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Home My WebLink About09-04-2019 City Council agenda packetSaratoga City Council Agenda – September 4, 2019 – Page 1 of 5 SARATOGA CITY COUNCIL REGULAR MEETING SEPTEMBER 4, 2019 5:45 P.M. INTERVIEWS FOR COMMISSIONS Linda Callon Conference Room, City Hall | 13777 Fruitvale Avenue, Saratoga, CA 96070 Time Name Commission Vacancies Incumbent Reg. Voter 5:50 p.m. Renee Paquier Parks and Recreation 1 Term (10/1/19 - 9/30/2023) yes yes 6:00 P.M. JOINT MEETING Linda Callon Conference Room, City Hall | 13777 Fruitvale Avenue, Saratoga, CA 96070 Joint Meeting with Montalvo Arts 7:00 P.M. REGULAR SESSION Civic Theater, Council Chambers | 13777 Fruitvale Avenue, Saratoga, CA 95070 PLEDGE OF ALLEGIANCE ROLL CALL REPORT ON POSTING OF THE AGENDA The agenda for this meeting was properly posted on August 30, 2019. REPORT FROM JOINT MEETING ORAL COMMUNICATIONS ON NON-AGENDIZED ITEMS Any member of the public may address the City Council for up to three (3) minutes on matters not on the Agenda. The law generally prohibits the City Council from discussing or taking action on such items. However, the Council may instruct staff accordingly. ANNOUNCEMENTS SPECIAL PRESENTATIONS West Valley Collections and Recycling Presentation Recommended Action: Receive report and provide direction to staff. Saratoga City Council Agenda – September 4, 2019 – Page 2 of 5 1. CONSENT CALENDAR The Consent Calendar contains routine items of business. Items in this section will be acted on in one motion, unless removed by the Mayor or a Council Member. Any member of the public may speak on an item on the Consent Calendar at this time, or request that the Mayor remove an item from the Consent Calendar for discussion. Public Speakers are limited to three (3) minutes. 1.1. City Council Meeting Minutes Recommended Action: Approve the City Council minutes for the Regular City Council Meeting on August 21, 2019. 1.2. Review of Accounts Payable Check Registers Recommended Action: Review and accept check registers for the following accounts payable payment cycles: 08/21/2019 Period 2; and 08/27/2019 Period 2. 1.3. Treasurer’s Report for the Month Ended July 31, 2019 Recommended Action: Review and accept the Treasurer’s Report for the month ended July 31, 2019. 1.4. Landmark Designation for 20331 Orchard Road – Application No. LNDMRK19-0001 Recommended Action: Waive the second reading and adopt the attached ordinance designating the residence at 20331 Orchard Road as a historic landmark. 1.5. Annual Code Update for 2019 Recommended Action: Waive the second reading and adopt the ordinance updating various provisions of the City Code. 1.6. Summary Vacation of Right-of-Way Easement for Scully Avenue Recommended Action: Move to adopt the resolution vacating a Right-of-Way Easement at 12499 Scully Avenue. 1.7. Library Commission Responsibilities and Duties Recommended Action: Approve the resolution amending the Saratoga Library Commission’s responsibilities and duties. 1.8. Classification Project and Review of City’s Compensation Methodology Recommended Action: Authorize the City Manager to enter into an agreement with Koff & Associates in the amount not to exceed $58,880 ($49,067 contract plus 20% contingency if needed) for a citywide classification review project and a review of the City’s compensation methodology. Saratoga City Council Agenda – September 4, 2019 – Page 3 of 5 2. PUBLIC HEARING None. 3. GENERAL BUSINESS 3.1. Notice of Completion – 2018 Pavement Management Program Project Recommended Action: Move to accept the 2018 Pavement Management Program contract as complete and authorize staff to record the Notice of Completion. 3.2. Response to 2018-19 Civil Grand Jury of Santa Clara County Report “Inquiry into Governance of the Valley Transportation Authority” Recommended Action: Authorize the Mayor to execute the letter responding to the 2018-19 Civil Grand Jury of Santa Clara County Report “Inquiry into Governance of the Valley Transportation Authority.” COUNCIL ASSIGNMENTS Mayor Manny Cappello Cities Association of Santa Clara County Board of Directors Cities Association of Santa Clara County-City Selection Committee Cities Association of Santa Clara County-Legislative Action Committee Council Finance Committee Saratoga Area Senior Coordinating Council (SASCC) West Valley Mayors and Managers West Valley Sanitation District Vice Mayor Howard Miller Council Finance Committee KSAR Community Access TV Board Saratoga Ministerial Association Saratoga Sister City Organization Silicon Valley Clean Energy Authority Board of Directors Valley Transportation Authority (VTA) Policy Advisory Committee VTA State Route 85 Corridor Policy Advisory Board Council Member Rishi Kumar Santa Clara County Library Joint Powers Authority Santa Clara Valley Water District Commission West Valley Clean Water Program Authority West Valley Solid Waste Management Joint Powers Authority Council Member Mary-Lynne Bernald Hakone Foundation Board & Executive Committee Public Art Committee Santa Clara County Housing and Community Development (HCD) Council Committee Santa Clara/Santa Cruz Airport/Community Roundtable Saratoga Historical Foundation Saratoga City Council Agenda – September 4, 2019 – Page 4 of 5 Council Member Yan Zhao Association of Bay Area Governments Comprehensive County Expressway Planning Study Policy Advisory Board Hakone Foundation Board Public Art Committee Saratoga Chamber of Commerce & Destination Saratoga CITY COUNCIL ITEMS COUNCIL COMMUNICATIONS CITY MANAGER'S REPORT ADJOURNMENT CERTIFICATE OF POSTING OF THE AGENDA, DISTRIBUTION OF THE AGENDA PACKET, COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT I, Debbie Bretschneider, City Clerk for the City of Saratoga, declare that the foregoing agenda for the meeting of the City Council was posted and available for review on AUGUST 30, 2019 at the City of Saratoga, 13777 Fruitvale Avenue, Saratoga, CA 95070 and on the City's website at www.saratoga.ca.us. Signed this 30th day of AUGUST 2019 at Saratoga, California. Debbie Bretschneider, City Clerk In accordance with the Ralph M. Brown Act, copies of the staff reports and other materials provided to the City Council by City staff in connection with this agenda are available at the office of the City Clerk at 13777 Fruitvale Avenue, Saratoga, CA 95070. Note that copies of materials distributed to the City Council concurrently with the posting of the agenda are also available on the City Website at www.saratoga.ca.us. Any materials distributed by staff after the posting of the agenda are made available for public review at the office of the City Clerk at the time they are distributed to the City Council. These materials are also posted on the City website. In Compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting, please contact the City Clerk at 408.868.1269. Notification 24 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. [28 CFR 35.102-35.104 ADA title II] Saratoga City Council Agenda – September 4, 2019 – Page 5 of 5 09/04 5:45 p.m. Commission Interviews for Parks & Rec | 6:00 p.m. Joint Meeting with Montalvo Arts | 7:00 p.m. Regular Session 09/18 5:00 p.m. Joint Meeting with Sister City | 6:00 p.m. Joint Meeting with Youth Commission | 7:00 p.m. Regular Session 10/02 10/05 5:00 p.m. Joint Meeting with West Valley – Mission Community College Board of Trustees | 6:00 p.m. Joint Meeting - Saratoga Schools and Boards at West Valley College | 7:00 p.m. Regular 1:00 p.m. State of the City in Joan Pisani Community Center 10/16 6:00 p.m. Joint Meeting with Historical Foundation | 7:00 p.m. Regular Session 11/06 6:00 p.m. Joint Meeting with KSAR | 7:00 p.m. Regular Session 11/20 6:00 p.m. Joint Meeting with State Senator Jim Beall Jr. | 7:00 p.m. Regular Session 12/04 5:00 p.m. Commission Interviews | 6:00 p.m. Joint Meeting with Sheriff’s Office |7:00 p.m. Council Reorganization and Regular Session 12/18 6:00 p.m. Study Session – Council Norms | 7:00 p.m. Regular Session Unless otherwise stated, Joint Meetings and Study Sessions begin at 6:00 p.m. in the Linda Callon Conference Room at Saratoga City Hall at 13777 Fruitvale Avenue and Regular Session begins at 7:00 p.m. in the Civic Theater at 13777 Fruitvale Avenue. CITY OF SARATOGA CITY COUNCIL MEETING CALENDAR 2019 City Council Joint Meeting Dinner will be provided at the Joint Meeting. The City Council Regular Session begins at 7:00 p.m. in the Civic Theater. Joint Meeting attendees are invited to share an overview of the Joint Meeting during the Regular Session. JOINT MEETING WITH MONTALVO ARTS September 4, 2019 6:00 p.m. –7:00 p.m. Linda Callon Conference Room, City Hall 13777 Fruitvale Avenue Discussion Topics Introductions Bruce Munro Exhibit Recap Future Programs Other Remarks & Wrap Up 5 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:Public Works PREPARED BY:Mainini Cabute, Environmental Programs Administrator SUBJECT:West Valley Collections and Recycling Presentation RECOMMENDED ACTION: Receive report and provide direction to staff. SUMMARY: At the June 19, 2019 City Council Meeting, Council Member Miller, with support from Council Member Bernald,directed staff to provide an update on recycling protocol at a future City Council meeting. A representative from West Valley Collections and Recycling LLC will provide a presentation to include all of the “Dos and Don’ts” for the Saratoga community. 6 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:City Manager’s Department PREPARED BY:Debbie Bretschneider, City Clerk SUBJECT:City Council Meeting Minutes RECOMMENDED ACTION: Approve the City Council minutes for the Regular City Council Meeting on August 21, 2019. BACKGROUND: Draft City Council minutes for each Council Meeting are taken to the City Council to be reviewed for accuracy and approval. Following City Council approval, minutes are retained for legislative history and posted on the City of Saratoga website. The draft minutes are attached to this report for Council review and approval. FOLLOW UP ACTION: Minutes will be retained for legislative history and posted on the City of Saratoga website. ATTACHMENTS: Attachment A –Minutes for the Regular City Council Meeting on August 21, 2019 7 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 1 of 11 MINUTES WEDNESDAY, AUGUST 21, 2019 SARATOGA CITY COUNCIL REGULAR MEETING At 5:00 p.m., the City Council held a Closed Session in the Joan Pisani Community Center, Patio Room at 19655 Allendale Avenue in Saratoga. At 6:00 p.m., the City Council held a Joint Meeting with the Saratoga Youth in Government participants in the Joan Pisani Community Center, Multipurpose Roomat 19655 AllendaleAvenue in Saratoga. Mayor Cappello called the Regular Session to order in the Civic Theater, Council Chambers at 13777 Fruitvale Avenue in Saratoga at 7:08 p.m. and led the Pledge of Allegiance. Mayor Cappello asked for a moment of silence in recognition of the victims of the recent mass shootings in Gilroy, El Paso, and Dayton. Vice Mayor Miller made a statement about the mass shootings. ROLL CALL PRESENT:Mayor Manny Cappello, Vice Mayor Howard A. Miller, Council Members Rishi Kumar, Mary-Lynne Bernald, Yan Zhao ABSENT:None ALSO PRESENT:James Lindsay, City Manager Richard Taylor, City Attorney Crystal Bothelio, Assistant City Manager Debbie Bretschneider, City Clerk John Cherbone, Public Works Director Debbie Pedro, Community Development Director Lauren Pettipiece, Public Information Officer Dennis Jaw, Finance Manager Christopher Riordan, Senior Planner Manini Cabute, Environmental Programs Administrator Nicole Johnson, Planner II Kayla Nakamoto, Community Engagement Coordinator REPORT ON POSTING OF THE AGENDA City Clerk Debbie Bretschneider reported that the agenda for this meeting was properly posted on August 16, 2019. REPORT FROM CLOSED SESSION Mayor Cappello announced that there is no report from the Closed Session. 8 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 2 of 11 REPORT ON JOINT MEETING Mayor Cappello reported on the Joint Meeting with the Youth in Government participants. ORAL COMMUNICATIONS ON NON-AGENDIZED ITEMS Erik Swanson spoke on firearm safety. Lynn Brewer spoke on the leaf blower regulations. West Valley College Chancellor Brad Davis spoke introduced West Valley College’s new Interim President, Dr. Charles Bullock. West Valley College’s Interim President Dr. Charles Bullock addressed the City Council. ANNOUNCEMENTS Mayor Cappello announced Bollywood in the Park, Personal Emergency Preparedness classes, the University of California Community Education Program’s free composting basics workshop, and the openings in the City’s Commissions. CEREMONIAL ITEMS Youth in Government Recommended Action: Present certificates of completion to the Youth in Government students. Mayor Cappello and the City Council presented the certificates of completion to the Youth in Government participants. 1.CONSENT CALENDAR 1.1. City Council Meeting Minutes Recommended Action: Approve the City Council minutes for the Regular City Council Meeting on July 3, 2019. BERNALD/MILLER MOVED TO APPROVE THE CITY COUNCIL MINUTES FOR THE REGULAR CITY COUNCIL MEETING JULY 3, 2019. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.2. Review of Accounts Payable Check Registers Recommended Action: Review and accept check registers for the following accounts payable payment cycles: 07/02/2019 Period 13; 07/03/2019 Period 1; 07/09/2019 Period 13; 07/09/2019 Period 1; 07/16/2019 Period 13; 07/16/2019 Period 1; 07/23/2019 Period 13; 07/23/2019 Period 1; 9 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 3 of 11 07/30/2019 Period 13; 07/30/2019 Period 1; 08/06/2019 Period 13; 08/07/2019 Period 2; 08/13/2019 Period 13; and 08/13/2019 Period 2. BERNALD/MILLER MOVED TO ACCEPT THE CHECK REGISTERS FOR THE FOLLOWING ACCOUNTS PAYABLE PAYMENT CYCLES: 07/02/2019 PERIOD 13; 07/03/2019 PERIOD 1; 07/09/2019 PERIOD 13; 07/09/2019 PERIOD 1; 07/16/2019 PERIOD 13; 07/16/2019 PERIOD 1; 07/23/2019 PERIOD 13; 07/23/2019 PERIOD 1; 07/30/2019 PERIOD 13; 07/30/2019 PERIOD 1; 08/06/2019 PERIOD 13; 08/07/2019 PERIOD 2; 08/13/2019 PERIOD 13; AND 08/13/2019 PERIOD 2. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.3. Treasurer’s Report for the Month Ended June 30, 2019 Recommended Action: Review and accept the Treasurer’s Report for the month ended June 30, 2019. BERNALD/MILLER MOVED TO ACCEPT THE TREASURER’S REPORT FOR THE MONTH ENDED JUNE 30, 2019. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.4. Revised Contract with Saratoga Chamber of Commerce for Tourism and Informational Services Recommended Action: Approve a five (5) year revised contract with the Saratoga Chamber of Commerce and authorize the City Manager to execute the same. BERNALD/MILLER MOVED TO APPROVE A FIVE (5) YEAR REVISED CONTRACT WITH THE SARATOGA CHAMBER OF COMMERCE AND AUTHORIZE THE CITY MANAGER TO EXECUTE THE SAME. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.5. Contract for Ground Movement Potential Mapping Services with Cotton, Shires and Associates, Inc. for The Mountain Winery Annexation Project Recommended Action: Approve contract with Cotton, Shires and Associates for Ground Movement Potential Mapping services and authorize the City Manager to execute the same. BERNALD/MILLER MOVED TO APPROVE CONTRACT WITH COTTON, SHIRES AND ASSOCIATES FOR GROUND MOVEMENT POTENTIAL MAPPING SERVICES AND AUTHORIZE THE CITY MANAGER TO EXECUTE THE SAME. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 10 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 4 of 11 1.6. Contract Amendment for Code Enforcement and Hearing Officer Services with CSG Consultants, Inc. Recommended Action: Approve a one (1) year contract amendment with CSG Consultants, Inc. (CSG) for Code Enforcement Consulting Services and Administrative Hearing Officer Services and authorize the City Manager to execute the same. RESOLUTION 19-045 BERNALD/MILLER MOVED TO APPROVE A ONE (1) YEAR CONTRACT AMENDMENT WITH CSG CONSULTANTS, INC. (CSG) FOR CODE ENFORCEMENT CONSULTING SERVICES AND ADMINISTRATIVE HEARING OFFICER SERVICES, AUTHORIZE THE CITY MANAGER TO EXECUTE THE SAME, AND APPROVE RESOLUTION NAMING HEARING OFFICER. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.7. Application to the State Housing and Community Development Department for California Senate Bill 2 Planning Grants. Recommended Action: Adopt the attached resolution authorizing staff to submit an application to the State Housing and Community Development Department (HCD) for SB 2 Planning Grants. RESOLUTION 19-046 BERNALD/MILLER MOVED TO ADOPT THE RESOLUTION AUTHORIZING STAFF TO SUBMIT AN APPLICATION TO THE STATE HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT (HCD) FOR SB 2 PLANNING GRANTS. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.8. Saratoga-to-the-Sea Trail Partnership Agreement with Midpeninsula Regional Open Space District – Amendment 1 Recommended Action: Approve Amendment 1 to the existing Partnership Agreement with Midpeninsula Regional Open Space District for the Saratoga-to-the-Sea Trail project and authorize the City Manager to execute the same. Council Member Bernald removed this item from the Consent Calendar to ask questions and discuss the project. Vice Mayor Miller commented on the project. BERNALD/MILLER MOVED TO APPROVE AMENDMENT 1 TO THE EXISTING PARTNERSHIP AGREEMENT WITH MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FOR THE SARATOGA-TO-THE-SEA TRAIL PROJECT AND 11 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 5 of 11 AUTHORIZE THE CITY MANAGER TO EXECUTE THE SAME, WITH A RECOMMENDATION THAT THE FINANCE COMMITTEE REVIEW THE FUNDING FOR THE SINKING FUND AND ONGOING MAINTENANCE COSTS. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.9. Bronze Acorn Sculpture Program Recommended Action: Approve the Public Art Committee's recommendation to implement a Bronze Acorn Sculpture Program. BERNALD/MILLER MOVED TO APPROVE THE PUBLIC ART COMMITTEE'S RECOMMENDATION TO IMPLEMENT A BRONZE ACORN SCULPTURE PROGRAM. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.10. Director of Emergency Services Order of Succession Recommended Action: Approve resolution establishing the Director of Emergency Services order of succession. RESOLUTION 19-047 BERNALD/MILLER MOVED TO APPROVE THE RESOLUTION ESTABLISHING THE DIRECTOR OF EMERGENCY SERVICES ORDER OF SUCCESSION. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.11. Agreement for Employment and Labor Law Services with Mouser Law Firm, A Professional Corporation Recommended Action: Authorize the City Manager to enter into an agreement for employment and labor law services with Mouser Law Form, A Professional Corporation. BERNALD/MILLER MOVED TO AUTHORIZE THE CITY MANAGER TO ENTER INTO AN AGREEMENT FOR EMPLOYMENT AND LABOR LAW SERVICES WITH MOUSER LAW FORM, A PROFESSIONAL CORPORATION. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.12. Realignment of Traffic Safety Commission Terms Recommended Action: Direct staff to correct the staggering of Traffic Safety Commission terms by adjusting the length of 1 of the 3 Traffic Safety Commissioners scheduled to be appointed in December 2019 from 4 years to 3 years. 12 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 6 of 11 BERNALD/MILLER MOVED TO APPROVE THE STAGGERING OF TRAFFIC SAFETY COMMISSION TERMS BY ADJUSTING THE LENGTH OF 1 OF THE 3 TRAFFIC SAFETY COMMISSIONERS SCHEDULED TO BE APPOINTED IN DECEMBER 2019 FROM 4 YEARS TO 3 YEARS. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 1.13. Green Stormwater Infrastructure Plan Recommended Action: Adopt the City of Saratoga’s Green Stormwater Infrastructure Plan that demonstrates long- term commitment to the implementation of green stormwater infrastructure, as required by the City’s stormwater permit. Vice Mayor Miller removed this item from the Consent Calendar to comment on this item. Mayor Cappello invited public comment on this item. The following people requested to speak: Alan Giberson No one else requested to speak. MILLER/BERNALD MOVED TO ADOPT THE CITY OF SARATOGA’S GREEN STORMWATER INFRASTRUCTURE PLAN THAT DEMONSTRATES LONG- TERM COMMITMENT TO THE IMPLEMENTATION OF GREEN STORMWATER INFRASTRUCTURE, AS REQUIRED BY THE CITY’S STORMWATER PERMIT. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 2.PUBLIC HEARING 2.1. Landmark Designation & Mills Act Agreement for 20331 Orchard Road Recommended Action: The Heritage Preservation Commission (HPC) recommends that the City Council: 1. Conduct a public hearing on the proposal to designate the subject property as a historic landmark and a enter into a Mills Act agreement. 2. Introduce and waive first reading of the attached ordinance designating the property as a historic landmark. 3. Direct staff to place the ordinance on the Consent Calendar for adoption at the next regular meeting of the City Council. 4. Adopt the attached Resolution authorizing the City Manager to enter into a Mills Act Agreement for the property located at 20331 Orchard Road upon the effective date of the landmark ordinance. Nicole Johnson, Planner II, presented the staff report. 13 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 7 of 11 Mayor Cappello opened the public hearing and invited public comment on the item. The following people requested to speak: Neighbor spoke in support No one else requested to speak. Mayor Cappello closed the public hearing for this item. RESOLUTION 19-048 BERNALD/KUMAR MOVED TO INTRODUCE AND WAIVE FIRST READING OF THE ORDINANCE DESIGNATING THE PROPERTY AT 20331 ORCHARD ROAD AS A HISTORIC LANDMARK AND TO DIRECT STAFF TO PLACE THE ORDINANCE ON THE CONSENT CALENDAR FOR ADOPTION AT THE NEXT REGULAR MEETING OF THE CITY COUNCIL, AND TO ADOPT THE RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A MILLS ACT AGREEMENT FOR THE PROPERTY LOCATED AT 20331 ORCHARD ROAD UPON THE EFFECTIVE DATE OF THE LANDMARK ORDINANCE. