san joaquin hills transportation corridor agency …

SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCY BOARD OF DIRECTORS

AGENDA

March12, 2015 9:00 a.m.

TCA Offices 125 Pacifica, Irvine, CA 92618

AGENDA DESCRIPTIONS The agenda descriptions are intended to give notice to members of the public of 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 Peotter) PLEDGE OF ALLEGIANCE (Chairman Schoeffel) OATH OF OFFICE

Chairman Schoeffel 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 Chairman Scott Schoeffel City of Dana Point Vice-Chair Ross Chun City of Aliso Viejo Director Lisa Bartlett County of Orange, 5th District Director David Benavides City of Santa Ana Director Melody Carruth City of Laguna Hills Director Kerry Ferguson City of San Juan Capistrano Director Bert Hack City of Laguna Woods Director Laurie Davies City of Laguna Niguel Director Gary Monahan City of Costa Mesa Director Scott Peotter City of Newport Beach Director Ed Sachs City of Mission Viejo Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District Director Kathy Ward City of San Clemente Ryan Chamberlain Caltrans, Ex-Officio Member

http://www.thetollroads.com/

SJHTCA 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)

All matters listed under the Consent Calendar are considered routine and will be enacted by one vote. There will be no discussion of these items unless Board Members request specific items be removed from the Consent Calendar for separate action. 1a. MINUTES OF THE BOARD MEETING – FEBRUARY 12, 2015 (Kathleen Loch, Clerk of the Board) FILE NO. (2015S-001) ACTION: Approve Minutes. 1b. MINUTES OF THE SPECIAL BOARD MEETING – FEBRUARY 26, 2015 (Kathleen Loch, Clerk of the Board) FILE NO. (2015S-001.1) ACTION: Approve Minutes. 2. SAN JOAQUIN HILLS INVESTMENT REPORT (Howard Mallen, Director of Finance) FILE NO. (2015S-003) Enclosed are the quarterly investment reports for the San Joaquin Hills Transportation

Corridor Agency (SJHTCA) as of January 31, 2014. As of January 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 SJHTCA Investment Policy.

ACTION: Receive and file.


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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.

IV. PRESENTATIONS (ITEMS 4 – 5)

4. TRANSPARENCY DISCUSSION (Mike Kraman, Chief Financial 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.

http://www.thetollroads.com/


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5. TRAFFIC & REVENUE UPDATE (David 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.

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 (Scott Schoeffel, Chairman)

• Ad Hoc Committees – Monthly Reports

VI. CLOSED SESSION

No Closed Session items for discussion.

VII. ADJOURNMENT

The next regular meeting of the San Joaquin Hills Board of Directors will be held April 9, 2015, at 9:00 a.m., TCA Offices, 125 Pacifica, Irvine, CA 92618.

TECHNICAL ADVISORY COMMITTEE -- File No. 2015S-OOI __ .SAN JOAQUIN HILLS OPS & FINANCECOMMITTEE __ .FOOTHILL/EASTERN OPS & FINANCECOMMITTEE

X SAN JOAQUIN HILLS BOARD OF DIRECTORS __ FOOTHILL/EASTERN BOARD OF DIRECTORS

NEXT BOARD MEETING DATE: March 12, 2015

SUBJECT: Minutes of the Febrnary 12, 2015, Meeting of1hc Board of Directors

STAFF RECOMMENDATION:

Approve minutes,

REPORT WRITTEN BY: Kathleen Loch, Clerk of the Board 949-754-3492

REVIEWED BY: Engineering Environmental Communications/Public Affairs Finance Toll Operations

SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCY BOARD OF DIRECTORS

MINTUES

February 12, 2015 I. CALL TO ORDER The meeting was called to order at 9:05 a.m. OATH OF OFFICE

Chairman Schoeffel administered the Oath of Office to Laurie Davies, the new Director for the City of Laguna Niguel and Scott Peotter, the new Director from the City of Newport Beach.

