell
Terry Cordell discussed the last T-Flex workshop that was held in Pittsburgh in August 2002. A number of presentations were give at the workshop related to grants management. These presentations have been included in the FMC package of materials distributed at the beginning of the meeting. The next T-Flex workshop will be held in LA in March 2003.
Roundtable
There were a number of roundtable issues discussed by the Committee members.
Current Agency Budgets/Economic Downturn
Pittsburgh (Claudia Hussein) – The agency is experience significant revenue shortfalls. As a result, they are implementing fare increases, personnel layoff and service cutbacks. They ended the last fiscal year with a deficit. Even with all the financial difficulties though, they are embarking on the largest capital expansion program ever. They are also looking to put in a new fare collection system.
Washington, D.C. (Peter Benjamin) – Washington Metro (WMATA) has no dedicated source of funding. Currently they need to cut $50M out of their FY04 operating budget. The 10-year capital budget is set at $12B but they currently have only $3B of funding in place. Also, it is important to realize that an agency expands their capital budget and add service, these capital items also significantly increase the agency’s operating budget.
Fare Collection Technology
Ray Ellis stressed the need for the industry to make further progress in developing standards that can be applied universally to fare collection systems. The future of these systems is definitely migrating to SmartCard technology. APTA can play an important role in bringing industry leaders together to help develop these standards. Richard McCrillis suggested that a member of APTA’s Fare Collection Committee present the recent work of the Committee at a future FMC meeting.
Insurance
A number of members discussed their recent problems attaining insurance in the aftermath of 9/11.
One agency stated that their insurance premiums have doubled over the last year. WMATA has experienced a 50% increase in premiums have found it more difficult to attain performance bonds, especially with minority firms. As a result, WMATA has been increasing its self-insurance reserves (ie, increasing insurance deductibles).
QTE Financing
Karen Weinberg and Michael Speas of CIBC World Markets gave a presentation (presentation also distributed) on the latest trends and transactions in the area of Qualified Technological Equipment (QTE). In the last year, CIBC has been involved in over $4B QTE transactions within the United States, with much more than that happening overseas. QTE financing seems to be more prevalent in the United States in recent years. Karen Weinberg noted that in a QTE transaction, it is vital to establish that the equipment being financed is classified as Qualified Technological Equipment and this process is typically one of the most time consuming parts of the transaction process. The minimum size of a QTE transaction is in the $75-$100 million range.
Calendar of Event/APTA Activity Update
Sam Kerns, APTA staff advisor, reviewed the calendar of upcoming APTA events, including the idea of holding the next Committee meeting in conjunction with APTA’s TransITech Conference.
Mr. Kerns also encouraged the members to support APTA’s charitable foundation, the American Public Transportation Foundation (APTF). The APTF was founded in 1987 to support young professionals pursuing a career in public transportation. The mission of the Foundation is to sustain and grow a talented, dedicated and diverse workforce within the industry. The Foundation is funded mostly from tax-deductible contributions from individuals within the transit community.
Mr. Kerns concluded his briefing with an update on the Association’s most important initiative, (PT)2. The initiative has been highly successful in promoting public transportation around the country and has gone over its $30M five-year fundraising goal.
Next Meeting
Chair Hussein adjourned the meeting at 3:00 p.m. The next meeting of the Committee will be in Pittsburgh, PA in May at APTA’s TransITech Conference.
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