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 2.2. Annual Code Update for 2019 Recommended Action: Conduct the public hearing, introduce and waive the first reading of the attached ordinance updating various provisions of the City Code and direct staff to place the matter on the consent calendar for the next regular meeting of the City Council. Richard Taylor, City Attorney, presented the staff report. Mayor Cappello opened the public hearing and invited public comment on the item. No one requested to speak. Mayor Cappello closed the public hearing for this item. MILLER/BERNALD MOVED TO INTRODUCE AND WAIVE THE FIRST READING OF THE ORDINANCE UPDATING VARIOUS PROVISIONS OF THE CITY CODE AND DIRECT STAFF TO PLACE THE MATTER ON THE CONSENT CALENDAR FOR THE NEXT REGULAR MEETING OF THE CITY COUNCIL.MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 14 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 8 of 11 3.GENERAL BUSINESS 3.1. Park Naming Request from the Parks & Recreation Commission Recommended Action: Consider the Park naming request from the Parks and Recreation Commission and resolution naming the park at the corner of Quito Road and Pollard Road, Friendship Park. John Cherbone, Public Works Director, presented the staff report. Reneé Paquier, Parks and Recreation Commission Chair, addressed the City Council. Mayor Cappello invited public comment on the item. No one requested to speak. RESOLUTION 19-049 BERNALD/ZHAO MOVED TO APPROVE THE RESOLUTION NAMING THE PARK AT THE CORNER OF QUITO ROAD AND POLLARD ROAD AS FRIENDSHIP PARK. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 3.2. Village Design Guidelines Update (continued from July 3, 2019) Recommended Action: Adopt the attached resolution approving the proposed format, updated illustrations, and text amendments the Village Design Guidelines. Nicole Johnson, Planner II, presented the staff report. Mayor Cappello invited public comment on the item. No one requested to speak. RESOLUTION 19-050 CAPPELLO/BERNALD MOVED TO ADOPT THE RESOLUTION APPROVING THE PROPOSED FORMAT, UPDATED ILLUSTRATIONS, AND TEXT AMENDMENTS TO THE VILLAGE DESIGN GUIDELINES. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 15 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 9 of 11 3.3. Climate Action Work Plan Recommended Action: Receive report and provide direction to staff. Manini Cabute, Environmental Program Administrator, presented the staff report. Mayor Cappello invited public comment on the item. No one requested to speak. MILLER/KUMAR MOVED TO REQUEST THAT CITY MOVE FORWARD WITH A CLIMATE ACTION PLAN AS DETAILED IN THE STAFF REPORT, TO RETAIN A CONSULTING FIRM, AND TO CREATE A CLIMATE ACTION PLAN BY NEXT YEAR.MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. 3.4. Campaign Finance Survey Recommended Action: Review and approve the campaign finance survey questions and outreach timeline. Lauren Pettipiece, Public Information Officer, presented the staff report. Mayor Cappello invited public comment on the item. No one requested to speak. The City Council requested that staff revise the survey and return with a more general version on community views on elections and impediments to running for office. Staff was also asked to test survey questions with a small focus group before returning to City Council to ensure questions are easy to understand. The Council additionally asked Vice Mayor Miller to work with staff on the survey. The City Council acknowledged that the requested changes would postpone the survey timeline. COUNCIL ASSIGNMENTS Mayor Manny Cappello Cities Association of Santa Clara County Board of Directors – the Board received a report from Mountain View Council Member Margaret Abe-Koga on state bills, Senator Bob Wieckowski on Senate Bill (SB) 13, Council Member Mary-Lynne Bernald on the Santa Clara/Santa Cruz Airport/Community Roundtable, and a report on Bay Area Quality Management District. Saratoga Area Senior Coordinating Council (SASCC)– the last meeting included updates on the payments from the Veterans Affairs office and payroll. 16 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 10 of 11 Vice Mayor Howard Miller Council Finance Committee –the Committee discussed Rule 20A funds. Saratoga Sister City Organization – the last meeting included planning for the Muko Sister City delegation visit in October 2019. Council Member Miller provided information about activities planned during the delegation visit. Silicon Valley Clean Energy Authority Board of Directors –the Board discussed rates, the Fiscal Year 19/20 budget, the Authority’s credit rating, and PG&E plans for residential meters. Valley Transportation Authority (VTA) Policy Advisory Committee – the Committee discussed criteria for Measure B grants, the Grand Jury report, MTC transportation projects, and a report on BART. VTA State Route 85 Corridor Policy Advisory Board – Vice Mayor Miller shared information about a letter he sent to VTA staff on a State Route 85 noise study. Council Member Rishi Kumar Santa Clara Valley Water District Commission – the Commission received reports on the water supply master plan and an outreach plan on using Santa Clara Valley Water District property trails. Council Member Mary-Lynne Bernald Hakone Foundation Board & Executive Committee – the Board discussed the Gala and the Board is expected to hold a meeting on bids related to the pond at Hakone. Public Art Committee – the Committee has decided to continue the Utility Box painting program in 2020. Santa Clara/Santa Cruz Airport/Community Roundtable – the Roundtable discussed a work plan and strategy. The FAA technical group will be attending the next meeting to answer questions. Council Member Bernald also presented on the Roundtable at the Cities Association meeting. Saratoga Historical Foundation – City Manager James Lindsay attended a meeting and presented on building on City property. Council Member Yan Zhao Hakone Foundation Board – the Board discussed selection of a firm to design improvements related to the pond and has scheduled a special meeting on the topic for further discussion. The Board also discussed the budget. Public Art Committee – the Committee visited potential locations for the bronze sculpture program, is developing a rainy day artwork program, and selected an artistic bicycle rack for Blaney Plaza. Saratoga Chamber of Commerce & Destination Saratoga – the meeting included a report on the Car Show, Bollywood, a Golf tournament, Wine Stroll, and Saratoga Shines. The Chamber will give Council and staff recommendations for Citizen of the Year and Business Person of the Year by September 15. CITY COUNCIL ITEMS Vice Mayor Miller, with support from Mayor Cappello, requested a future Council agenda item for a signage or plaque program for City parks that describes the history of the park location or park name, to be developed by the Parks and Recreation Commission in partnership with the Heritage Preservation Commission. 17 Saratoga City Council Minutes ~ August 21, 2019 ~ Page 11 of 11 Vice Mayor Miller requested that the Mayor send a letter to the San Jose Mayor or San Jose City Council in support of the City of San Jose’s efforts to advance firearm safety. Mayor Cappello agreed to the request. COUNCIL COMMUNICATIONS None CITY MANAGER'S REPORT None ADJOURNMENT MILLER/BERNALD MOVED TO ADJOURN THE MEETING AT 9:38 P.M. MOTION PASSED. AYES: CAPPELLO, MILLER, KUMAR, BERNALD, ZHAO. NOES: NONE. ABSTAIN: NONE. ABSENT: NONE. Minutes respectfully submitted: Debbie Bretschneider, City Clerk City of Saratoga 18 Gina Scott, Administrative Analyst SUBJECT: Review of Accounts Payable Check Registers RECOMMENDED ACTION: Review and accept check registers for the following accounts payable payment cycles: BACKGROUND: The information listed below provides detail for City check runs. Checks issued for $20,000 or greater are listed separately as well as any checks that were voided during the time period. Fund information, by check run, is also provided in this report. REPORT SUMMARY: Attached are Check Registers for: Date Ending Check # 08/21/19 139442 139480 39 584,472.44 08/21/19 08/13/19 139441 08/27/19 139481 139512 32 386,302.82 08/27/19 08/21/19 139480 Accounts Payable checks issued for $20,000 or greater: Date Check # Issued to Dept.Amount 08/21/19 139462 PW 81,886.25 08/21/19 139463 CDD 54,791.48 08/21/19 139479 PW 395,259.47 08/27/19 139486 PW 31,424.00 08/27/19 139489 PW 26,230.55 08/27/19 139492 PW 21,835.00 08/27/19 139510 PW 241,248.37 Accounts Payable checks voided during this time period: AP Date Check #Amount ATTACHMENTS: Check Registers in the 'A/P Checks By Period and Year' report format SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:Finance & Administrative Services Starting Check #Type of Checks Date Accounts Payable Accounts Payable 08/21/2019 Period 2; and 08/27/2019 Period 2. PREPARED BY: Ending Check # Street Supplies CIP Streets Project Kimley-Horn & Associates CIP Grant Street Rpr CIP Admin Project City of Campbell Wattis Construction Fund Purpose CIP Streets Project Prior Check Register Checks Released Total Checks Amount Geotechnical Review General WV Solid Waste Mgmnt Hydrotec Irrigation Wattis Construction N/A Prospect Rd Project StatusReason Issued to Cotton Shires & Associates 2019 Pavement Mtc Iteris CEQA Prep-Mt. Winery Bocce Ball CtCIP Facility Project CIP St Proj/Gas Tax 19 20 21 22 23 24 25 SARATOGA CITY COUNCIL MEETING DATE: September 4, 2019 DEPARTMENT: Finance & Administrative Services PREPARED BY: Ann Xu, Accountant SUBJECT: Treasurer’s Report for the Month Ended July 31, 2019 RECOMMENDED ACTION: Review and accept the Treasurer’s Report for the month ended July 31, 2019. BACKGROUND: California government code section 41004 requires that the City Treasurer submit to the City Clerk and the legislative body a written report and accounting of all receipts, disbursements, and fund balances. The Municipal Code of the City of Saratoga, Article 2-20, Section 2-20.035 designates the City Manager as the City Treasurer. This report is prepared to fulfill this requirement. The following attachments provide various financial transaction data for the City of Saratoga’s Funds collectively as well as specifically for the City’s General (Operating) Fund, including an attachment from the State Treasurer’s Office of Quarterly LAIF rates from the 1st Quarter of 1977 to present. FISCAL STATEMENT: Cash and Investments Balance by Fund As of July 31, 2019, the City had $510,544 in cash deposit at Comerica bank, and $25,847,212 on deposit with LAIF. The City Council’s adopted policy on the Working Capital Reserve Fund states that effective July 1, 2019: for cash flow purposes and to avoid occurrence of dry period financing, pooled cash from all funds should not be allowed to fall below $1,000,000. The total pooled cash balance as of July 31, 2019 is $26,357,756 and exceeds the minimum limit required. City’s Current Financial Position In accordance with California government code section 53646 (b) (3), the City is financially well positioned and able to meet its expenditure requirements for the next six months. As of July 31, 2019, the City’s financial position (Assets $26.8M, Liabilities $4.0M and Fund Equity $22.8M) remains very strong and there are no issues in meeting financial obligations now or in the foreseeable future. Unrestricted Cash Comerica Bank 510,544$ Deposit with LAIF 25,847,212$ Total Unrestricted Cash 26,357,756$ Cash Summary 26 The following Fund Balance schedule represents actual funding available for all funds at the end of the monthly period. This amount differs from the above Cash Summary schedule as assets and liabilities are components of the fund balance. As illustrated in the summary below, Total Unrestricted Cash is adjusted by the addition of Total Assets less the amount of Total Liabilities to arrive at the Ending Fund Balance – which represents the actual amount of funds available. Fund Balance Designations In accordance with Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, the components of fund balance are categorized as follows: “non-spendable fund balance”, resources that are inherently non-spendable from the vantage point of the current period; “restricted fund balance”, resources that are subject to enforceable legal restrictions; “committed fund balance”, resources whose use is constrained by limitations the government imposes upon itself through formal action at its highest level of decision making and remains binding unless removed in the same manner; “assigned fund balance”, resources that reflects a government’s intended use of resources, such intent would have to be established at either the highest level of decision making, by a body, or an official designated for that purpose; and “unassigned fund balance”, net resources in excess of what can properly be classified in one of the other four categories. Currently, the City’s fund balance reserves fall into one of the four spendable categories; restricted, committed, assigned, or unassigned fund balance. ATTACHMENTS A – Change in Total Fund Balances by Fund under GASB 54 B – Change in Total Fund Balances by CIP Project C – Change in Cash Balance by Month D – Local Agency Investment Fund (LAIF) Quarterly Apportionment Rates Total Unrestricted Cash 26,357,756$ Plus: Assets 464,724 Less: Liabilities (4,053,943) Ending Fund Balance 22,768,537$ Adjusting Cash to Ending Fund Balance 27 ATTACHMENT A CHANGES IN TOTAL FUND BALANCE UNDER GASB 54 * Prior year fund balances are unaudited, and do not include budgeted transfers. These figures will be updated for future reports once the FY 2018/19 independent audit is completed.and do not include budgeted transfers. These figures will be updated for Fund Description Prior Year Carryforward 7/1/2019* Increase/ (Decrease) Jul Current Revenue Current Expenditure Transfer In Transfer Out Fund Balance 7/31/2019 General Fund Restricted Fund Balances: Environmental Services Reserve 163,812 - - - - - 163,812 Committed Fund Balances: Hillside Stability Reserve 1,000,000 - - - - - 1,000,000 Assigned Fund Balances: Future Capital Replacement & Efficiency Project Reserve 2,469,080 - - - - - 2,469,080 Carryforwards Reserve - - - - - - - Facility Reserve 2,700,000 - - - - - 2,700,000 Unassigned Fund Balances: Working Capital Reserve 1,000,000 - - - - - 1,000,000 Fiscal Stabilization Reserve 3,150,000 - - - - - 3,150,000 Compensated Absences Reserve 231,708 - - - - - 231,708 Other Unassigned Fund Balance Reserve (Pre YE distribution) 3,949,974 - 479,671 1,450,954 - - 2,978,691 General Fund Total 14,664,574 - 479,671 1,450,954 - - 13,693,291 Special Revenue Landscape/Lighting Districts 1,621,946 - - 1 - - 1,621,945 Debt Service Library Bond 932,880 - - 689,768 - - 243,112 Arrowhead Bond 191,502 - 100,362 770 - - 291,093 Debt Service 1,124,382 - 100,362 690,537 - - 534,206 Internal Service Fund Liability/Risk Management 556,575 - - 280,935 - - 275,640 Workers Compensation 274,917 - - 1,870 - - 273,047 Office Support Fund 120,378 - 942 500 - - 120,821 Information Technology Services 391,823 - - 42,163 - - 349,660 Vehicle & Equipment Maintenance 266,096 - - 7,244 - - 258,852 Building Maintenance 562,505 - - 18,820 - - 543,685 Vehicle & Equipment Replacement 476,587 - - 1,049 - - 475,537 Technology Replacement 489,684 - - - - - 489,684 Facility FFE Replacement 379,555 - - - - - 379,555 Internal Service Fund Total 3,518,120 - 942 352,581 - - 3,166,481 Trust/Agency WVCWP Agency Fund 515,441 - - 15,470 - - 499,971 Capital Project Street Projects 1,837,862 - 92,158 73,589 - - 1,856,431 Park and Trail Projects 436,782 - - 2,405 - - 434,377 Facility Projects 699,315 - - 89,359 - - 609,956 Administrative Projects 510,728 - 4,975 88 - - 515,616 Tree Fund Projects 74,571 - - - - - 74,571 Park In-Lieu Projects 229,701 - - - - - 229,701 CIP Grant Street Projects (906,514) - - - - - (906,514) CIP Grant Park & Trail Projects 78,150 - - - - - 78,150 Gas Tax Fund Projects 307,618 - 52,733 - - - 360,351 CIP Fund Total 3,268,213 - 149,866 165,440 - - 3,252,640 Total City 24,712,675 - 730,841 2,674,983 - - 22,768,537 28 future reports once the FY 2017/18 independent audit is completed. ATTACHMENT B FUND BALANCES BY CIP PROJECT *Prior year fund balances are unaudited, and do not include budgeted transfers. These figures will be updated for future reports once the FY 2018/19 independent audit is completed.and do not include **Fund balance overdrawn due to Resolution No. 19-021, which authorized $250,000 of anticipated FY 2019/20 Streets revenue to be used in FY 2018/19. budgeted transfers. These figures will be updated for future reports once CIP Funds/Projects Prior Year Carryforward 7/1/2019* Increase/ (Decrease) Jul Current Revenue Current Expenditure Transfer In Transfer Out Fund Balance 7/31/2019 Street Projects Annual Road Improvements (153,490) - - 73,589 - - (227,078) ** Roadway Safety & Traffic Calming 35 - - - - - 35 Prospect/Saratoga Median Improvement 684,926 - - - - - 684,926 Fruitvale/Allendale Improvement 250,000 - - - - - 250,000 Annual Infrastructure Maintenance& Repair 37,977 - - - - - 37,977 Village Sidewalk, Curb & Gutter - Phase II Construction 15,530 - - - - - 15,530 EL Camino Grande Storm Drain Pump 372,734 - - - - - 372,734 Saratoga Village Crosswalk & Sidewalk Rehabilitation 44,000 - - - - - 44,000 Quito Road Sidewalk Improvements 43,370 - - - - - 43,370 Saratoga/Sunnyvale Road Sidewalk - - 92,158 - - - 92,158 Fourth Street Bridge Widening 99,837 - - - - - 99,837 Quito Road Bridge Replacement 119,063 - - - - - 119,063 Quito Road Bridge - ROW Acquisition 32,237 - - - - - 32,237 Annual Retaining Wall Maintenance & Repairs 192,899 - - - - - 192,899 Underground Project 98,744 - - - - - 98,744 Total Street Projects 1,837,862 - 92,158 73,589 - - 1,856,431 Parks & Trails Projects Park/Trail Repairs 56,210 - - - - - 56,210 Hakone Gardens Infrastructure Improvements 38,848 - - - - - 38,848 Guava/Fredericksburg Entrance 45,521 - - - - - 45,521 Saratoga Village to Quarry Park Walkway - Design 31,584 - - - - - 31,584 Saratoga to Sea Trail - Construction 264,619 - - 2,405 - - 262,214 Total Parks & Trails Projects 436,782 - - 2,405 - - 434,377 Facility Projects CDD/PW Lobby Remodel 137,363 - - - - - 137,363 Civic Theater Improvements 95,667 - - - - - 95,667 Bocce Ball Court 258,450 - - 89,359 - - 169,091 Senior Center Entrance Remodel 197,585 - - - - - 197,585 Library Building Exterior Maintenance 5,000 - - - - - 5,000 Library - Electric Vehicle Fast Charging Station 5,250 - - - - - 5,250 Total Facility Projects 699,315 - - 89,359 - - 609,956 Administrative and Technology Projects City Website/Intranet 16,949 - - - - - 16,949 Development Technology 88,555 - 4,975 88 - - 93,443 LLD Initiation Match Program 25,000 - - - - - 25,000 Horseshoe Beautification 21,950 - - - - - 21,950 Citywide Accessibility Assessment 100,364 - - - - - 100,364 General Plan Update 219,019 - - - - - 219,019 Risk Management Project Funding 38,891 - - - - - 38,891 Total Administrative and Technology Projects 510,728 - 4,975 88 - - 515,616 29 ATTACHMENT B (Cont.) FUND BALANCES BY CIP PROJECT *Prior year fund balances are unaudited, and do not include budgeted transfers. These figures will be updated for future reports once the FY 2018/19 independent audit is completed.and CIP Funds/Projects Prior Year Carryforward 7/1/2019* Increase/ (Decrease) Jul Current Revenue Current Expenditure Transfer In Transfer Out Fund Balance 7/31/2019 Tree Fund Projects Citywide Tree Planting Program 50,446 - - - - - 50,446 Tree Dedication Program 24,125 - - - - - 24,125 Total Tree Fund Projects 74,571 - - - - - 74,571 CIP Grant Street Projects Highway 9 Safety Improvements - Phase IV 1,870 - - - - - 1,870 Prospect/Saratoga Median Improvement (908,392) - - - - - (908,392) Citywide Signal Upgrade II (76,435) - - - - - (76,435) Saratoga Ave Sidewalk 50,853 - - - - - 50,853 Village Sidewalk, Curb & Gutter - Phase II Construction 1,834 - - - - - 1,834 Saratoga Village Crosswalk & Sidewalk Rehabilitation 3,141 - - - - - 3,141 4th Street Bridge 1,704 - - - - - 1,704 Quito Bridge Replacement 19,029 - - - - - 19,029 Quito Road Bridges - ROW Acquisition (118) - - - - - (118) Total CIP Grant Street Projects (906,514) - - - - - (906,514) CIP Grant Park & Trail Projects Joe's Trail at Saratoga/De Anza 12,809 - - - - - 12,809 Saratoga to the Sea Trail - Design 65,341 - - - - - 65,341 Total CIP Grant Park & Trail Projects 78,150 - - - - - 78,150 Park In-Lieu Projects Park & Trail Safety Improvement 44 - - - - - 44 Quito/Pollard Open Space 20,454 - - - - - 20,454 Hakone Gardens Infrastructure 120,000 - - - - - 120,000 Hakone Koi Pond Improvement 9,320 - - - - - 9,320 Saratoga Village to Quarry Park Walkway - Design 73,811 - - - - - 73,811 Unallocated Park In-Lieu Funds 6,072 - - - - - 6,072 Total Park In-Lieu Projects 229,701 - - - - - 229,701 Gas Tax Fund Projects Annual Roadway Improvements 34,229 - 52,733 - - - 86,962 Prospect/Saratoga Median Improvements 145,555 - - - - - 145,555 Citywide Signal Upgrade II 99,759 - - - - - 99,759 Big Basin Way Sidewalk Repairs 20,990 - - - - - 20,990 Quito Road Bridges 7,085 - - - - - 7,085 Total Gas Tax Fund Projects 307,618 - 52,733 - - - 360,351 Total CIP Funds 3,268,213 - 149,866 165,440 - - 3,252,640 30 ATTACHMENT C CHANGE IN CASH BALANCE BY MONTH 31 ATTACHMENT D March June September December 1977 5.68 5.78 5.84 6.45 1978 6.97 7.35 7.86 8.32 1979 8.81 