ROLL CALL Chairman Scott Schoeffel City of Dana Point Vice-Chair Ross Chun City of Aliso Viejo Director Sam Allevato City of San Juan Capistrano Director Lisa Bartlett County of Orange, 5th District Director Melody Carruth City of Laguna Hills Director Bert Hack City of Laguna Woods Director Michele Martinez City of Santa Ana Director Laurie Davies City of Laguna Niguel Director Gary Monahan City of Costa Mesa Director Scott Peotter City of Newport Beach Director Ed Sachs City of Mission Viejo Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District Director Kathy Ward City of San Clemente Lisa Ramsey Caltrans, Ex-Officio Member

II. PUBLIC COMMENTS

John Palazzolo, toll road user since 1997, shared his concerns regarding posting toll rates. He said pricing signs (with the full range of costs) should be posted well in advance of toll road entry points. Director Shea asked that this be agendized for future meetings. CEO Kraman reminded the board that various sign designs were shared previously and staff was directed to bring this item to the Toll Operations Ad Hoc Committee.

III. CONSENT CALENDAR (ITEMS 1 – 6) Director Spitzer pulled Items 3 and 5 from the consent calendar. ACTION: Approve Consent Calendar Items 1, 2, 4, and 6. MOTION: Hack SECOND: Carruth VOTE: Unanimous (Director Peotter abstained from Item 1)

SJHTCA Board of Directors Minutes February 12, 2015

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1. MINUTES OF THE DECEMBER 11, 2014 BOARD MEETING (Kathleen Loch, Clerk of the Board) FILE NO. (2015S-001) ACTION: Approve Minutes. 2. SAN JOAQUIN HILLS INVESTMENT REPORT (Howard Mallen, Director of Finance) FILE NO. (2015S-003) Enclosed are the quarterly investment reports for the San Joaquin Hills Transportation

Corridor Agency (SJHTCA) 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 SJHTCA Investment Policy.

ACTION: Receive and file. 4. CURRENT INSURANCE COVERAGE (Howard Mallen, Director of Finance) FILE NO. (2015J-002)

The Foothill/Eastern Transportation Corridor Agency (F/ETCA) and the San Joaquin Hills Transportation Corridor Agency (SJHTCA) bind numerous insurance policies annually. This report provides a summary of the current coverages and related costs.

ACTION: Receive and file. 6. ARBITRAGE REBATE AND YIELD RESTRICTION COMPLIANCE SERVICES

CONTRACT (Amy Potter, Chief Financial Officer) FILE NO. (2015S-004)

The refinancing of the San Joaquin Hills Transportation Corridor Agency’s debt in November 2014 improved the agency’s financial position and achieved all of the Board of Directors’ defined goals. The refinance was completed under such favorable market conditions that assistance from a fully qualified firm is required to ensure compliance with the agency’s tax certificate that was part of the bond issuance. These tax compliance services will be required during the life of the bonds and as such agency staff conducted a request for proposal for arbitrage rebate and yield restriction compliance services and determined PFMAM to be the most qualified proposer. Therefore, staff requests approval of the contract with PFMAM for arbitrage rebate and yield restriction compliance services.

ACTION: Authorize the Chief Executive Officer to execute a five-year contract with one five-year

option (K000993) with PFM Asset Management LLC (“PFMAM”) to provide arbitrage rebate and yield restriction compliance services for an annual fee of $18,000.


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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.

Eileen Harrigan, Director, Contracts, provided the staff report and responded to questions. Additional information was provided by Mike Kraman, Chief Executive Officer.

Board Discussion 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. He asked that these items be reviewed to determine whether TCA is consistent with other agencies; Director Carruth suggested that the TCA take a look at revising the agency’s guidelines for expenses to ensure that what we’re doing and spending is appropriate; It was requested to see that promotional materials, luncheons, etc., as a single line item to view accurately, versus how it is currently displayed in the staff report’s attachments. Board Members requested that staff provide a breakdown/structure of what the TCA is getting for these memberships/sponsorship dollars as well as an explanation of the employee holiday lunch. It was also suggested that TCA look at other public agencies to determine if we are in line with how these types of events are conducted.

CEO Kraman suggested that this may be easier to evaluate during the budget workshops and review process.

ACTION: Receive and file. MOTION: Monahan SECOND: Carruth VOTE: Unanimous


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5. 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.