9.10 9.26 10.06 1980 11.11 11.54 10.01 10.47 1981 11.23 11.68 12.40 11.91 1982 11.82 11.99 11.74 10.71 1983 9.87 9.64 10.04 10.18 1984 10.32 10.88 11.53 11.41 1985 10.32 9.98 9.54 9.43 1986 9.09 8.39 7.81 7.48 1987 7.24 7.21 7.54 7.97 1988 8.01 7.87 8.20 8.45 1989 8.76 9.13 8.87 8.68 1990 8.52 8.50 8.39 8.27 1991 7.97 7.38 7.00 6.52 1992 5.87 5.45 4.97 4.67 1993 4.64 4.51 4.44 4.36 1994 4.25 4.45 4.96 5.37 1995 5.76 5.98 5.89 5.76 1996 5.62 5.52 5.57 5.58 1997 5.56 5.63 5.68 5.71 1998 5.70 5.66 5.64 5.46 1999 5.19 5.08 5.21 5.49 2000 5.80 6.18 6.47 6.52 2001 6.16 5.32 4.47 3.52 2002 2.96 2.75 2.63 2.31 2003 1.98 1.77 1.63 1.56 2004 1.47 1.44 1.67 2.00 2005 2.38 2.85 3.18 3.63 2006 4.03 4.53 4.93 5.11 2007 5.17 5.23 5.24 4.96 2008 4.18 3.11 2.77 2.54 2009 1.91 1.51 0.90 0.60 2010 0.56 0.56 0.51 0.46 2011 0.51 0.48 0.38 0.38 2012 0.38 0.36 0.35 0.32 2013 0.28 0.24 0.26 0.26 2014 0.24 0.22 0.24 0.25 2015 0.26 0.28 0.32 0.37 2016 0.46 0.55 0.60 0.68 2017 0.78 0.92 1.07 1.20 2018 1.51 1.90 2.16 2.40 2019 2.55 2.57 Quarterly Apportionment Rates Local Agency Investment Fund 32 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:Community Development Department PREPARED BY:Nicole Johnson, Planner II SUBJECT:Landmark Designation for 20331 Orchard Road –Application No. LNDMRK19-0001 RECOMMENDED ACTION: Waive the second reading and adopt the attached ordinance designating the residence at 20331 Orchard Road as a historic landmark. BACKGROUND: On August 21,2019 the City Council introduced an ordinance designating the home as a historic landmark and directed staff to place the ordinance on the Consent Calendar for adoption at the next regular meeting of the City Council. ADVERTISING, NOTICING AND PUBLIC CONTACT: This ordinance or a comprehensive summary thereof shall be published in a newspaper of general circulation of the City of Saratoga within 15 days after its adoption. ATTACHMENT: Attachment A -Ordinance 33 ORDINANCE NO. AN ORDINANCE OF THE CITY OF SARATOGA DESIGNATING THE RESIDENCE AT 20331 ORCHARD ROAD (APN 397-23-005) AS A HISTORIC LANDMARK The City Council of the City of Saratoga hereby ordains as follows: Section 1-Findings:After careful review and consideration of the report and recommendations of the Heritage Preservation Commission concerning the residence at 20331 Orchard Road (the “Residence”) together with the application and supporting materials, and following a public hearing at which all interested parties had an opportunity to be heard, the City Council hereby finds that the Residence has special historical, cultural, architectural and aesthetic interest or value as part of the heritage and history of the City, and satisfies one or more of the criteria set forth in Section 13-15.010 of the Saratoga Municipal Code. Specifically: The Residence exemplifies or reflects special elements of the cultural, social, economic, political, aesthetic, engineering or architectural history of the City, the County, the State or the nation in that it represents a Colonial Revival style residence that was constructed in the early 1900’s. The structure exhibits many of the character defining features of such a home and has retained these features through history. The Residence embodies distinctive characteristics of a style, type, period or method of construction, or is a valuable example of the use of indigenous materials in that it is an excellent example of Colonial Revival residential architecture. Distinctive Classical Revival details include accentuated front doors, supported by pilasters or extended forward and supported by slender columns to form an entry porch. The façade normally shows symmetrically balanced windows and a center door. Windows with double hung sashes, usually with multi-pane glazing in one or both sashes, windows frequently are in adjacent pairs. The Residence embodies or contributes to unique physical characteristics representing an established and familiar visual feature of a neighborhood or district within the City in that the home was once the home of the Peck family. The Residence was constructed in 1931 and was designed by Lida Peck. The Peck family lived in the Residence for 34 years and were very active in the community. The Residence was the fourth structure built on Orchard Road. Section 2 – Designation: The Residence is hereby designated as a Historic Landmark pursuant to section 13-15.060 of the Saratoga City Code. Attachment A 34 Section 3- Publication: This ordinance or a comprehensive summary thereof shall be published once in a newspaper of general circulation of the City of Saratoga within thirty (30) days after its adoption. Following a duly notice public hearing the foregoing ordinance was introduced and the first reading was waived at the regular meeting of the City Council of the City of Saratoga held on the 21st day of August 2019, and was adopted by the following vote following a second reading on the 4th day of September 2019: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: E. Manny Cappello MAYOR, CITY OF SARATOGA, CALIFORNIA ATTEST: DATE: Debbie Bretschneider CITY CLERK APPROVED AS TO FORM: DATE: Richard Taylor CITY ATTORNEY 1147184.2 35 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:City Attorney PREPARED BY:Richard Taylor, City Attorney SUBJECT:Annual Code Update for 2019 RECOMMENDED ACTION: Waive the second reading and adopt the ordinance updating various provisions of the City Code. DISCUSSION: At its August 21, 2019 meeting, the City Council conducted a public hearing on the attached ordinance regarding the annual code update. The City Council waived the first reading and introduced the ordinance at the meeting and directed that the ordinance be placed on the consent calendar for approval at the next regular meeting. ATTACHMENTS: Attachment A –Annual Code Update Ordinance 1155533.1 36 ORDINANCE NO. _____ ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SARATOGA AMENDING CITY CODE ARTICLE 2-50 (CONCERNING PROCEDURES FOR FILING AND PROCESSING CLAIMS); ARTICLES 3-30, 4-05, AND 4-06 (CONFORMING REFERENCES TO CITY FEES AND METHODS OF FEE PAYMENT); ARTICLE 15-06 (DEFINITIONS OF FLOOR AREA AND SUBTERRANEAN STRUCTURE); ARTICLE 15-35 (OFF STREET PARKING); ARTICLES 15-45 AND 16-65 (PLANNING COMMISSION REVIEW OF CATEGORICALLY PERMITTED PROJECTS); AND ARTICLE 15-55 (APPEALS OF CONDITIONAL USE PERMITS). The City Council of the City of Saratoga finds that: 1. The City Code of the City of Saratoga requires periodic updates to reflect changes in law, provide clarification to the community, and provide for improved customer service and administration of City business. 2. The City Council referred the amendments to Saratoga Municipal Code Chapters 15 and 16 in this ordinance to the Planning Commission and the Planning Commission held a hearing on those amendments on August 14, 2019. Following consideration of all testimony and written materials, the Planning on August 14, 2019 recommended that the City Council adopt the amendments to Chapters 15 and 16 set forth herein. 3. The City Council of the City of Saratoga held a duly noticed public hearing on August 21, 2019, and after considering all testimony and written materials provided in connection with that hearing introduced this ordinance and waived the reading thereof. 4. This ordinance coordinates the Municipal Code with the City Fee Schedule by replacing various references to specific fee amounts with references to the City fee schedule which is adopted annually following a noticed public hearing. This ordinance does not change the amounts of any fees. Therefore, the City Council of the City of Saratoga hereby ordains as follows: Section 1.Adoption. The Saratoga City Code is hereby amended as set forth in Exhibit A. Section 2.Severance Clause. The City Council declares that each section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance is severable and independent of every other section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance. If any section, sub-section, paragraph, sub-paragraph, sentence, clause or phrase of this ordinance is held invalid, the City Council declares that it would have adopted the remaining provisions of this ordinance irrespective of the portion held invalid, and further declares its express intent that the remaining portions of this ordinance should remain in effect after the invalid portion has been eliminated. 37 Section 3. California Environmental Quality Act The proposed amendments and additions to the City Code are Categorically Exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline section 15061(b)(3). CEQA applies only to projects which have the potential of causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. In this circumstance the amendments to the existing City Code and related sections and additions of provisions and reference appendices to the existing Code; the amendments and additions would have a de minimis impact on the environment. Section 4. Publication. A summary of this ordinance shall be published in a newspaper of general circulation of the City of Saratoga within fifteen days after its adoption. Following a duly noticed public hearing the foregoing ordinance was introduced at the regular meeting of the City Council of the City of Saratoga held on the 21st day of August, 2019 and was adopted by the following vote on September 4, 2019. COUNCIL MEMBERS: AYES: NOES: ABSENT: ABSTAIN: SIGNED: Manny Cappello MAYOR, CITY OF SARATOGA, CALIFORNIA ATTEST: DATE: Debbie Bretschneider CITY CLERK APPROVED AS TO FORM: DATE: Richard Taylor, CITY ATTORNEY 38 Exhibit A - 2019 Saratoga Municipal Code Update The provisions of the Saratoga Municipal Code set forth below are amended or adopted as follows: Text added to existing provisions is shown in bold double-underlined text (example) and text to be deleted in shown in strikethrough (example). Text in italics is explanatory and is not an amendment to the Code except in cases where it directs renumbering of subsections not otherwise amended. 1. Claim Procedures Article 2-50 - PROVISIONS FOR FILING CLAIMS FOR MONEY, DAMAGES OR REFUNDS OF MONEY 2-50.010 - Claim filing procedure. (a) Claims against the City for money, damages or refunds of money erroneously or illegally collected or paid which do not fall under Division 3.6 of Title 1 of the Government Code or are exempted by California Government Code Section 905 from Chapter 1 and Chapter 2 of Part 3 of Division 3.6 of Title 1 of the Government Code and which are not governed by other statutes or regulations expressly related thereto, shall be governed by this Section. (b) A written claim, verified by the person who claims to be entitled to be paid the money or damages or who has paid the money sought to be refunded or by his or her guardian or conservator or the executor or administrator of his or her will or estate, shall be presented within one year after the accrual of the cause of action underlying the claim for money or damages or after the payment of the amount sought to be refunded. Such claims shall be presented and processed as provided within the time limitations and in the manner prescribed by Chapters 1 and 2 of Part 3 of Division 3.6 of Title 1 of the Government Code insofar as said provisions are not in conflict with this Section. (c) No order of a refund may be made until a written claim therefor has been presented to the City in accordance with this Section. No suit for money, damages or a refund may be brought against the City until a written claim therefor has been presented to the City and has been acted upon or has been deemed to be rejected by the City, in accordance with this Section. Only the person who filed the claim may bring such a suit and if another person should do so, judgment shall not be rendered for the plaintiff. 2-50.020 - Processing of claims against City. The City Manager, with the concurrence of the City Attorney, shall be authorized to accept, settle or reject, without prior approval of the Council, claims against the City that fall under Division 3.6 of Title 1 of the Government Code or Section 2-50.010 of the Saratoga City Code, 39 provided that no allowance, compromise or settlement shall exceed ten thousand dollars the City Manager’s spending authority as Purchasing Manager pursuant to section 2-45.030. Upon the written order of the City Manager and written concurrence of the City Attorney, the Finance Director shall cause to be issued a warrant upon the treasury of the City in the amount for which a claim has been allowed, compromised or settled. The City Council shall be notified within ten days of the acceptance or rejection of any claim pursuant to this Section and within ten days of the claimant's acceptance of any settlement proposed pursuant to this Section. 2. Fees and Payments a.Amendments to Section 3-30.30 3-30.030 - Administrative fines, late charges—Collection of fees and costs. (a)The amount of the fines for violating particular provisions of this Code may be set in a schedule of fines adopted from time to time by resolution by the City Council in accordance with State law. The schedule may include escalating fine amounts for repeat violations occurring within specified periods of time. (b)The schedule of fines shall specify the amount of late payment penalty owed for any fine not paid when due. (c) Where no amount is specified by resolution of the City Council, the following fines shall apply: (1) A fine not exceeding one hundred dollars per day for a first violation; (2) A fine not exceeding two hundred dollars per day for a second violation of the same ordinance or permit within one year from the date of the first violation; and (3) A fine not exceeding five hundred dollars per day for each additional violation of the same ordinance or permit within one calendar year from the date of the first violation. Separate fines shall apply for each separate violation, however, in the event that multiple violations are found to occur as a result of an investigation, each such violation listed in the first citation following the investigation shall be considered a "first violation." b.Amendments to Article 4-05 (Sections 4-05.115 and 4-05.130) 4-05.115 - License fee payment; method. (a) Unless otherwise provided in this Section, all fees, owing to the City may be paid by personal check if the financial institution upon which the personal check is drawn is located in California, and the person drafting the personal check is a resident of California and provides proof of residency any regular method of payment accepted by the City . (b) Any person whose personal check payment is returned to the City without payment shall pay a service charge in the maximum amount authorized by California Civil Code 1719. The 40 service charge shall be added to the fee, for which the personal check was drafted and that monetary obligation shall not be deemed to have been paid until both the monetary obligation and the service charge have been honored and paid by the financial institution. (c) For a period of two years, the City will require a person whose personal check payment was returned to the City without payment to pay all fees, by either cash, a cashier's check or postal money order. (d) In addition to the provisions of this Section, a person whose personal check payment is returned to the City without payment is liable for all civil penalties authorized by California Civil Code Section 1719. (e) All negotiable instruments shall be made payable to the order of the City. (f) The penalties provided in this Section shall be imposed in addition to penalties due under Section 4-05.200. 4-05.130 - Duplicate licenses. A duplicate license may be issued by the License Collector to replace any license previously issued hereunder which has been lost or destroyed, but which is still in full force and effect, upon the licensee filing an affidavit attesting to such fact, and at the time of filing such affidavit paying the License Collector a duplicate license fee of one dollar as set forth in the fee schedule established by resolution by the City Council in accordance with State law. c.Amendments to Article 4-06 (throughout) Article 4-06 - LICENSE FEE SCHEDULE 4-06.010 - Generally. The amount of license fees to be paid to the City by any person engaged in or carrying on any profession, trade, calling, occupation or business hereinafter designated, is fixed and established as hereinafter in this Chapter provided in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.020 - Recreation businesses; amusement devices. For every person engaged in the conducting, managing or carrying on of any business hereinafter in this Section mentioned, such license fee shall be in the amount as set forth herein: (a) For any recreational business not otherwise licensed or classified including but not limited to, bowling alleys, movie theaters, riding academies, tennis facilities (public or private), golf courses (public or private), miniature golf courses, and ice and roller skating rinks, the annual license fee shall be one hundred dollars plus ten dollars for each employee over one in number to a maximum of twenty employees in the fee schedule adopted by City Council by resolution in accordance with State law. 41 (b) For any skee ball or bat ball or handball court, shuffleboard, or mechanical or electronic amusement device, or any device, equipment or means of entertainment, the annual license fee shall be fifty dollars in the fee schedule adopted by City Council by resolution in accordance with State law for each alley or device. The name and address of the owner of each such alley or device shall be posted conspicuously thereon. (c) For the business of conducting, managing or operating on their premises jukeboxes, devices for playing of records or music automatically upon the deposit of a coin, slug or other device, or any other mechanical musical device or machine of like character not licensed hereunder, the annual license fee shall be fifty dollars in the fee schedule adopted by City Council by resolution in accordance with State law. (d) For conducting, managing or carrying on a carnival, circus or other similar exhibition, the license fee shall be two hundred fifty dollars per day in the fee schedule adopted by City Council by resolution in accordance with State law. (e) For conducting, managing or carrying on the operation of a theater of the performing arts which features lectures or theatrical performances, such as a comedy, spoken drama, opera, musical, dance or concert, the annual license fee shall be ten dollars per performance or one hundred dollars per year in the fee schedule adopted by City Council by resolution in accordance with State law. (f) For conducting, managing or carrying on the operation of an escort service or escort bureau, the annual license fee shall be five hundred dollars plus one hundred dollars for each employee in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.030 - Contractors and subcontractors. For every person conducting, carrying on or engaging in the business of general contracting, construction subcontracting, electrical, mechanical, plumbing or grading contracting in the City the annual license fee shall be forty-five dollars plus fifteen percent of the permit fee for such business set by resolution of the City Council in the fee schedule adopted by City Council by resolution in accordance with State law. For the purposes of this Section, an owner-builder shall be deemed to be a contractor. 4-06.040 - Delivery services. For every person not having a fixed place of business within the City, and not being herein otherwise licensed or classified, who delivers goods, wares, or merchandise of any kind by vehicle or who provides any service by the use of vehicles in the City, the annual license fee shall be one hundred dollars in the fee schedule adopted by City Council by resolution in accordance with State law. The license fee shall not be prorated. 4-06.050 - Escort services or bureaus. 42 For every person conducting, managing, carrying on or engaging in the business of operating an escort service or bureau, the annual license fee shall be five hundred dollars plus one hundred dollars for each employee in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.070 - Home occupations. For every person engaged in a home occupation in accordance with the provisions of Chapter 15 of this Code the annual license fee shall be one hundred dollars in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.080 - Motion pictures; photography. (a) For every person, company or business engaged in the making of motion pictures on location within the City the license fee shall be as follows: in commercial areas or on public property, five hundred dollars per day, nonproratable; in all other areas of the City, two hundred fifty dollars per day, nonproratable in the fee schedule adopted by City Council by resolution in accordance with State law. (b) For every person or business engaged in taking still photographs for advertisements the license fee shall be twenty-five dollars per day, nonproratable; where the location is on City property, the fee shall be fifty dollars per day, nonproratable in the fee schedule adopted by City Council by resolution in accordance with State law. (c) Fees paid shall be exclusive of payment to City for special public services required to protect the public health, safety and welfare. 