Board discussion included: Director Spitzer noted that what this waiver of membership endeavors to do is if you are 60 years of age or older, have never been a member of OCERS, and you come to work for the agency, it allows you to not be mandated to join OCERS so that you can have more take home pay. This will now be their personal decision and then the agency doesn’t have to match that money to go to OCERS. It’s a win-win all the way around but it required enabling legislation by the Board of Supervisors in order to allow other agencies to do it throughout the County. The Board of Supervisors is slowly but surely approaching every single agency to adopt this waiver of membership and it’s one of the pension reforms that we are allowed to do under PEPRA. When we do things that are good towards being responsible on pensions I think that it is important for us to highlight it and hopefully you will bring it, if it hasn’t already been agendized, to any of the boards or commissions you sit on in the County because there is no reason for us to be paying into a system that an employee may never even vest and never be able to see that money. Why shouldn’t they keep it in their pocket and we save as an agency. I want to thank staff for putting this together and making it cogent for the Directors’. Director Bartlett added that the Board of Supervisors approved it yesterday and it was approved at LAFCO as well. This is good for the employees that are 60 years of age and older because it gives them some options, it helps reduce the unfunded pension liability, and it also eliminates the double-dippers.


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Director Allevato questioned the age limit being set at 60 and asked for clarification.

Director Spitzer responded that the enabling statute set it at 60. New employees age 60 and older are given a choice to select a 401 style plan instead of going into a defined contribution plan. The State law allowed them to have options and that’s the age threshold the legislature picked. MOTION: Spitzer SECOND: Martinez VOTE: Unanimous

IV. PRESENTATION/CONSENT (ITEM 7) 7. SECOND QUARTER FISCAL YEAR 2015 BUDGET STATUS REPORT (Howard Mallen, Director of Finance) FILE NO. (2015S-005)

Through the end of the second quarter of Fiscal Year 2015, the San Joaquin Hills Transportation Corridor Agency received a total of $75.1 million in revenue or 53.9% of the annual budget. Net Toll Revenue, Fees and Penalties, Development Impact Fees, and Interest Earnings were above target at 51.8%, 63.6%, 80.2%, and 52.1% respectively.

Total uses were $40.7 million or 35.6% 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 32.1%, 30.8%, and 46.8%, respectively. Debt was at an expected 35.0%.

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: The accusations by the media alleging that TCA has a violation/fine structure in place to generate revenue money and be a money maker; the deterrence program needs to continue but not be perceived as a money making source of revenue; violations should not be used as a revenue stream for the TCA and should only be used for debt collection; deterrence needs to be achieved without the agency being accused of using those revenues as a money maker source of income. It was suggested that clarification be given by staff as to the fees and penalties and in the future a breakdown of those fees and penalties are separate line items in the monthly Traffic & Revenue Reports to track the decline in penalties since the implementation of AET. Suggestions were made to discuss this through the budget process, to separate the fess and penalties into separate line items, and to discuss the possibility of that a special fund be set up so that the Board could designate where those dollars from penalties and fees can be used for deterrent expenditures, additional signage and communications.


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Amy Potter stated for clarification that per the Agency’s bond indentures anything related to toll revenue, including fees and penalties, is considered toll revenues. They are revenues that need to be treated as pledged first to the debt rather than separating them out into a special fund.

MOTION: Shea SECOND: Bartlett VOTE: Unanimous

V. BOARD BUSINESS (ITEM 8) 8. 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 CEO to execute Amendment No. 2 to Contract No. K000858 with

QuestMark, for printing and mailing services for FY15 in an amount not-to-exceed $68,000.

2. Authorize the CEO to execute additional changes to this contract within five percent of

the authorized expenditure value ($3,400) without further Board action.

Joyce Hill, Director, Customer Service, provided the staff report and responded to questions. Additional information was provided by Mike Kraman, Chief Executive Officer.

Board Discussion included: A directive to staff to review the routine business expense section of the CAPS manual; 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. This discussion was then referred to the Joint Procurement Ad Hoc Committee for further discussion. A question was raised that if this item is not approved today, will it hinder the progress of this contractor doing its work. Joyce Hill responded in the affirmative and that there were invoices that needed to be paid.