4-06.090 - Property leasing. For every person engaged in the business of leasing non-residential property located in the various commercial and industrial zoned districts in the City the annual license fee shall be one hundred dollars, plus three dollars per one thousand square feet, or fraction thereof, of gross leasable floor space either leased or available for lease in excess of five thousand square feet to a maximum of seventy-two thousand square feet in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.100 - Seasonal businesses. For every person engaged in a business which is seasonal in nature, such as Christmas tree sales, Christmas or Easter photography or other such goods, services or wares offered seasonally, the annual license fee shall be one hundred dollars in the fee schedule adopted by City Council by resolution in accordance with State law. 43 2019 Annual Code Update - Page 8 4-06.110 - Security alarms. For every person engaged in the business of installing, selling, leasing, renting, maintaining, servicing or responding to a burglary, robbery or fire alarm system, the annual license fee shall be one hundred dollars plus five dollars for each address serviced in the City to a maximum of forty addresses in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.120 - Vending machines. For every person engaged in the business of conducting, managing or operating any machine or device for the vending of merchandise or services, the annual license fee shall be twenty-five dollars if the cost of the vended item(s) is twenty-five cents or less; forty-five dollars if the cost of the vended item(s) ranges between twenty-five cents and one dollar, fifty-five dollars if the cost of the vended item(s) ranges between twenty-five cents and two dollars, sixty-five dollars if the cost of the vended item(s) ranges between twenty-five cents and three dollars, and seventy-five dollars if the cost of the vended item(s) ranges between twenty-five cents and more than three dollars in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.130 - Residential rental units. Every person engaged in the business of leasing residential property located in the City shall pay an annual license fee of one hundred dollars, plus five dollars per unit for each unit over four in number to a maximum of forty units in the fee schedule adopted by City Council by resolution in accordance with State law. 4-06.140 - General businesses. For every person conducting any business not otherwise classified or taxed under the provisions of this Article, the annual license fee shall be one hundred dollars plus ten dollars per employee to a maximum of twenty employees. For the purposes of this Section, contract employees and agents of the business shall be deemed to be employees, not separate businesses in the fee schedule adopted by City Council by resolution in accordance with State law. 3. Definition of Floor Area 15-06.280 Floor area. "Floor area" means the total enclosed, habitable or accessible floor space of all floors of a building where the interior height of the area is equal to or greater than five feet. The term "enclosed," as used in this Section, means a structure or area with a roof and with three or more walls, or an equivalent percentage of enclosure. The term “wall,” as used in this Section, means any structural device forming a physical barrier by means of glass, wood, masonry, metal, concrete block, wrought iron, wire, or other similar materials with more than 50% of its 44 2019 Annual Code Update - Page 9 façade area is closed. The term “roof,” as used in this Section, means a covering of any solid material over at least seventy-five percent of the area. Floor area is measured to the outside surfaces of exterior walls. In the case of a sloped ceiling or ground surface, the floor area shall be measured to the point at which the interior height is less than five feet. Pursuant to the foregoing, floor area may include halls, stairways, elevator shafts, ducts, service and mechanical equipment rooms, underfloor areas, porches, verandas and similar building elements, garages, attics, crawl spaces and accessory structures. Floor area does not include interior courts, which are areas surrounded on all sides by habitable space but which do not have a roof, as defined in this Section. 4. Subterranean Structure 15-06.685 Subterranean Structure. "Subterranean Structure" includes a cellar, bunker, or other attached or detached structure that (a) is not located beneath the building footprint of a structure; (b) does not encroach into setback areas; and (c) is located wholly underground below natural and/or finish grade, whichever is lower,except for required ingress/egress, lighting and ventilation; and (d) is not visible from the public right-of-way. The floor area of subterranean structures is not counted against a property's maximum floor area and only fifty percent of the floor area is counted against aproperty's maximum site coverage. 5. Off Street Parking 15-35.020 General requirement and regulations for off-street parking spaces. (a)Off-street parking requirements. At the time of initial occupancy of a site or structure or at the time of an alteration or enlargement of a site or structure, there shall be provided off-street parking spaces as prescribed in Section 15-35.030. For the purposes of this Section, the term "alteration or enlargement" shall mean a change of use or an addition which would increase the number of parking spaces required above the total number required prior to such change or addition. (b) Fractional numbers: Except as otherwise specifically provided, if, in the application of the requirements of this Article, a fractional number greater than one-half is obtained, the number of required parking spaces shall be rounded up to the next whole number. (c) Multiple uses: If more than one use is located on a site or structure, the number of parking spaces provided shall be equal to the sum of the requirements prescribed in this Article for each use. (d) Common parking facilities:The off-street parking requirements of this Article may be satisfied by a common parking facility; provided, that the total number of spaces shall be not less than the sum of the individual requirements, and provided further, that a contract between the parties 45 2019 Annual Code Update - Page 10 setting forth the agreement for joint use of a common parking facility is recorded in the office of the County Recorder and a certified copy filed with the City. (e) Floor area calculations:Where parking requirements are determined by floor area, such area shall not include enclosed or covered areas used for off-street parking or loading or interior courts of a building not occupied by a use for which off-street parking is required, but such floor area shall include any exterior balcony used as the sole means of access to a business establishment and any basement, or portion thereof, occupied by a use for which off-street parking is required. (f) Additional requirements:The Planning Commission may require that off-street parking spaces in excess of the number prescribed in Section 15-35.030 be provided for use on a site or structure, if the Commission finds that such additional spaces are necessary to avoid traffic congestion or shortage of curb spaces. (g) Other uses:For a use not specifically listed in Section 15-35.030, the number of off- street parking spaces shall be determined by the Planning Commission or the Community Development Director, based upon the number of spaces required for the most similar specified use and such information as may be available to the Planning Commission or the Community Development Director concerning the parking requirements of the proposed use. (h) Location of Parking:In all districts except a C-H district, the off-street parking spaces prescribed in Section 15-35.030 shall be located on the same site as the use for which the spaces are required, or on an adjacent site or a site separated only by an alley from the use for which the spaces are required. In a C-H district, the off-street parking spaces may be located on or off site as permitted in Section 15-35.035. (i) Compact parking spaces:With respect to any site or structure located within a C-N, C-V, C-H, P-A, R-M or MU-PD district, no more than twenty-five percent of the number of required off-street parking spaces may consist of compact parking spaces. If, in the application of this subsection, a fractional number is obtained, one compact parking space may be provided for a fraction of more than one-half and one standard parking space shall be provided for a fraction of one-half or less. (j) No vehicle repair:No repair work or servicing of vehicles shall be conducted in any parking area. (k) Reserved. 6. Planning Commission Review of Categorically Permitted Projects 15-45.060 Planning Commission design review; public hearing. (a) Pursuant to this Article, the following projects shall receive design review approval by the Planning Commission prior to issuance of a building permit in any A, R-1, HR, or R-OS district: 46 2019 Annual Code Update - Page 11 (1) Any new multi-story main structure or multi-story accessory structure. (2) Any conversion of a single-story structure to a multi-story structure. (3) Any new structure over eighteen feet in height or any existing structure that would exceed eighteen feet in height as a result of the proposed construction. (4) Any project that requires design review under the terms or conditions of any tentative or final subdivision map, use permit, variance or conditional rezoning. (5) Any new dwelling on a lot having a net site area of less than five thousand square feet. (6) Any project that increases the cumulative floor area of all structures on a site to more than six thousand square feet. (7) Any project that, in the opinion of the Community Development Director, may be significantly inconsistent with the design review findings required in Section 15-45.080 of this Article, or may cause excessive damage to the natural environment, or may result in excessive intensification of the use or development of the site. (8) Any addition to a structure over eighteen feet in height that would expand the existing floor area by more than fifty percent or modify the existing footprint by more than fifty percent. (9) All categorically permitted projects located within the Pmw, Pd, and Pdf areas as identified on the City's Ground Movement Potential Map. (b) A public hearing on the application for design review approval under this Article shall be required. Notice of the public hearing shall be given not less than ten days nor more than thirty days prior to the date ofthe hearing by mailing, postage prepaid, a notice of the time and place of the hearing to the applicant and to all persons whose names appear on the latest available assessment roll of the County as owning property within five hundred feet of the boundaries of the site which is the subject of the application. Notice of the public hearing shall also be published once in a newspaper having general circulation in the City not later than ten days prior to the date of the hearing. 7. Conditional Use Permit Appeals 15-55.130 Appeals. (a) Any determination or decision by the Director on a Commercial CUP under subsection 15-55.065(1) of this Article may be appealed only to the City Council in accordance with Section 2- 05.030 of the City Code. Any determination or decision by the Director on a Generator CUP under subsection 15-55.065(2) of this Article may be appealed only to the Planning Commission in accordance with the procedures set forth in Article 15-90 of this Chapter for appeals from administrative decisions and notwithstanding Section 15-90.020, the decision of the Planning Commission on the appeal shall be final and not subject to appeal to the City Council. 47 2019 Annual Code Update - Page 12 (b)Any determination or decision by the Planning Commission under this Article may be appealed to the City Council in accordance with the procedures set forth in Article 15-90 of this Chapter for appeals from decisions of the Planning Commission. 8. Review of Categorically Permitted Projects 16-65.060 Categorically permitted projects in Pmw, Pd, and Pdf areas. (a) General provisions for all categorically permitted projects in Pmw, Pd, and Pdf areas.Categorically permitted projects in Pmw, Pd, and Pdf areas may be considered in deliberations on the associated applications for development and are subject to design review approval by the Planning Commission in accordance with Section 15-45.060 of this Code. A categorically permitted project may be allowed only for a remodel and/or addition to one legally existing structure on a legally existing parcel based on an engineered design (as defined in Section 16-65.025) and limited to a maximum remodel of fifty percent and addition of five hundred square feet or twenty-five percent of the square footage of the existing building or structure, whichever is greater, with the exception that the total floor area of the remodeled structure shall not exceed six thousand square feet. A categorically permitted project may only be approved when it is clearly demonstrated to the City's Geotechnical Consultant that such categorically permitted project will improve the overall safety of existing buildings and will not unduly jeopardize human safety, property on the site, or adjoining public or private property. Nothing in this Section shall be interpreted as authorizing anything in contradiction to any other City policy or regulation, including, without limitation, the City General Plan and all City building and zoning regulations, including but not limited to floor area requirements. No new variance for floor area or site coverage shall be allowed if a categorically permitted project is approved on a site. This provision allows for maintenance, repair, or limited alteration (remodel) of, and/or limited addition to a qualifying existing building or structure whether or not the building or structure has been damaged by ground movement. Total reconstruction of a building or structure may not be approved as a categorically permitted project. When an engineered design is approved for a building or structure, the building or structure can be permitted by Planning Commission to achieve the floor area allowed under the General Plan and Chapter 15 of the Zoning Regulations. Each proposed categorically permitted project shall be evaluated on a case-by-case basis and the Planning Commission shall further limit the building or structure based on the "[Additional] criteria for approval of categorically permitted projects" in Section 16-65.070 below and other applicable regulations. A categorically permitted project shall not be allowed that involves the conversion of a non-dwelling structure to a dwelling unit, as dwelling unit is defined in Section 15-06.240(a) of the Zoning Regulations. [No changes in subsections (b) and (c)] End of Amendments 48 1155125.1 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:Public Works PREPARED BY:Emma Burkhalter, Assistant Engineer SUBJECT:Summary Vacation of Right-of-Way Easement for Scully Avenue RECOMMENDED ACTION: Move to adopt the resolution vacating a Right-of-Way Easement at 12499 Scully Avenue. BACKGROUND: The City has been requested by the owners of 12499 Scully Avenue to vacate a 25-foot-wide right-of-way easement on their property, which is located along the western property line, as shown on Exhibit B to the resolution included as Attachment A.The right-of-way was established prior to the creation of what is currently Scully Avenue, which was offered for dedication to the public via the subdivision map for Tract No. 3738 recorded on April 13, 1966. Staff has reviewed the request and has determined that the criteria for summary vacation are satisfied, in that the easement is unused and is not necessary for future street purposes. The alignment of Scully Avenue offered for dedication on Tract No. 3738 does not include the section of the right-of-way easement that the City is being asked to vacate, and the Public Works Department has no plans to modify Scully Avenue or otherwise use the right-of-way easement. Additionally, the applicant has obtained letters from the local utility companies that may have been affected stating that they have no objection to this vacation (Attachment C).The existing San Jose Water Company easement that lies within the right-of-way easement will remain. Accordingly, the Council can act on the request by adopting the attached resolution. The resolution sets forth the findings for summary vacation of the right-of-way easement. It is therefore recommended that the City Council adopt the resolution vacating the Right-of-Way Easement on 12499 Scully Avenue. ATTACHMENTS: Attachment A –Resolution Vacating a Vacating a Dedicated Right-Of-Way Easement and including Exhibits “A” and “B” Attachment B –Tract Map No. 3738 Attachment C –Utility Company Endorsement Letters 49 RECORDING REQUESTED BY, AND WHEN RECORDED MAIL TO: City Clerk City of Saratoga 13777 Fruitvale Avenue Saratoga, CA 95070 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA VACATING A DEDICATED RIGHT-OF-WAY EASEMENT FOR SCULLY AVENUE WHEREAS, application has been made to City on behalf of the owner of property generall y known as 12499 Scully Avenue (APN 386-04-016 & 017) for summary vacation of a right-of-way easement for Scully Avenue being under, on, and above a portion of the lands described in deed Document No. 24086911, Official Records of Santa Clara County, being described for purposes of vacation of any and all public utility easements, public rights of way, or building restrictions, except as expressly reserved on Exhibits “A” and “B” hereto, which exhibits are hereby incorporated by reference; and WHEREAS, California Government Code Section 66477.2 provides that offers of dedication of any streets, paths, alleys, public utility easements, and similar items, which directly benefit the residents of a subdivision, may be terminated and abandoned in the same manner as prescribed for the summary vacation of streets by Part 3 (commencing with Section 8300) of Division 9 of the Streets and Highwa ys Code; and WHEREAS, Streets and Highwa ys Code Section 8330, et seq. authorizes summary vacation of a street or highway if certain criteria are met; and WHEREAS, the Cit y has determined that the right-of-way easement for Scully Avenue being under, on, and above a portion of the lands described in deed Document No. 24086911 and described on Exhibits “A” and “B” has not been continuously used for the purposes for which it was dedicated for the five consecutive years immediatel y preceding the date of this resolution and is not required for street or highway purposes. NOW, THEREFORE, be it resolved by the Cit y Council of the Cit y of Saratoga as follows: 1. The right-of-way easement for Scully Avenue being under, on, and above a portion of the lands described in deed Document No. 24086911, Official Records of Santa Clara County, being described for purposes of vacation of any and all public utility easements, 50 public rights of way, or building restrictions, except as expressly reserved as shown on Exhibits “A” and “B” is hereb y vacated pursuant to the Chapter 4 of Part 3 of Division 9 of the California Streets and Highway Code; and 2. The facts under which the summary vacation is made are that the right-of-way easement has not been continuously used for the purposes for which it was dedicated for the five consecutive years immediatel y preceding the date of this resolution and is not necessary for street or highway purposes; and 3. From and after the date that this resolution is recorded, said right-of-way easement for Scully Avenue shall no longer constitute a right-of-way easement on said lot; and 4. Except as specifically provided herein, no other public utility easements, public rights of way, or building restrictions applicable to the land identified, described and delineated on deed Document No. 24086911, Official Records of Santa Clara County are vacated by this action. The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga Cit y Council held on the 4th day of September, 2019 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Manny Cappello, Mayor ATTEST: Debbie Bretschneider, City Clerk 1154021.1 51 SCULLY AVEN U E SCULLY AVENUECITY OF SARATOGA1"=30'52 53 54    870 N. McCarthy Blvd, Suite 100 Milpitas, CA 95035 UTILITY ENDORSEMENT APPROVAL August 1, 2019 City of Saratoga– Public Works Attn: Emma Burkhalter 13777 Fruitvale Avenue Saratoga, CA 95070 Dear Ms. Burkhalter: Subject: Request for utility approval of proposed vacation of Public Service Easements, Public Right of Way and Public Utility Easement, at 12499 Scully Avenue, Saratoga, CA 95070 AT&T has reviewed the documents for the vacation of Public Right of Way and Public Utility Easement adjacent, and over Lot 62 of Tract 5233 and have the following response:  No objection to the Vacation No objection to the Vacation, but with the following reservation: Objects to the proposed Vacation for the following reason(s): X A drawing(s) is attached for your information showing existing easement for vacation. See attached Exhibit “A” and “B” for reference. Date: 08/01/2019 Phil Reynolds Right of Way Manager Public Works Coordinator Ph: 408-635-8882 Email: pr7461@att.com AT&T California 55 56 57 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:City Manager’s Department PREPARED BY:Crystal Bothelio, Assistant City Manager SUBJECT:Library Commission Responsibilities and Duties RECOMMENDED ACTION: Approve the resolution amending the Saratoga Library Commission’s responsibilities and duties. BACKGROUND: At the 2019 Commission Work Plan Study Session, the City Council directed the Library Commission to review the City Council Resolution establishing the Commission’s structure, administration, basic responsibilities, duties, and relationships. Upon review of the resolution, the Library Commission recommended several changes for City Council consideration. In addition to the recommended changes from the Library Commission, staff is also proposing language that would allow the Commission to set its own meeting schedule in accordance with City Code Section 2-12.070. The proposed changes are noted in the attached resolution. ATTACHMENTS: Attachment A –Resolution Amending City of Saratoga Library Commission Authorities, Responsibilities, and Operation 58 RESOLUTION NO. 19-__ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA DEFINING AND ESTABLISHING THE AUTHORITIES AND RESPONSIBILITIES OF THE SARATOGA LIBRARY COMMISSION AND ITS OPERATION WHEREAS, the City of Saratoga Library Commission was established by Resolution No. 68 dated June 17, 1959, with further modification to the Commission's structure, terms of office, and operation being made by Resolutions dated February 11, 1971, February 5, 1975, January 5, 1983, and other documents; and WHEREAS, at the request of the City Council, the Library Commission reviewed the City Council policy establishing the Library Commission and identified several recommended changes at the Commission’s June 25, 2019 meeting; and WHEREAS, upon adoption of this resolution the City Library Commission shall function in accordance with the provisions of the attached document. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saratoga as follows: 1. That the Saratoga Library Commission henceforth be governed by the terms set forth in the attached statement of the City of Saratoga Library Commission Authorities, Responsibilities, and Operation (“Library Commission Policy”), which is hereby incorporated into and made a part of this resolution; and 2. That the content of the attached Library Commission Policy shall supersede prior resolutions, guidelines and understandings relating to the Commission and its operation, provided, however that nothing in this resolution or in the attached document shall be construed as restricting or curtailing any of the powers of the City Council or City officers. 3. That the attached Library Commission Policy shall be replaced by a document deleting all words shown in strikeout and adding in ordinary font all words shown in bold double-underlined. The above and foregoing resolution was passed and adopted by the City Council of the City of Saratoga at a regular meeting held on the 4th day of September 2019 by the following vote: AYES: NOES: ABSENT: ABSTAIN: E. Manny Cappello, Mayor ATTEST: DATE: Debbie Bretschneider, City Clerk 59 CITY OF SARATOGA LIBRARY COMMISSION AUTHORITIES, RESPONSIBILITIES, AND OPERATION ADOPTED VIA RESOLUTION 19-__ STRUCTURE Membership. The Library Commission of the City of Saratoga shall consist of five members appointed by the City Council. At least four of the Commission's members shall reside in the City or in the adjacent unincorporated areas within the Library’s service district. Because of the support and usage of the Library by citizens of Monte Sereno, the City of Monte Sereno shall be invited to nominate a candidate to serve as a member of the Commission and to nominate replacements for this member as may be needed. Term of Office, Vacancies and Removal, Officers. The term of office, vacancies and removals, and officers of members of the Commission shall be as set forth in the City Code. ADMINISTRATION Meetings. The Saratoga Library Commission shall hold regular meetings every other month. The date and time of regular meetings shall be approved by resolution of the City Council Commission. Rules of Procedure. The Commission shall in all other respects comply with the requirements for City Commissions as set forth in the City Code and City Council policies adopted from time to time. Compensation. Members of the Commission shall serve without compensation. When in accord with current City policy and when arranged in advance with the City Manager, actual and necessary expenses incurred by Library Commission members acting in their official capacity shall be reimbursed by the City. Records. The staff liaison of the Library Commission shall keep a record of all proceedings, deliberations, findings, determinations and recommendations of the Commission. These records shall be available to the public, and copies shall be filed with the City Clerk. Staff Services. Staff services required by the Commission shall be provided by the City Manager, consistent with City budget authorizations. BASIC RESPONSIBILITIES The Library Commission shall serve as a senior advisory and liaison body. Its basic responsibilities shall include the following: 1. Provide counsel and recommendations on Library policies, budgets, plans and procedures to the Saratoga City Council, the City staff, and the Santa Clara County Library staff and Saratoga Community Librarian.Library Supervisor. 2. Identify and bring to the attention of the City Council, the City staff, and the Santa Clara County Library staff (as appropriate) current and prospective issues and questions relating to Library operation. present and prospective issues and questions relating to Library operation. 3. Participate, along with other appropriate governmental units, in explaining and interpreting matters pertaining to Library operation to Library users, Library support groups, and the general public. 4. Perform such other activities as may be directed by the Saratoga City Council. 60 DUTIES In carrying out its basic responsibilities, the Library Commission shall perform the following duties: 1. Hold formal meetings as required (see preceding Section on "Administration”). 2. Maintain communications with the City Council, City staff, Santa Clara County Library staff, and the Saratoga Community Librarian Library Supervisor on matters related to Library services.that have a significant impact on the Library's budget and operation. 3. Outreach to different community groups to inform them of library services and to receive suggestions on improving Library operation. 4. Maintain within the Commission a continuity of knowledge of the Library, its operation and its problems. 5. Keep generally informed on technical developments that could have a bearing on the Library's operation. 6.Provide support and/or advice on events related to the Library. Participate in the general planning of the library's operation and in the planning of events related to the Library. 7. Work with "Friends of the Saratoga Libraries" and other support groups as may be desirable in the planning of their activities. 8. Promote optimal utilization of the library space, and encourage service mindedness on the part of all having to do with providing Library service to the public. 8.9. Engage the Saratoga Teen Advisory Board Saratoga Library Youth Advisory group in matters concerning use of the Library and programs. RELATIONSHIPS 1. The Library Commission shall report to and be responsible to the Saratoga City Council. The City Manager is authorized to appoint a City staff member to serve as a liaison representative between the Council, staff and the Library Commission on administrative matters. 2. The Library Commission shall have no administrative authority over the Library's operation, or activities of City staff. 3. The Library Commission shall have authority to call meetings, conduct hearings, perform analysis and make contacts with various interested parties in carrying out its basic responsibilities. 4. The Library Commission may act on its own initiative, based on its own assessment of needs, or upon request from other interested parties such as the City Council, the City staff, and the Santa Clara County Library staff. 1156000.1 61 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:Finance and Administrative Services Department PREPARED BY:Monica LaBossiere, Human Resources Manager SUBJECT:Classification Project and Review of City’s Compensation Methodology RECOMMENDED ACTION: Authorize the City Manager to enter into an agreement with Koff & Associates in the amount not to exceed $58,880 ($49,067 contract plus 20% contingency if needed)for a citywide classification review project and a review of the City’s compensation methodology. BACKGROUND: The City of Saratoga’s employees are all non-sworn positions which include 58 authorized permanent positions (56.90 full-time equivalents) that are allocated to 40 classifications. Recently, Koff & Associates developed job descriptions for the new classifications added to the FY 2019/20 budget which freed up the Human Resources Manager to focus on the new recruitments and internal promotions resulting from the reorganization. Koff & Associates is an experienced Human Resources consulting firm that has been providing similar services for cities and other public agencies for almost 30 years. The classification project provides the City an opportunity to update all of the job descriptions at one time. Koff &Associates will analyze the work performed by all existing classifications and develop and update City job descriptions accordingly. The classification project will include staff from the Koff &Associates firm interfacing with employees and managers and building relationships and fostering support of the outcome by City management and all labor groups. The outcome of the project will include updated job descriptions in a uniform format and legally compliant (including Fair Labor Standards Act “FLSA” and Americans with Disabilities Act “ADA” requirements, including essential job functions being identified for each position). In addition to the classification project, Koff &Associates will also conduct a review of the City’s compensation methodology including benchmarked classifications, salary ranges, and internal alignments between classifications. FISCAL STATEMENT: 62 Contract and 20% contingency funding for the classification project and review of the City’s compensation methodology was provided in the FY 2019/20 Human Resources operating budget. ATTACHMENTS: Attachment A: Standard Services Contract Attachment B: Authorized FTE FY 2019/20 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 City of Saratoga, Headcount Report, Human Resources Division Authorized FTE, FY19-20 as of August 27, 2019 FTE Position City Manager Department and Community Services Department 1.0 City Manager James Lindsay 1.0 Assistant City Manager Crystal Bothelio 1.0 City Clerk Debbie Bretschneider 1.0 Public Information Officer Lauren Pettipiece 1.0 Community Engagement Coordinator Kayla Nakamoto 1.0 Facility Coordinator Nina Walker 1.0 Executive Assistant Janet Costa 7.00 City Manager Department and Community Services Department Finance and Administrative Services Department 1.0 Finance & Admin. Services Director Mary Furey 1.0 Finance Manager Dennis Jaw 1.0 IT Supervisor Leo Salindong 1.0 IT Technician Rob Balbuena 1.0 Human Resources Manager Monica LaBossiere 0.75 Human Resources Technician Babette McKay 1.0 Accounting Technician, Lead Karen Caselli 1.0 Accounting Technician Julie Ingraham 0.75 Accounting Technician Vacant 1.0 Administrative Analyst I Gina Scott 0.9 Accountant II Ann Xu 10.40 Finance and Administrative Services Department Community Development Department 1.0 Community Development Director Debbie Pedro 1.0 Building Official Keith Weiner 1.0 Building Inspector Patrick Reed 1.0 Building Inspector Skyelar McLean 1.0 Code Compliance Officer Paige White 1.0 Associate Engineer (Land Development)Vacant 1.0 Permit Techician Jennifer Styczinski 1.0 Senior Planner Chris Riordan 1.0 Planner I Victoria Hernandez 1.0 Planner II Nicole Johnson 1.0 Senior Arborist Kate Bear 1.0 Administrative Assistant Frances Reed 1.0 Office Specialist III Lori McKenna 1.0 Facility Maintenance Manager Thomas Scott 1.0 Facility Maintenance Worker III Joel Rodriquez 1.0 Facility Maintenance Lead Francisco Alvarez 16.0 Community Development Department Public Works Department 1.0 Public Works Director John Cherbone 1.0 Senior Civil Engineer Macedonio Nunez 1.0 Assistant Civil Engineer Emma Burkhalter 1.0 Associate Engineer Poh Yee 1.0 Public Works Inspector Vacant 1.0 Environmental Programs Administrator Mainini Cabute 0.75 Administrative Analyst I Shaheen Sarwari 0.75 Administrative Analyst II Kristin Borel 1.0 Park Maintenance Lead Shawn Gardner 1.0 Park Maintenance Lead Randall Bean 1.0 Park Maintenance Manager Kevin Meek 1.0 Park Maintenance Worker II Dylan Brown 1.0 Park Maintenance Worker I Armando Vazquez 1.0 Park Maintenance Worker II Martin Barajas 1.0 Park Maintenance Worker III Sigfredo Juarez 1.0 Park Maintenance Worker III Roger Marshall 1.0 Street Maintenance Lead Jesus Villalobos 1.0 Street Maintenance Lead Sergio Serrano 1.0 Street Maintenance Manager Rick Torres 1.0 Street Maintenance Worker III Nick Masso 1.0 Street Maintenance Worker III Tony Casale 1.0 Street Maintenance Worker III Tony Fagiano 1.0 Street Maintenance Worker III Richard Amaro 1.0 Administrative Technician Joan Smith 23.50 Public Works Department 56.90 TOTAL C:\Users\mlabossiere\Desktop\City Council Report Templates\Authorized FTE, FY19-20 Headcount Report, Human Resources Division 85 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:Public Works PREPARED BY:Emma Burkhalter, Assistant Engineer SUBJECT:Notice of Completion –2018 Pavement Management Program Project RECOMMENDED ACTION: Move to accept the 2018 Pavement Management Program (2018 PMP) contract as complete and authorize staff to record the Notice of Completion. BACKGROUND: All work for the 2018 PMP has been completed by the City’s contractor,O’Grady Paving Inc., and has been inspected and accepted by Public Works Staff. The scope of work of this project included street paving, rehabilitation of failed roadway sections, micro-surfacing of roadways, repair of dislocated curb and gutter, and restriping. On August 15, 2018, Council awarded a construction contract to O’Grady Paving in the amount of 1,827,741.50. The contract was completed at a final cost of $2,501,042.76 after the completion of additional work, which included rehabilitating over a half mile of sidewalk on Cox Avenue. In order to close out the construction contract and begin the one year maintenance / warranty period, it is recommended that Council accept the project as complete. Furthermore it is recommended that the Council authorizes staff to record the attached Notice of Completion for the construction contract so that the requisite 30-day stop notice for filing of claims by subcontractors or material providers may commence. ATTACHMENTS: Attachment A –Notice of Completion for the 2018 Pavement Management Program Project 86 Recording requested by, And to be returned to: City of Saratoga Public Works Department 13777 Fruitvale Avenue Saratoga, CA 95070 NOTICE OF COMPLETION NOTICE IS HEREBY GIVEN that the work agreed and performed under the contract mentioned below between the City of Saratoga, a municipal corporation, whose address is 13777 Fruitvale Ave., Saratoga, CA 95070, as Owner of property or property rights, and the Contractor mentioned below, on property of the Owner, was accepted as complete by the Owner on the 4th day of September, 2019. Contract Number: N/A Contract Date: August 15, 2018 Contractor’s Name: O’Grady Paving, Inc. Contractor’s Address: 2513 Wyandotte St., Mountain View, CA 94043 Description of Work: 2018 Pavement Management Program Notice is given in accordance with the provisions of Section 3093 of the Civil Code of the State of California. The undersigned certifies that he is an officer of the City of Saratoga, that he has read the foregoing Notice of Acceptance of Completion and knows the contents thereof; and that the same is true of his own knowledge, except as to those matters which are therein stated on the information or belief, as to those matters the he believes to be true. I certify under penalty of perjury that the foregoing is true and correct. Executed at the City of Saratoga, County of Santa Clara, State of California on September 4 th, 2019 CITY OF SARATOGA BY:____________________________ATTEST:____________________________ James Lindsay Debbie Bretschneider, City Clerk City Manager Gov. Code 40814 87 SARATOGA CITY COUNCIL MEETING DATE:September 4, 2019 DEPARTMENT:City Manager’s Department PREPARED BY:Crystal Bothelio, Assistant City Manager SUBJECT:Response to 2018-19 Civil Grand Jury of Santa Clara County Report “Inquiry into Governance of the Valley Transportation Authority” RECOMMENDED ACTION: Authorize the Mayor to execute the letter responding to the 2018-19 Civil Grand Jury of Santa Clara County Report “Inquiry into Governance of the Valley Transportation Authority.” BACKGROUND: On June 18, 2019, the Civil Grand Jury released a report titled “Inquiry into Governance of the Valley Transportation Authority.”The report assesses the effectiveness of Valley Transportation Authority (VTA) governance. The Grand Jury has requested the County of Santa Clara and the fifteen cities in the county respond to Finding 1 and Recommendations 1c, 1d, and 1e.Refer to Attachment A (Draft City of Saratoga Response) to read this finding and the three recommendations. The California Penal Code includes the following requirements for responding to Grand Jury findings and recommendations: Findings Responses must be either “Agree” or “Disagree.” If you disagree in whole or part, you must include an explanation of the reasons you disagree. Recommendations Responses must be one of four possible actions: 1)The recommendation has been implemented, with a summary regarding the implemented action. 2)The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation. 3)The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This 88 timeframe shall not exceed six months from the date of publication of the grand jury report. 4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefor. Other cities are also expected to consider responses to the Civil Grand Jury Report. A supplemental attachment with the proposed responses will be distributed to the City Council and posted on the City website on Tuesday, September 3 after the agenda packets of other cities have been published. ATTACHMENTS: Attachment A – Draft City of Saratoga Response Attachment B – Civil Grand Jury Report 89 Incorporated October 22, 1956 CITY OF SARATOGA 13777 FRUITVALE AVEN UE • SARATOGA, CAL IFORNIA 95070 • www.saratoga.ca.us COUNCIL MEMBERS: Mary-Lynne Bernald Manny Cappello Rishi Kumar Howard Miller Yan Zhao September 4, 2019 Honorable Deborah A. Ryan Presiding Judge Office of the Civil Grand Jury Santa Clara County Superior Court 191 North First Street San Jose, CA 95113 Re: Response to 2018-19 Civil Grand Jury of Santa Clara County Report “Inquiry into Governance of the Valley Transportation Authority” Dear Judge Ryan, Thank you for the opportunity to review and respond to the 2018-19 Civil Grand Jury of Santa Clara County Report “Inquiry into Governance of the Valley Transportation Authority”dated June 18, 2019. Please find the enclosed responses to the findings and recommendations in the report on Valley Transportation Authority (VTA) governance. The responses were approved by the City Council at the September 4, 2019 City Council Meeting. Sincerely, E. Manny Cappello, Mayor City of Saratoga 90 City of Saratoga Response to Findings & Recommendations 2018-19 Civil Grand Jury of Santa Clara County Report “Inquiry into Governance of the Valley Transportation Authority” Finding 1 The VTA Board, currently made up exclusively of elected officials from the Santa Clara County, Board of Supervisors, the City of San José and the other smaller cities in the County, suffers from: A lack of experience, continuity and leadership; Inadequate time for the directors to devote to their duties to the VTA Board due to their primary focus on the demands of their elected positions; A lack of engagement on the part of some directors, fostered in part by the committee system, resulting in VTA functioning largely as a staff-driven organization; Domination, in terms of numbers, seniority and influence, by representatives of the Santa Clara County Board of Supervisors and the City of San José; and Frequent tension between the director’s fiduciary duties to VTA and its regional role, on the one hand, and the political demands of their local elected positions, on the other. Response: Agree The Civil Grand Jury identified a number of concerns associated with the governance and structure of the VTA Board, However, the concerns are not universally applicable among Board Members nor unique to VTA. Many large regionally appointed boards suffer similar issues. Recommendation 1c As constituent agencies of VTA, each of the cities in the County should prepare and deliver to VTA and the County Board of Supervisors a written report setting forth its views regarding VTA governance, with specific reference to the elements listed in Recommendation 1a. These reports should be completed and delivered prior to December 31, 2019. Response: Will not be implemented The City feels that jurisdiction-specific reports are not warranted. A collection of independently prepared reports will require considerable effort and may do little to develop a consensus on appropriate next steps. Additionally, the City of Saratoga feels that the Civil Grand Jury has prepared a thorough and objective analysis of the VTA governance and structure. If further analysis is to be conducted, the City of Saratoga recommends that the study be prepared by a neutral, independent organization, and explore successful transportation agencies that serve a major metropolitan area consisting of multiple municipalities, such as Portland, Oregon. The City of Saratoga would support 91 such an effort but is not in a position to commit that it would happen or specify a time frame. Recommendation 1d Within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation, including appropriate amendments to Sections 100060 through 100063 of the California Public Utilities Code, to improve the governance structure of VTA (which potentially could include an increase in the directors’ term of service, the addition of term limitations and the inclusion of appointed directors who are not currently serving elected officials). Response: Will not be implemented The City of Saratoga believes that it is premature to anticipate the results of studies and reports and that, accordingly, a commitment to propose enabling legislation is not warranted at this time. The City recommends that each city in Santa Clara County retain the discretion to recommend legislative changes that will impact VTA governance, as desired and regardless of follow up studies. Any discussion on potential legislative changes would be scheduled for Saratoga City Council consideration at the request of the Mayor or City Council. Recommendation 1e In order to provide more continuity in the leadership of the VTA Board, within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation amending Section 100061 of the California Public Utilities code to provide that the Chairperson of the VTA Board shall be elected for a term of two years rather than one. Response: Will not be implemented The City of Saratoga believes that it is premature to anticipate the results of studies and reports and that, accordingly, a commitment to propose enabling legislation is not warranted at this time. The City recommends that each city in Santa Clara County retain the discretion to recommend legislative changes that will impact VTA leadership, as desired and regardless of follow up studies. Any discussion on potential legislative changes would be scheduled for Saratoga City Council consideration at the request of the Mayor or City Council. 