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CEO Kraman suggested running the procurement and the policy aspects of this through the Procurement Ad Hoc Committee but given that we do have pending invoices, asked that the Board approve this today. This is a direct result of the increased volume of 1) the additional accounts that we have as a result of AET and 2) the complexity that we added to some of the mailing notices which doubled our printing costs. This couldn’t have been anticipated when staff first brought this through as a routine business expense and invoices need to be paid. He suggested that the policy aspects of this discussion be sent to the ad hoc committee. MOTION: Martinez SECOND: Carruth VOTE: Unanimous

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

• Traffic & Revenue Update

CEO Kraman reported that the transactions for SJH were up 3.5% year-over-year and revenue was up 9.9%. A meeting was held yesterday with the TCA leadership and OCTA’s leadership, which is going to be a recurring quarterly meeting. Discussion will include issues that are common to both agencies in particular items like the 241/91 Connector, the 405 Project and other items that are of interest between the agencies. It was a great dialogue we did appreciate OCTA sharing their customer service surveys. As Director Spitzer pointed out there were some points in that survey that this agency can learn from as well. There were a couple of events last week that the TCA participated in: the WTS Reception in Costa Mesa where TCA was recognized. PBS SoCal, and Pat Haslam interviewed the agency for a report on where we are with all electronic tolling, which aired on Saturday during their PBS Weekend Report.

• 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.


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Board discussion included: Concerns about daily customer calls not getting answered and that the TCA does not have a voicemail system in place for customers to leave a message; if the agency is not servicing the people who were expecting to pay a toll and then slapping them with a fine when they can’t get through to our CSR’s is not acceptable; questions relative to staff anticipating call volume trends on Monday’s or holidays and if there is flexibility to shift our human resources to adjust those employees that are temporary CSR’s; the need to have a short-term plan and an RFP process that will provide comments from industry leaders to give us advice about what we should do in the future with respect to handling our call center. Suggestions were made as to how to achieve an efficient way to do a voicemail set up; and that the hourly pay rate be increased to hire people who are incentivized to do these jobs, or we contract with a firm that specializes in collections.

CEO Kraman reported that 3M has announced that they are not going to be seeking a renewal of their contract when it expires on June 30th and staff is in the process of an interim procurement as well as a long-term contract. Staff will be using those opportunities to try and address some of the issues such as full-time versus temporary positions because we have really suffered a lot in the turnover we have had there. We have been up as high as 24 people and down as low as 16, which is a sign of the economy doing well so it’s definitely something we are looking at. When we get those responses as to how people propose to staff those positions and we would look for improvements on staffing and retention, which then will help this trend as well.

Chairman Schoeffel closed the discussion by stating that staff has received both the content and tenor of the discussion here.

CEO Kraman added that to help us with this process a new Toll Operations Chief will be starting with the agency on Tuesday. Samuel Johnson is coming to us from SANDAG where he worked and had oversight of the I 15 Express Lanes system and the SR 125 toll road.

DIRECTORS’ REPORTS AND NEW BUSINESS (Scott Schoeffel, Chairman)

• Ad Hoc Committees – Monthly Reports

Joint Environmental Ad Hoc Committee Ross Chun 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.


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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

Ross Chun 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.

• Ad Hoc Committee Assignments

Chair Schoeffel reported that towards the end of next week we will be sending out the recommended 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. We would expect this reorganization of the committee structure to take effect in July after both Boards reorganize and our fiscal year is completed. Director Carruth questioned the CEO about the possibility of a radio transmission along the San Joaquin Hills Toll Road and if are we able to expand our message; is the agency restricted by the FCC to include in addition to “Welcome to the Toll Road – you can pay on line,” anything else where we could make reference to where you are in the canyon, historic references, or any of the geography. CEO Kraman responded that he would look into it. The agency does have FCC restrictions that we can’t use it for promotional or advertising in that vein, but if it is informational he will explore what the limits are.


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Director Bartlett reported there was an outstanding OCTA/TCA Leadership meeting and based upon the Board action that the OCTA Board took with regard to the I 405 project, she feels it would be appropriate at this time to direct TCA staff to start looking into the investment grade study for the SR 73 Connector Project, working with Stantec and through them bring it to the Board. She estimates it will be over $100,000 and will require Board approval but feels with the timing of Caltrans and that project moving forward very quickly; this agency needs to get started on our end with the study. Director Spitzer requested that during the revamping of the TCA committees, a committee be designated for the SR 241/91 Connector Project.

VI. CLOSED SESSION

There were no Closed Session items for discussion. VII. ADJOURNMENT

The meeting was adjourned at The next regular meeting of the San Joaquin Hills Board of Directors will be held March 12, 2015, at 9:00 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 Scott Schoeffel, Chairman San Joaquin Hills Board of Directors

SAN JOAQUIN HILLS 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 10:05 a.m.