1155707.1 92 2018-2019 Civil Grand Jury of Santa Clara County June 18, 2019 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY 93 Page 1 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table of Contents GLOSSARY AND ABBREVIATIONS......................................................................................... 2 SUMMARY .................................................................................................................................... 4 METHODOLOGY ......................................................................................................................... 6 DISCUSSION ................................................................................................................................. 8 A Brief History of the VTA ...................................................................................................... 8 Structure of the VTA Board .................................................................................................... 9 The VTA Board in Action ...................................................................................................... 11 VTA’s Operating Performance ............................................................................................. 18 VTA’s Financial Management ............................................................................................... 22 The Extension of Light Rail Service to Eastridge ................................................................ 26 Designing a More Effective Structure for the VTA ............................................................. 35 CONCLUSIONS........................................................................................................................... 40 FINDINGS AND RECOMMENDATIONS................................................................................. 43 Finding 1 .................................................................................................................................. 43 Finding 2 .................................................................................................................................. 44 Finding 3 .................................................................................................................................. 45 Finding 4 .................................................................................................................................. 46 Finding 5 .................................................................................................................................. 46 REQUIRED RESPONSES ........................................................................................................... 47 APPENDIX A – The Guidelines for Member Agency Appointments to the VTA Board of Directors ........................................................................................................................................ 48 APPENDIX B – VTA Operating Statistics and 2017 National Trends ........................................ 50 APPENDIX C – Peer Agency Comparisons ................................................................................ 53 REFERENCES ............................................................................................................................. 58 94 Page 2 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY GLOSSARY AND ABBREVIATIONS AC Transit Alameda County Transit. A peer transit agency to VTA. APTA American Public Transit Association. A national association of which VTA is a member. BART Bay Area Rapid Transit. A peer transit agency. County County of Santa Clara CPC Capital Program Committee. A standing committee of the VTA Board of Directors. DOT US Department of Transportation. A national transportation agency. EBRC Eastridge-BART Regional Connector. Current nomenclature for the Eastridge light rail extension (Phase 2). Farebox recovery ratio Fares collected from passengers divided by operating expenses. FTA Federal Transit Administration. A federal agency providing transit data (see NTD) and services. HMTA Houston Metro Transit Agency HOV High Occupancy Vehicle LRT Light rail transit [system] MTC Metropolitan Transportation Commission. A Bay Area regional transportation coordination and planning agency. Next Network VTA's Next Network is a redesign of the transit network and is one component of an agency-wide effort to make public transit faster, more frequent and more useful for Santa Clara County travelers. NTD National Transportation Database. Database of statistics and metrics maintained by FTA. PUC California Public Utilities Code SCCTD Santa Clara County Transit District SCVWD Santa Clara Valley Water District 95 Page 3 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA Santa Clara Valley Transportation Authority VRH Vehicle Revenue Hours 96 Page 4 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY SUMMARY The Santa Clara Valley Transportation Authority (VTA) is an independent special district created by the California legislature in 1972. Initially, the Santa Clara County (County) Board of Supervisors provided direct oversight of VTA and acted as its Board of Directors. Effective January 1, 1995, pursuant to further legislation, VTA began operating under a separate Board of Directors (VTA Board) composed of elected officials from throughout the County appointed to serve by the County Board of Supervisors and the governing authorities of VTA’s constituent municipalities, with the allocation of VTA Board representation generally based on population. For many years, VTA has been plagued by declining operating performance and recurring budget gaps between projected revenues and expenses (referred to as structural financial deficits) – notwithstanding significant population growth and, in recent years, increased employment levels throughout much of Silicon Valley. The 2003-2004 Santa Clara County Civil Grand Jury conducted an “Inquiry into the Board Structure and Financial Management of the Valley Transportation Authority”1 which found, among other things, that:  The operating performance of VTA compared unfavorably to its peer organizations;  The VTA Board had not effectively managed the finances of VTA, resulting in a substantial structural financial deficit that was projected to increase in the following year; and  A root cause of VTA’s poor performance was the governance structure of the VTA Board, which was “too large, too political, too dependent on staff, too inexperienced in some cases, and too removed from the financial and operational performance of VTA.” To address these issues and attempt to make the VTA Board more responsive, the 2003-2004 Grand Jury proposed various changes to the Board’s structure. Although responses filed by seven of VTA’s constituent municipalities were supportive of some or all the recommended changes, VTA’s response defended the status quo, and most of the other municipalities adopted VTA’s position. Accordingly, the recommended changes were not made. The 2008-2009 Grand Jury again examined the governance of VTA and reiterated some of the same concerns noted in the earlier report, although the focus of the 2008-2009 report was primarily on the role and functioning of the VTA Board’s appointed advisory committees. 1 http://www.scscourt.org/court_divisions/civil/cgj/2004/BoardStructureFinancialMgmtVTA.pdf 97 Page 5 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The 2018-2019 Civil Grand Jury (Grand Jury) revisited the subject of VTA’s governance and the work of the earlier grand juries and found that:  VTA’s operating performance has continued to deteriorate over the last 10 years, relative to both its own historical performance and the performance of its peers, across a wide variety of metrics;  The VTA Board has consistently failed to adequately monitor VTA’s financial performance and has taken action, albeit less than fully effective action, only in the face of imminent financial crises; and  Despite the serious ongoing structural financial deficit, the VTA Board has been unwilling to review and reconsider decisions made years or even decades ago regarding large capital projects (and their attendant operating costs) that are no longer technologically sound or financially viable, based on their costs and projected ridership. The Grand Jury concluded that today, more so than in 2004 or 2009, the VTA Board is in need of structural change to enable it to better protect the interests of the County’s taxpayers and address the many complex challenges presented by emerging trends in transportation, rapidly evolving technology and the changing needs of Silicon Valley residents. The Grand Jury recommends several changes to the governance structure and operations of the VTA Board which will improve the Board’s ability to effectively perform its important oversight and strategic decision-making functions. The Grand Jury further recommends that the VTA Board consider deferral of Phase 2 of the Eastridge light rail extension project pending a full review of the future role of light rail in VTA’s transit system. Such a review should study alternative ways to meet the needs of the residents of East San Jose for modern, efficient public transportation without extending a costly and outdated light rail system and worsening VTA’s already precarious financial condition. In January 2019, the incoming Chairperson of the VTA Board issued a summary of her “2019 Perspectives and Priorities”2 for VTA (see Board of Director’s Meeting, January 7, 2019, section 8.2). Among the goals articulated by the Chairperson was improved board governance. The Chairperson announced that she would “convene a board working group to look at a range of board governance practices,” with a view to improving “board engagement and effectiveness.” The Grand Jury commends the Chairperson for focusing on the important subject of governance. This report may aid the Chairperson and the rest of the Board in that endeavor. 2 http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=12&ID=2133&Inline=True 98 Page 6 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY METHODOLOGY The 2018-2019 Civil Grand Jury began this investigation of VTA on August 15, 2018 and concluded its work on May 29, 2019. The investigation primarily followed from issues highlighted in the report of the 2003-2004 Grand Jury and focused on the structure of the VTA Board of Directors, the effectiveness of its oversight of VTA’s operating and financial performance, its handling of the agency’s persistent structural financial deficit and its ability to address the many complex challenges facing VTA as it confronts the future of transportation in Silicon Valley. The Grand Jury employed a broad range of data gathering and investigative methods, including:  Site visits were made to VTA headquarters, one of the VTA bus yards, VTA’s downtown customer service center, and bus and light rail stops and stations.  The transit system was used, including the purchase of Clipper Cards, riding buses and light rail trains during peak and off-peak hours, stops at and transit through Diridon Station, Eastridge, downtown and North County rail and bus facilities, and assessing access to transit stops by walking to stations and stops and using VTA parking sites.  Interviews were conducted with 37 individuals (some more than once) over more than 50 hours. Interviewees included a substantial number of individuals who served as members of the VTA Board and its committees during 2018 and 2019, senior and mid-level VTA staff personnel, city and county government officials, and representatives of various community stakeholder groups.  Governing documents were reviewed, including: (i) provisions of the California Public Utilities Code (PUC), which established VTA, particularly PUC Sections 100060 through 100063, which set forth the governance structure of the VTA Board; (ii) provisions of the VTA Administrative Code, adopted by the VTA Board to supplement the provisions of the PUC; and (iii) agreements among members of city groups who share representation on the VTA Board regarding the process for rotating their representation on the Board and collectively choosing their appointees. In addition, data regarding attendance records for VTA Board and committee meetings, directors’ terms in office and voting records were examined.  Reports specific to VTA were reviewed, including: (i) the 2003-2004 and 2008-2009 Civil Grand Jury reports and the responses thereto; (ii) a 2007 report entitled “Santa Clara Valley Transportation Authority Organizational and Financial Assessment,” by the Hay Group (Hay Report); (iii) a 2008 report on VTA by the California State Auditor; (iv) a 2010 thesis entitled “Assessing Transit Performance: Recommended Performance Standards for the 99 Page 7 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Santa Clara Valley Transit Authority,” authored by a San Jose State University master degree candidate; (v) a 2016 report entitled “Transit Choices Report,” prepared for VTA by the consulting firm Jarrett Walker +Associates; and (vi) numerous public documents published by VTA and/or available on its website. These and other documents referred to in this report are listed in the Reference Section.  Comparisons were made of VTA’s performance in various operating and financial categories to the performance of other transit organizations utilizing data compiled by the American Public Transportation Association (APTA), the United States Department of Transportation (DOT), The Business Insider, the Federal Transit Administration (FTA) published in the National Transit Database (NTD), the Public Transit Factbook and other federal and industry indices and metrics. Industry and “think tank” reports and articles discussing and comparing transit agency performance, including, among others, the Cato Institute, the Heritage Foundation and the Hudson Institute, were also reviewed. For purposes of comparison, operating data from peer agencies serving the metropolitan areas of Portland, Minneapolis, Houston, Dallas, Salt Lake City, Denver, San Francisco, Sacramento and San Diego were reviewed. In connection with a comparison of governance structures, other agencies, including those serving Los Angeles, Seattle, Vancouver B.C., Austin, Chicago, New York, the District of Columbia and Phoenix, were considered.  Attendance at regularly scheduled meetings of the VTA Board and its committees, including the Administration and Finance Committee, Capital Program Committee (CPC), Governance and Audit Committee, and Ad Hoc Financial Stability Committee between October 2018 and May 2019, as well as Board workshops on the Future of Transportation in Silicon Valley and the proposed biennial budget for fiscal years 2020 and 2021. Audio and video recordings of some of the meetings noted above, as well as other meetings of the VTA Board and certain committees conducted from January 2018 forward were reviewed. 100 Page 8 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY DISCUSSION A Brief History of the VTA Santa Clara County Transit District (SCCTD) was created by the County’s voters in June 1972 and took over operations of three financially strapped private bus companies. SCCTD was initially managed by the County’s Department of Public Works, but in 1974 became a separate agency governed directly by the County Board of Supervisors. SCCTD initially focused on upgrading and replacing its inherited fleet of buses. Assisted by federal funding and a voter approved half-cent sales tax in 1976, SCCTD began to acquire diesel buses and build repair facilities. In the 1980s, SCCTD embarked upon the construction of its light rail transit system, utilizing funding received from the federal government and the proceeds of additional voter-approved sales taxes. The first segment of the light rail system opened for service in late 1987, and the entire initial 21-mile system was completed in 1991. Four extensions of the system were completed by 2005, and additional extensions are currently in the planning stages. SCCTD completed a two-part reorganization, in early 1995. SCCTD was designated the Congestion Management Agency for the County under a joint powers agreement among the County and its 15 cities. At the same time, legislation reconstituting the Board of Directors from five directors, all of whom were County Supervisors, to 12 consisting of two County Supervisors, five San José City Council members and five city council members representing the remaining 14 cities, selected on a rotating basis by the governing authorities of those cities. The name of the agency was changed to the Santa Clara Valley Transportation Authority in 1996, from which the acronym VTA was adopted. Today, VTA is a complex, multi-billion-dollar enterprise that provides bus, light rail and paratransit services within Santa Clara County. In addition, VTA participates in funding other agencies that provide regional rail service, including Caltrain, the commuter rail line serving the San Francisco Peninsula, the Capitol Corridor operating between Silicon Valley and the Sacramento area, and the Altamont Corridor Express, connecting Stockton and San José. VTA also is responsible for county-wide transportation planning, including congestion management, the design and construction of highway, pedestrian and bicycle improvement projects, and the promotion of transit-oriented development. 