ROLL CALL Vice-Chair Ross Chun City of Aliso Viejo Director Sam Allevato City of San Juan Capistrano Director Melody Carruth City of Laguna Hills Director Laurie Davies City of Laguna Niguel Director Bert Hack City of Laguna Woods Director Gary Monahan City of Costa Mesa Director Scott Peotter City of Newport Beach Director Ed Sachs City of Mission Viejo Director Christina Shea City of Irvine Director Todd Spitzer County of Orange, 3rd District ABSENT: Chairman Scott Schoeffel City of Dana Point Director David Benavides City of Santa Ana Director Kathy Ward City of San Clemente

II. PUBLIC COMMENTS

There were no comments from the public. III. BOARD BUSINESS

1. CAPITAL IMPROVEMENT PLAN PRESENTATION David Lowe, Acting Chief Engineer, provided the history and description of the Capital

Improvement Plan. He then discussed current projects within the CIP and items that have changed that may affect future CIP needs. He noted two current congested locations on the SR73 - southbound at the MacArthur offramp and northbound at the Catalina View Toll Plaza (a.m.).

Then he discussed future possible needs for widening. Vice Chair Chun suggested coordinating

with UPS on their delivery times to help reduce morning congestion.

San Joaquin Hills Board of Directors Minutes February 26, 2015

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The two proposed projects to carry:

• Caltrans Maintenance Station Director Carruth asked if the location of the Maintenance Station had been determined. Mr. Lowe said that the location is being discussed with Caltrans. The SJTCA has an $8 million obligation. Mr. Adnan Maiah, Caltrans, added it will be a struggle to build and to find a station in addition to purchasing the land.

• Glenwood Interchange phases 2 and 3.

Projects proposed to be added:

• The Bonita Bike trail – the project is designed to enhance TCA property so that it can be transferred to another entity. Valarie McFall, Director of Environmental and Planning, has plans to meet with staff from the City of Newport Beach on March 11. David Webb, City of Newport Beach Public Works Director requested that he be kept apprised of plans. Katie Berg-Curtis (Irvine) also requested the layout of the bike trail.

• Toll Plaza Removal Project – the project is designed to help minimize equipment costs

and reduce exposure. Director Spitzer noted that one toll booth should be preserved somewhere in Orange County for history. Mr. Lowe said there are 23 toll booths to be removed, ten of which have priority for removal. It was requested that the El Toro booth receive a high priority.

• 73/405 Direct Connector – placeholder for TCA includes costs to evaluate and possibly

participate in this OCTA/Caltrans project. Mike Kraman and Kia Mortazavi will attend OCTA and TCA meetings. In addition, Director Spitzer asked for an OCTA/Caltrans presentation update to the full board.

• Signage Improvements –may be a carryover from FY 15.

CEO Kraman said there is new technology available to get information on traffic patterns via electronic trails and companies who manage such data. Director Spitzer asked that the Board be notified if staff plans to do anything that involves collecting personal data.

San Joaquin Hills Board of Directors Minutes February 26, 2015

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Projects to be removed:

• Jamboree Ramps

The ramp construction easement by Fletcher Jones is going to expire in 2016. David Webb asked whether building this ramp is a TCA obligation. If so, will removing the ramp from the MPAH require an agreement between TCA, Newport Beach, Irvine, Caltrans and OCTA? It was requested that the whole area be studied to identify a broad solution to divert more traffic to Newport Coast Drive.

ACTION: Discussion item, no action necessary III. CLOSED SESSION

There was no need for a closed session.

IV. ADJOURNMENT

The meeting was adjourned at 10:50 a.m. The next regularly scheduled meeting of the San Joaquin Hills Board of Directors will be March 12, 2015 at 9:00 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: San Joaquin Hills Transportation Corridor Agency Board of Directors FROM: Howard Mallen, Director of Finance SUBJECT: Investment Reports STAFF RECOMMENDATION: Receive and file. BACKGROUND: The San Joaquin Hills Transportation Corridor Agency (SJHTCA) 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 SJHTCA for the month ended January 31, 2015. These investment reports reflect only assets held by the Trustee (Bank of New York), which include the 1997 and 2014 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 SJHTCA Investment Policy. Portfolio Update Since December 31, 2014, the adjusted cost portfolio balance decreased by approximately $4.1 million to $267.5 million. The decrease in January is primarily due to debt service payments of $13.5 million, construction and construction related expenditures of $0.3 million and toll operations related expenses of $1.4 million. The decrease is partially offset by toll revenue transfers of $10.4 million and the receipt of development impact fees of $0.7 million.

SJH Investment Reports File No. 2015S-003 March 12, 2015 Page 2 In November 2014, the agency refinanced the 1993 Bonds and a portion of the 1997 Bonds. In association with the 2014 refinancing, the agency invested $155.6 million in Treasury Securities—State and Local Government Series, also known as SLGS, at a zero percent interest rate. SLGS are special purpose securities that are issued to state and local government entities, upon their request, to assist the agency to comply with federal tax laws and Internal Revenue Service arbitrage regulations when the entity has cash proceeds to invest from their issuance of tax exempt bonds. As the agency experienced such favorable conditions at the time of the refinancing, the purchase of SLGS was needed to comply with yield restrictions and tax arbitrage rebate requirements. The weighted average maturity of the SJHTCA portfolio, exclusive of the SLGS mentioned above, is 0.5 years. The weighted average YTM (Yield to Maturity @ Cost), also exclusive of the SLGS, increased 2 basis points, from 0.28 percent at December 31, 2014 to 0.30 percent at January 31, 2015. The market value of the portfolio is materially equal to the adjusted cost of the portfolio at month end. 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 65 percent of the entire portfolio is invested in U.S. Treasuries and Agency bonds that are rated AA+ by Standard and Poor’s and Aaa by Moody’s. The remainder of the portfolio is invested in 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

SJH Investment Reports File No. 2015S-003 March 12, 2015 Page 3 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 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 – SJHTCA Indenture and Non-Indenture Funds.

This report provides a summary of the SJHTCA 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– SJHTCA 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 – SJHTCA Indenture and Non-Indenture Funds

This report provides a detailed description and the associated ratings of each fixed income security held in the SJHTCA portfolio at January 31, 2015. This report includes

SJH Investment Reports File No. 2015S-003 March 12, 2015 Page 4

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.

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 San Joaquin Hills Transportation Corridor Agency (SJHTCA) 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 SJHTCA Investment Policy. Attachments

Exhibit 1

Adjusted Pct

Security Type Cost Market Value Assets Yield

Money Market & Cash

MONEY MARKET & CASH 14,700,370.98 14,700,370.98 5.5% 0.00

14,700,370.98 14,700,370.98 5.5% 0.00

Commercial Paper

COMMERCIAL PAPER 61,258,721.22 61,267,066.85 22.9% 0.30

61,258,721.22 61,267,066.85 22.9% 0.30

U.S. Treasuries

TREASURY NOTES 201,046.75 201,461.00 0.1% 0.50

201,046.75 201,461.00 0.1% 0.50

U.S. Agencies

FHLB BOND 3,198,609.33 3,206,995.20 1.2% 0.60

FNMA BOND 13,839,909.72 13,857,223.36 5.2% 0.41

AGENCY BOND 699,687.77 701,461.60 0.3% 0.60

17,738,206.82 17,765,680.16 6.6% 0.41

Municipal Bonds

MUNICIPAL BONDS 18,042,682.50 18,055,093.00 6.7% 0.41

18,042,682.50 18,055,093.00 6.7% 0.41

TOTAL PORTFOLIO WITHOUT TREASURY SLGS 111,941,028.27 111,989,671.99 41.9% 0.30

U.S. Treasuries

TREASURY SLGS 155,556,591.00 155,556,591.00 58.1% 0.00

TOTAL PORTFOLIO 267,497,619.27 267,546,262.99 100.0% 0.13

Transportation Corridor Agencies

PORTFOLIO SUMMARY

San Joaquin Hills Transporation Corridor Agency

1/31/2015

Money Market & Cash 5.49%

Commercial Paper 22.90%

U.S. Treasuries 58.22%

U.S. Agencies 6.64%

Municipal Bonds 6.75%

SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCY PORTFOLIO SUMMARY

INDENTURE AND NON-INDENTURE FUNDS JANUARY 31, 2015

MARKET VALUE $267,546,263

Exhibit 2

Transportation Corridor AgenciesFIXED INCOME HOLDINGS - SETTLED TRADES San Joaquin Hills Transportation Corridor Agency Indenture