101 Page 9 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Structure of the VTA Board The present structure of the VTA Board was authorized by legislation effective January 1, 1995. In the legislation proposed by the County Board of Supervisors, the VTA Board was to have been composed of five directly elected members (corresponding to the five county supervisorial districts) and 11 appointed members of various elected bodies in the county. As ultimately adopted, the enabling legislation eliminated the directly elected directors. Instead, PUC Section 100060 provided for a Board consisting of 12 voting members and alternates, all of whom are elected public officials, with the allocation of Board representation generally based on population. Under the formula outlined in PUC Section 100060, and further spelled out in Section 2-13 of the VTA Administrative Code, the VTA Board is composed of:  Two voting members and one alternate who are members of the Santa Clara County Board of Supervisors;  Five voting members and one alternate representing the City of San José;  One voting member and one alternate representing the cities of Los Altos, Los Altos Hills, Mountain View and Palo Alto;  One voting member and one alternate representing the cities of Campbell, Cupertino, Los Gatos, Monte Sereno and Saratoga;  One voting member and one alternate representing the cities of Gilroy and Morgan Hill; and  Two voting members and one alternate representing the cities of Milpitas, Santa Clara and Sunnyvale. All the voting members and alternates, other than the County supervisors, must be currently serving as mayors or city council members of the city they represent. Each of the four groups of smaller cities may collectively determine their representative, and each group has adopted an agreement specifying, in varying degrees of detail, the manner in which the group’s appointed representatives will rotate among the member cities and how individual representatives are to be selected. PUC Section 100060(c) provides, importantly, that “[t]o the extent possible, the appointing powers shall appoint individuals to the VTA Board who have expertise, experience, or knowledge relative to transportation issues.” The VTA Administrative Code and the inter-city agreements contain similar directives. In 2015, the Governance and Audit Committee of the VTA Board adopted a set of Guidelines for Member Agency Appointments to the VTA Board of Directors (Guidelines). The Guidelines 102 Page 10 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY contain several recommendations emphasizing, among other things, the value of a candidate’s expertise and prior experience on the VTA Board or its Policy Advisory Committee. The Guidelines also express the expectation that VTA Board members “[h]ave a fiduciary responsibility to vote for the best interests of the region, not those of their city/county group or appointing jurisdiction,” and “should be able to attend Board and standing committee meetings regularly.” A full copy of the Guidelines is attached as Appendix A. In addition to the voting members and alternates, the VTA Administrative Code provides that members of the Metropolitan Transportation Commission (MTC) who reside in Santa Clara County, and who are not voting members or alternates, shall be invited to serve as ex-officio, non- voting members of the Board3. The VTA Board currently has one such ex-officio member. VTA Board members serve for a term of two years 4. The VTA Administrative Code “strongly encourages” appointing authorities to reappoint representatives to successive terms, and some members do serve multiple terms5. One director who recently left the VTA Board had served as a director or alternate representing San José and the County for a total of 13 years, but missed eight Board meetings in his last two years of service. The two voting directors currently representing the County have served as directors or alternates for a total of 14.5 and 12.5 years. The current Mayor of San José has served as a director for 11.5 years. However, many directors who serve on a rotating basis as representatives of the smaller city groups do not serve successive terms, and directors’ two-year terms are frequently cut short when they are not re-elected, term out or otherwise cease to serve in their elected position. PUC Section 100061 requires the VTA Board to elect its Chairperson and Vice Chairperson annually. Both officers serve for terms of one calendar year, straddling two fiscal years of the VTA (July 1 to June 30). By informal convention, the Vice Chairperson one year becomes Chairperson the following year. 3 VTA Administrative Code Section 2-15 4 PUC Section 100060.2 5 VTA Administrative Code Section 2-14 103 Page 11 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The VTA Board in Action As noted above, the VTA Board consists of a rotating group of elected public officials appointed by the County Board of Supervisors, the City of San José and the four groups of smaller cities. Although the PUC, the VTA Administrative Code and the Guidelines all admonish the appointing authorities to appoint VTA Board members who have appropriate expertise, experience and knowledge, as a practical matter, appointments are often made based more on political considerations than on the candidate’s qualifications. From the candidate’s point of view, appointment to the VTA Board, one of the largest agencies in the County, is generally considered a plus for his or her political advancement. Candidates often express an interest in serving on the VTA Board largely because they see service on the Board as a “resume builder.” As a result, appointees to the VTA Board often have no previous experience with transportation, finance or leadership of a commercial enterprise, let alone one with annual revenues of over a half billion dollars and assets of $5 billion. New directors often know little about VTA’s operations or finances, or the organization and functioning of the Board. In our interviews, the Grand Jury learned that one director was unclear about how directors were chosen or even how many directors there are. Another, representing one of the smaller city groups, was unfamiliar with the provisions of the inter-city agreement governing appointments to the Board and considers appointments as simply the political prerogative of the mayor of the city whose turn it is to make the appointment. Because new directors often have little or no experience with transportation agency operations or transit policy, they face a steep learning curve to even begin to become effective Board members. There is no “boot camp” for new directors. The orientation program provided by the VTA staff is brief and presents only a high-level overview of VTA and basic information regarding Board procedures. When speaking with the Grand Jury, some directors couldn’t recall going through any orientation at all. Workshops are conducted by the VTA staff, generally about twice a year, to provide background information to the directors, often focusing on a specific issue. These workshops are relatively short, sometimes poorly attended and often cancelled. For example, both director workshops scheduled to be held in 2018 were cancelled. A workshop held on February 22, 2019, ambitiously addressed the important and complex topic of “The Future of Transportation in Silicon Valley.” The workshop was attended by eight of the 12 voting members of the VTA Board, three of the six alternates and the ex officio member and lasted a little over three hours. Needless to say, the workshop merely scratched the surface of the topic. A few Board members have attended transportation-related, third party-sponsored programs and seminars on their own initiative to enhance their knowledge on issues of transportation management and policy. There is no formal policy requiring or encouraging attendance at external training programs or conferences or other forms of continuing education. 104 Page 12 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Influence on the VTA Board The City of San José dominates the VTA Board with the ability to appoint five of the 12 directors, which should not be unexpected given San José’s share of the County’s population. Although the San José directors technically are appointed by the San José City Council, the Mayor recommends those appointments. Thus, the Mayor effectively controls the initial selection of the San José directors as well as their tenure on the Board and, therefore, has the ability to exercise considerable influence over a substantial portion of the VTA Board. Since some members of the County Board of Supervisors who have served on the VTA Board previously served on the San José City Council or represented supervisorial districts within San José, these relationships may further enhance San José’s dominance on the VTA Board. Given that representatives of the City of San José and the County Board of Supervisors are often able to serve multiple terms on the VTA Board, they gain experience and the ability to add value. However, representatives of the smaller city groups are subject to the rotational provisions of their inter-city agreements, limiting their ability to serve consecutive terms. Accordingly, the San José and County representatives often dominate the Board in terms of experience and influence as well as numbers. Current voting members of the VTA Board representing San José and the County have served an average of 4.3 years and 10.5 years, respectively, including non-concurrent terms but excluding service by some of them as alternates. However, the current voting members representing the smaller cities have served an average of only 1.9 years. Board Member Preparation All of the members of the VTA Board are primarily focused on their other duties as local elected officials; their position on the VTA Board is clearly of secondary importance to most, if not all, directors and, as noted above, viewed by some principally as a “resume builder” and a one day a month job. Directors confront their other duties as elected officials and, in the case of smaller city directors, private employment or business interests, which themselves may be demanding and time-consuming. Directors often find it difficult to digest the massive amounts of information provided to them by the VTA staff to help them fulfill their responsibilities and prepare for meaningful participation in Board meetings. For example, meeting materials for VTA Board meetings typically run more than 300 pages, and committee meeting packages can be as voluminous. Here too the representatives of the smaller city groups are at a disadvantage. While members of the County Board of Supervisors and the San José City Council have dedicated staffs that can help them review and distill VTA-supplied materials and analyze issues, the representatives of the smaller city groups have little or no staff support. Although members of the VTA staff make themselves available to 105 Page 13 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY meet with directors to discuss VTA business, particularly in advance of monthly meetings, the Grand Jury learned that some directors take little or no advantage of these opportunities. VTA Committees Like many complex organizations — both governmental and private — the VTA Board maintains a system of standing committees. These include the Administration and Finance Committee, the CPC, and the Governance and Audit Committee, among others. The Board also has a number of advisory committees and occasionally appoints ad hoc committees to deal with specific matters. For example, the Ad Hoc Financial Stability Committee (which will be discussed further in this report) was formed in January 2018 and was active throughout 2018. The Board’s committee structure is both a benefit and a detriment. Because Board members have other public and private commitments, it is challenging to deal with all the complex issues affecting VTA; thus, delegation of certain responsibilities is necessary. On the other hand, the committee structure tends to create a certain level of disengagement. Board members are assigned by the Chairperson to serve on standing committees. Several interviewees expressed the opinion that committee assignments are often made with little or no input from the affected Board members, and some committee members only learn of their appointment when they see their name on a list. Because of their various time commitments, Board members often are unfamiliar with or just defer to and trust the staff and their fellow directors regarding issues passed upon initially by committees of which they are not members. When those issues come before the full Board, often by way of its consent calendar, there is little or no discussion or debate. In some cases, matters of some significance are also placed on the consent calendar at the committee level, with the result that only the staff conducts any significant review of the matter. This system works well for some topics, like the approval of construction contracts, but can leave many directors uninformed about important topics to which the full Board should be attentive. Topics like monitoring VTA’s financial affairs and structural financial deficit (which is principally left to the Administration and Finance Committee) and major ongoing capital programs, which are monitored by the CPC demand full engagement by all directors. At the October 2018 Board meeting, in reference to a report on the consent calendar, one of the directors stated, “Instead of going to committee, this type of report should go to the full Board…We should have [Board] workshops on several of these reports.” 106 Page 14 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Alternate VTA Board Members Like the use of committees, the system of alternate Board members has both advantages and disadvantages. Alternate members cannot vote at meetings except when they are attending in place of a voting member. Accordingly, alternate members often do not attend Board or committee meetings. If they attend meetings at all, they typically sit in the audience and do not participate. The existence of alternate Board members is useful in securing a quorum at Board and committee meetings when a voting member is absent. However, the availability of an alternate can serve as justification for voting members to make meetings a lower priority. Additionally, because alternate members frequently are called upon at the last minute, they may be even less prepared than voting members with the agenda and meeting materials. The alternate faces the decision to vote on matters in accordance with his or her own beliefs and opinions, or to vote the way he or she believes the voting member being replaced would have voted. This type of voting “by proxy” is inconsistent with good governance practices and would not be permitted by members of a corporate board of directors. VTA Board Meetings The VTA Board meets once a month in the evening. Board committees meet between three and 11 times a year. Attendance at Board and committee meetings varies greatly. Data compiled by the Grand Jury show that during 2017, 2018 and the first four months of 2019, attendance by voting members at Board meetings and workshops averaged approximately 87%. Individual attendance ranged from 61 to 92%. During the same period, attendance by voting members at committee meetings averaged approximately 86%. Often, directors arrive at meetings late, step away from the meeting, or leave early, but their partial participation is not always reflected in the attendance records. The conduct of Board meetings observed by the Grand Jury is characterized by limited debate and discussion, typically with active participation by only a few directors and some directors not participating at all. The Board does very little on an ongoing basis to monitor and assess directors’ performance. The Grand Jury learned from our interviews that guidelines were developed to aid the Board in measuring its effectiveness, but no action has been taken to implement these guidelines. Board members receive a self-assessment questionnaire at the end of the year, but, according to several interviewees, many are not completed or returned, and no action is taken to follow up or seek feedback. 107 Page 15 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA Board Effectiveness In short, the VTA Board suffers from:  a lack of experience and continuity by many directors;  dominance, in terms of numbers, seniority and influence, by representatives of San José and the County;  inadequate time for the directors to devote to the Board’s oversight and policy-making functions;  a lack of engagement by some of the directors, fostered in part by the committee system, resulting in VTA functioning largely as a staff-driven organization; and  conflicts of interest, which are often irresolvable, between the directors’ fiduciary duty to VTA and its regional role, on the one hand, and the political demands of their local elected positions, on the other. In assessing the effectiveness of VTA, several preliminary observations are in order. First, nothing in this report is meant to suggest that the members of the VTA Board are not honorable and hard-working public servants who are doing their best to perform the duties of a very difficult position under extremely difficult circumstances. Similarly, the Grand Jury has found that the VTA senior management staff is a competent team of professionals doing their best to run a very complex organization within the policy guidance provided by the VTA Board. As one member of the Board stated at the February directors’ workshop, “the staff is like a racehorse that we are keeping in the starting gate.” For their part, members of the senior staff are sometimes reluctant to draw the Board’s attention to matters of concern where they realize there is political resistance on the part of some directors and feel that raising an issue would be a waste of time. Some senior staff members are frustrated by what they perceive as an unwillingness of the Board to support needed action or make important changes at the policy level. Several staff members pointed to other transit districts, such as those in Portland, Austin and San Diego, as agencies whose policymakers are prepared to make tough decisions and take risks to improve public transit. According to some staff members and directors, this frustration, in part, has resulted in a general decline in morale at the senior staff level. The process used in the recent reorganization of senior staff responsibilities has contributed to additional morale problems. Some key members of senior management have recently announced that they will be leaving VTA. 108 Page 16 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The Grand Jury also recognizes that many of the problems facing VTA are not unique to it as a transit organization or to the specific geographic or demographic characteristics of the Silicon Valley. Like many other transit organizations, VTA must deal with nationwide transportation trends, including increasing congestion and competition from ride-hailing companies and corporate-run employee bus services, as well as looming challenges posed by autonomous, driverless vehicles. Moreover, operating a transit system in a largely suburban region presents greater challenges than are typically faced in more densely populated urban areas, having concentrated downtown business centers. It is because of the complex and evolving nature of the problems facing VTA that active and enlightened Board oversight and strategic vision are more essential than ever to the organization’s future success. Having those observations in mind, the Grand Jury has noted that VTA and the VTA Board have been subject to criticism over the years from various quarters. As described above, the 2003-2004 and 2008-2009 Grand Juries were critical of the Board and its governance structure. However, criticism of the management and Board of VTA has not been limited to the Civil Grand Jury. A number of investigations, studies and articles, including the Hay Report which was commissioned by VTA itself, have criticized VTA’s operational and financial performance and the effectiveness of VTA governance. In 2007, one writer referred to VTA as possibly “the nation’s worst managed transit agency, at least among those serving big cities.”6 Even members of the VTA Board have questioned the Board’s effectiveness. For example, at a meeting of the VTA Board in October 2018, one director made the comment, “we have to break the mold of ‘same ole, same ole’…Board, we have to step up and change things.” Upon assuming her position in January 2019, the current Chairperson of the VTA Board announced that she would “convene a board working group [later designated the Ad Hoc Board Enhancement Committee] to look at a range of board governance practices” with a view to improving “board engagement and effectiveness.”7 At the Board workshop in February 2019, the participating directors, by a unanimous show of hands, agreed that VTA needs to make “radical changes” to address its many challenges. As one director put it, “We just had a workshop where we had a long conversation and we pretty much had a consensus where we have to do things differently and think outside the box.” The Ad Hoc Board Enhancement Committee held its first meeting on May 29, 2019. A complete review and assessment of the operations and management of VTA is far beyond the means of the Grand Jury or the scope of this report. Accordingly, the Grand Jury has chosen to focus its attention on the consideration of the effectiveness of the VTA Board’s oversight and policymaking, as exemplified by three areas of concern:  VTA’s poor and continually deteriorating operating performance; 6 “The Nation's Worst Transit Agency", The Antiplanner, March 26, 2007 7 http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=12&ID=2133&Inline=True . See section 8.2 of Minutes for the January 9, 2019 Board of Directors meeting. 109 Page 17 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY  the VTA Board’s inadequate oversight of the agency’s financial performance and its structural financial deficit; and  the VTA Board’s unwillingness, to date, to reconsider the merits of significant pending capital projects that may be indicative of its general ability to guide the organization strategically. 