& Non-Indenture FundsJanuary 31, 2015

Date/PriceAdj.Unit Adjusted

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

COMMERCIAL PAPERAbbey National North America LLC Commercial Paper

0027a1sj9 10,000,000 99.91 9,990,574.72 A-1 P-1

0.320% Due 05-18-15Abbey National North America LLC Commercial Paper

0027a1ss9 5,304,000 99.91 5,299,464.98 A-1 P-1


0027a1sv2 1,600,000 99.90 1,598,439.53 A-1 P-1


0027a1ut4 8,214,000 99.82 8,199,542.93 A-1 P-1

0.360% Due 07-27-15Credit Agricole CIB Commercial Paper

22533urh8 2,000,000 99.95 1,999,083.21 A-1 P-1

0.220% Due 04-17-15Credit Agricole CIB Commercial Paper

22533usj3 12,000,000 99.91 11,989,396.77 A-1 P-1

0.320% Due 05-18-15Natixis Commercial Paper 63873ks40 7,200,000 99.93 7,195,031.18 A-1 P-10.270% Due 05-04-15Natixis Commercial Paper 63873ksj7 15,000,000 99.91 14,987,187.90 A-1 P-10.290% Due 05-18-15COMMERCIAL PAPER Total 61,258,721.22

TREASURY SLGSU.S. Treasury SLGS s35347510 117,956,370 100.00 117,956,370.00 AA+ Aaa0.000% Due 01-15-27U.S. Treasury SLGS s35347910 27,393,548 100.00 27,393,548.00 AA+ Aaa0.000% Due 01-15-27U.S. Treasury SLGS s35348080 10,206,673 100.00 10,206,673.00 AA+ Aaa0.000% Due 01-15-27TREASURY SLGS Total 155,556,591.00

TREASURY NOTESU.S. TREASURY NOTE 912828NZ9 200,000 100.52 201,046.75 AA+ Aaa1.250% Due 09-30-15TREASURY NOTES Total 201,046.75

FHLB BONDFEDERAL HOME LN BKS 3130A0C65 3,200,000 99.96 3,198,609.33 AA+ Aaa0.625% Due 12-28-16FHLB BOND Total 3,198,609.33

FNMA BONDFEDERAL NATL MTG ASSN 3135G0SB0 11,940,000 100.00 11,940,243.37 AA+ Aaa0.375% Due 12-21-15

1

Exhibit 3

Transportation Corridor AgenciesFIXED INCOME HOLDINGS - SETTLED TRADES San Joaquin Hills Transportation Corridor Agency Indenture

& Non-Indenture FundsJanuary 31, 2015

Date/PriceAdj.Unit Adjusted

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

FEDERAL NATL MTG ASSN 3135g0va8 1,900,000 99.98 1,899,666.35 AA+ Aaa0.500% Due 03-30-16FNMA BOND Total 13,839,909.72

AGENCY BONDFARMER MAC NOTE 31315pj42 700,000 99.96 699,687.77 NR NR0.600% Due 06-27-16AGENCY BOND Total 699,687.77

MUNICIPAL BONDSBAY AREA TOLL AUTH CALIF TOLL

072024de9 2,000,000 105.32 2,106,324.15 AA Aa3 04-01-16

5.000% Due 04-01-16 100.00INDIANA ST FIN AUTH REV 4550574M8 1,700,000 100.16 1,702,787.16 AA+ Aa10.750% Due 07-01-15MISSOURI STATE GENERAL OBLIGATION BOND

606301MG1 9,000,000 102.42 9,217,667.18 AAA Aaa

4.000% Due 10-01-15OHIO STATE GENERAL OBLIGATION BOND

677521ga8 4,000,000 100.35 4,013,836.80 AAA Aa1

1.970% Due 05-01-15UNIVERSITY CALIF REVENUE BOND

91412GPX7 1,000,000 100.21 1,002,067.21 AA Aa2

0.659% Due 05-15-16MUNICIPAL BONDS Total 18,042,682.50

GRAND TOTAL 252,797,248.29

2

Exhibit 3

Note 1

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

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.

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