110 Page 18 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA’s Operating Performance VTA Operating Trends The 2003-2004 Grand Jury reviewed VTA’s operations and found that its operating performance compared unfavorably to its own benchmarks as well as the performance of peer agencies. Among other things, its report noted that:  VTA’s operating costs had risen substantially faster than the rate of inflation; and  Fares collected from VTA’s passengers divided by VTA’s operating expenses (referred to as the farebox recovery ratio) for the previous two years had been 11.6% and 12%, compared to the national average of more than 20%, meaning that the taxpayers of Santa Clara County were providing a much greater than average subsidy of transit operations. The 2018-2019 Grand Jury again examined VTA’s operating statistics and found that VTA’s performance has continued to deteriorate over the past 10 years, relative to both its historical performance and the performance of its peers, across a wide variety of metrics, including continuing increases in operating costs and further reductions in farebox recovery. Since the 2008-2009 recession, the population of Santa Clara County has increased by approximately 10.6%. During that 10-year period, bus and light rail vehicle revenue hours (VRH) ,which measures the amount of service VTA offers, increased by 6.4% while operations employee headcount (i.e., operators and maintenance personnel) grew by 8.9%. Total operations expense rose by 63.2% between 2009 and 2018, including a one-year increase of 17.1% between 2017 and 2018 alone. As operations expense increased, overall farebox recovery declined from 13.5% in 2009 to 9.3% in 2017 – substantially worse than the ratios that the 2003-2004 Grand Jury cited as unacceptably low back in 2004. Meanwhile, despite increases in employment and income levels in Silicon Valley, the public’s actual use of VTA’s services (as measured by passenger trips on buses and light rail) dropped by 19.2% between 2009 and 2018 and by 14.8% in the last two years alone. According to U.S. Census Bureau data, in 2017 (the last year for which such data is available), public transit was used as a means of transportation to work by only 4.8% of Santa Clara County’s commuters, little more than the combined percentage of those who walked or biked to work and fewer than the 5.3% who worked at home. Despite the declining use of transit during the last ten years, VTA continued to increase its employee headcount (both operations employees and administrative staff) and add to its fleet of buses and train cars, further increasing operating expense. 111 Page 19 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY As a result of the dramatic increases in operations expense and the concurrent decline in ridership, VTA’s cost per passenger trip for buses and light rail combined increased from $5.61 in 2009 to $9.30 in 2017, 90.5% of which was covered by taxpayer subsidies. Detailed data regarding VTA’s operations are shown in Appendix B, and the trends discussed above are depicted in Figure 1 below. Figure 1 - VTA Operations Trends since 2009 Peer Agency Comparison The FTA issues an annual NTD report summarizing nationwide data and trends for transit agencies throughout the United States. In its most recent survey, for 2017, the FTA reported that for transit agencies serving populations of more than one million people:  Operating cost per passenger trip for buses and light rail ranged from a low of $3.27 to a high of $9.31 with VTA’s cost per trip of $9.28 nearly the highest in the nation;  Operating expense per revenue hour ranged from a low of $84.82 to a median of $123.20 and a high of $249.83 with VTA’s operating expense per revenue hour of $199.79 at about the top 10th percentile in the nation; and -25 0 25 50 75 1 2 3 4 5 6 7 8 9 10Change since 2009 (%)Year Chart Title County Population Full-time Ops Employees Vehicle Revenue Hours (VRH) Passenger (Bus+LR) Trips Ops Expense 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 112 Page 20 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY  Farebox recovery for light rail systems (combined bus and light rail data was not available) ranged from 7.6% to 47.2% with VTA’s light rail system farebox recovery of 7.6%, the lowest in the nation, requiring taxpayers to subsidize 92.4% of the cost of light rail service. Since the FTA surveys contain data for more than 800 transit agencies, including many with operating environments that differ significantly from VTA’s, the Grand Jury selected a cohort of ten peer agencies for further review using the following guidelines:  Only agencies operating both buses and light rail systems were included;  Only agencies serving urbanized communities with population and service areas generally comparable to VTA’s were included; and  Agencies identified as VTA’s peers by interviewees or transit experts were also considered for inclusion. Based on these guidelines, public transit agencies serving the metropolitan areas of Portland, Minneapolis, Houston, Dallas, Salt Lake City, Denver, San Francisco (SF), Sacramento and San Diego were chosen for comparison. Comparisons of FTA operating data for the 10 peer agencies from 2009 through 2017 are shown in Appendix C. In summary, comparative data for three key metrics show the following:  Operating Cost per Trip: VTA’s operating cost per trip was the highest of all 10 peer agencies in each of the nine years. In addition, VTA’s cost per trip increased by 65% over the period, second only to Sacramento’s increase of 86%.  Passenger Trips per Revenue Hour: The effectiveness of VTA’s service, as measured by the number of passenger trips per revenue hour, was consistently among the lowest of the peer group, and second lowest in 2017 and 2018. San Diego, with a lower population density than VTA’s, achieved almost twice the ridership per hour as VTA in the last five years. Not surprisingly, San Francisco, with its significantly greater population density, consistently recorded the highest number of trips per hour.  Farebox Recovery: VTA had the lowest farebox recovery in the peer group for its total operations since 2012. 2012. 113 Page 21 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table 1 below summarizes VTA’s operating performance in 2017 relative to the peer group. Table 1 - VTA Operating Performance Versus Peer Group in 2017 Performance Measure 10-Peer Average Best Worst VTA Rating Service Effectiveness Passenger Trips per Revenue Hour 34.0 63.8 (SF Muni) 23.4 (Dallas) 24.3 (2nd to last) Service Efficiency Operating Cost per Passenger Trip $5.30 $3.00 (San Diego) $9.30 (VTA) $9.30 (Last) Farebox Recovery Ratio 21.5% 34.7% (San Diego) 9.3% (VTA) 9.3% (Last) In short, while all VTA’s peer agencies suffered declines in ridership over the last decade, all but one of the other agencies were more successful than VTA at controlling increases in costs. It is important to note that, despite the continuing decline in key operating metrics, between 2016 and 2019, VTA’s operations management has successfully improved performance in a number of significant areas, including: a 20% improvement in miles between major mechanical schedule loss; a 24% reduction in passenger concerns (complaints); a 3% improvement in light rail miles between chargeable accidents; and a 7% improvement in light rail on-time performance. In addition, the Grand Jury had direct experience utilizing VTA transportation services during our investigation and observed vehicles that were clean, performance that was generally on-time, and operators who were friendly and resourceful. 114 Page 22 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA’s Financial Management VTA is highly dependent on sales tax for its operating revenue. Currently, sales tax receipts provide approximately 80% of VTA’s revenue, while farebox revenue provides about 7%. Remarkably, in an environment of robust population and economic growth, VTA’s farebox receipts have decreased from $36.2 million in 2009 to $34.5 million in 2018, a decline of 5%. Over that same period, operating expenses have increased by a staggering 51%. Adding further pressure to VTA’s revenue stream is the steadily decreasing contribution of federal operating grants, which peaked at $59 million in 2010 and fell to $3.8 million in 2018. To address its revenue shortfall, VTA has begun to tap Measure A and Measure B sales tax receipts, originally earmarked for capital improvements, to help fund transit operations. For 2018 and 2019, the VTA Board approved the transfer of $44 million and $14 million, respectively, of these funds to supplement VTA’s operating revenue. To further address the shortfall, VTA has drawn down its reserves to help fund operating deficits. Given its history of low fare collections, declining ridership and uncertain governmental assistance, the answer would seem to be increased attention to cost management, with an emphasis on labor costs, by far the largest component of VTA’s operating expense. However, VTA’s combined operations and administrative headcount continues to rise each year despite the decline in ridership. The Grand Jury found the VTA Board has not vigorously addressed these issues through its budget process by embracing the type of comprehensive cost management strategy that is called for by the environment of limited resources in which VTA is currently operating. The 2018-2019 Budget Process VTA operates on a biennial budget cycle with a budget for the following two fiscal years adopted in June of each odd-numbered year. The proposed budget is reviewed by the Administration and Finance Committee and forwarded to the full VTA Board with the Committee’s recommendation. The proposed 2018-2019 budget, as recommended by a three-to-one vote of the Administration and Finance Committee in May 2017, showed projected operating deficits of $20 million and $26 million for fiscal years 2018 and 2019, respectively, and similar deficits for subsequent years. Taking into account the annual need for local funds on the order of $30 million to support VTA’s capital programs, the total gap between projected revenues and expenses (referred to as a structural financial deficit) contemplated by the budget was between $50 and $60 million. Compounding the widening budget gap was the fact that, over the preceding six years, operating expenses had grown twice as fast as revenues, and VTA had consistently failed to meet its ridership and farebox recovery projections. For example, in fiscal years 2016 and 2017, VTA’s farebox recovery had fallen short of budget projections by 7.3% and 18.9%, respectively. 115 Page 23 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Nevertheless, rather than undertaking a thorough review of the proposed budget and making hard decisions regarding meaningful reductions in operating and capital expenses, or even sending the budget back to the Committee for further study, the VTA Board adopted the budget on June 1, 2017, by a vote of eleven to one, thereby assuring operating deficits for the following two years. To no one’s surprise, the projected operating deficits materialized and were largely funded by drawing down VTA’s reserves. Capital reserves, which had stood at $49.5 million at June 30, 2017, had been depleted to $5 million by the middle of the following year. Ad Hoc Financial Stability Committee In January 2018, the incoming Chairperson of the VTA Board recognized that some action had to be taken to address the structural deficit problem, which had become critical. Rather than engaging the full Board, for example by convening an all-day workshop, to address the problem that the Board and the Administration and Finance Committee should have been actively monitoring all along, the Chairperson chose to create an Ad Hoc Financial Stability Committee. The Committee was chaired by an ex officio member of the Board and included only two actual voting directors. The Committee then invited a group of approximately 12 “stakeholders” to participate. Stakeholders included employees, representatives of organized labor and several individuals from community organizations – each with their own agenda, but none with the fiduciary duty to make tough policy decisions solely in the best interests of VTA and County taxpayers. As the 2003-2004 Grand Jury report noted, “[i]t is the fiduciary responsibility of the Board, not a committee, a business lobbying group, or business community leaders, to provide oversight and direction” regarding VTA’s operations and financial management. The use of an ad hoc committee was hardly a new concept for the VTA Board. The Board had historically followed a pattern of waiting for a financial crisis to arise and then appointing an ad hoc committee. That committee would attempt to deal with the crisis and come up with a fix. In most cases, the fix would last a few years, relying primarily on new sources of revenue that would hopefully emerge. However, in any event, the composition of the Board — and responsibility for dealing with the problem — would have changed. The Board would then realize that another financial crisis was taking place, and the process would be repeated. Most recently, Ad Hoc Financial Stability Committees had been formed to deal with financial crises in 2001 and 2010. The Ad Hoc Financial Stability Committee met sporadically between March and December 2018 to discuss the structural deficit, its implications and potential cost-saving measures. Three of the nine scheduled meetings were cancelled. At a meeting of the Committee in August 2018, in response to a question, VTA’s Chief Financial Officer underscored the urgency of VTA’s financial situation by stating that VTA could continue its operations for no more than 18 to 24 months before 116 Page 24 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY going “off a cliff.” On June 20, 2018, the Committee held a three-hour workshop to discuss strategies and solutions to address the budget and structural deficit. During the workshop, the stakeholders broke out into working groups to consider possible solutions. Although no consensus was reached, a wide variety of suggestions were made, which were reviewed by the VTA staff and discussed at subsequent meetings. These recommendations included, among other things, substantial fare increases, implementation of wage cuts, a hiring freeze, a reduction of fleet size, and a delay of further capital expenditures on light rail expansion. At its final meeting in December 2018, the Ad Hoc Financial Stability Committee concluded that the defeat in November of a ballot measure to repeal fuel taxes and vehicle fees (California Proposition 6) and the collection of sales tax on out-of-state sales beginning at some unspecified point in the future (later determined to be April 2019) would infuse additional revenues into the budget. The fuel and vehicle monies would result in an additional $23 to $27 million per year in annual revenues. The sales tax would, when implemented, increase revenues by $5.5 million per year. After these painless fixes, the Committee then addressed the annual structural deficit of approximately $25 million that still remained by proposing three initiatives:  reducing the proposed increase in bus and rail service hours – not from their actual fiscal 2018 levels, but from the even higher levels originally budgeted for fiscal year 2019 as a part of VTA’s Next Network program – saving approximately $15 million annually;  a fare increase indexed to inflation, saving approximately $2 million annually (which was subsequently deferred until 2021); and  a voluntary early-retirement program projected to save another $1 million annually. After six meetings over a nine-month period (including the three-hour workshop) involving three directors and a dozen stakeholders, as well as untold hours of VTA staff support time, the Ad Hoc Financial Stability Committee recommended a total of only $18 million in projected cost savings to address the remaining $25 million deficit target, leaving a $7 million gap unaddressed. Several serious cost-cutting measures brought forward at the workshop were not actively considered. At its meeting, on December 6, 2018, the VTA Board unanimously accepted the recommendations of the Committee, and the Committee stood down. By any measure, the VTA Board’s oversight of the agency’s financial affairs, as exemplified by its adoption of the 2018-2019 budget and the handling of the built-in structural financial deficit, has been weak and ineffective. The inability of the VTA Board to meaningfully address the deficit can be attributed, in part, to the lack of financial expertise on the Board, a lack of preparation and engagement on the part of some directors — exacerbated by the delegation of the problem to the Ad Hoc Financial Stability Committee — and the VTA Board’s inability or unwillingness to deal 117 Page 25 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY with controversial and politically-charged topics such as labor costs and expensive capital programs. The 2020-2021 Budget Process The VTA Board will consider VTA’s proposed biennial budget for fiscal years 2020 and 2021 at its meeting on June 6, 2019. The proposed budget shows net surpluses of approximately $2 million in 2020 and $4 million in 2021. However, the proposed budget does not take into account the outcome of pending labor negotiations with the Amalgamated Transit Union (ATU) that have been ongoing since August 2018. VTA has reported that its current proposal to the ATU, if accepted, would result in a total additional cost of $30.9 million over the next three years. Since the VTA's proposal is the best possible outcome of the negotiations, the budget understates expenses and virtually assures continuing deficits. Other risks acknowledged in the budget could further increase these deficits. 118 Page 26 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The Extension of Light Rail Service to Eastridge Light Rail in the United States Light rail transports people using electric motive power and light-weight rails (hence the name). Light rail transit (LRT) systems, originally called trams or trolleys, evolved in the early 1900s to move employees to businesses and industries located in downtown or central business districts. They were less expensive to build than traditional heavy railway systems, and the cars were likewise less expensive to build and operate. In the late 1960s, private transportation companies, including those that operated LRT systems, began to struggle financially and subsequently were transitioned to public ownership with the expectation that better public transport could be achieved using a mix of city, state and federal funding. LRT systems in the United States have not met the original expectations of transit planners or the public. Coupled with the downward trend of public transit ridership and expanding infrastructure regulations, LRT systems have experienced ever-increasing installation and operations costs. Due in part to its high costs and fixed routes, light rail is now viewed by many industry experts as a technology whose time has passed. In October 2017, Randal O’Toole, a senior fellow with the Cato Institute and a recognized expert in light rail policy analysis, recommended the following: 8 “First, transit agencies should stop building rail transit. Buses made most rail transit obsolete nearly 90 years ago. Buses can move more people faster, more safely, and for far less money than light rail, meaning light rail was obsolete even before San Diego built the nation’s first modern light-rail line in 1981.” … “Second, as existing rail lines wear out, transit agencies should replace them with buses. The costs of rehabilitating lines that have suffered from years of deferred maintenance is nearly as great as (if not greater than) the cost of building them in the first place.” Cities whose densities and post-automobile development sprawl aren’t particularly suitable for efficient light rail service have begun to reexamine the viability of constructing, operating and maintaining expensive light rail systems. For example, in March of this year, the Phoenix City Council voted to delay and likely kill an ambitious expansion of its existing light rail system. Calling it a “train to nowhere,” city leaders determined that the reallocation of capital funds from light rail to an expansion of a flexible bus system and the repair of a deteriorating road system would be a better use of the taxpayers’ money and have a more positive impact on transit 8 “The Coming Transit Apocalypse”, Randal O’Toole, Cato Institute, October 2017 119 Page 27 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY effectiveness.9 A Phoenix Arizona initiative measure that will be on the ballot in August 2019 proposes to halt six additional light rail extension projects that were previously approved by the Phoenix voters in 2015 and forbid the city from funding any other future light rail extensions.10 VTA’s Light Rail System Santa Clara County’s LRT system, first proposed in the early 1980s, was conceived as a loop connecting to a future integration of Bay Area Rapid Transit (BART) and the San José Airport with transfer points throughout the County with feeder lines to support access to and from the loop to business and residential areas. The intent was to transport large numbers of residents quickly — at upwards of 55 mph — and cost-efficiently to and from jobs, entertainment and shopping, and to link San José and Santa Clara County with the entire BART system. As funding issues arose and interest group views emerged, the loop concept was abandoned in favor of direct spoke- like connections between downtown centers (e.g., San José) and various residential and business areas. VTA’s LRT began service in December 1987 with a 6.8-mile corridor between Santa Clara and downtown San José. An additional 14.3 miles were added by 1991 in 5 separate extensions (under the auspices of the SCCTD). VTA then followed with 4 more extensions: into Mountain View (1999), Milpitas (2001), East San José (2004) and the last corridor, Diridon to Winchester, completed in October 2005. The ultimate construction cost of this system was almost $2 billion. Today, VTA operates a 3-line LRT system consisting of 42 route miles, 61 stations and 21 park- n-ride lots. Due to unprecedented declines in revenues beginning in 2008, the implementation plan for further light rail expansion was modified to provide for construction of additional extensions in phases. Two significant extensions, to Eastridge and Vasona Junction, remain under consideration by VTA. Overly optimistic ridership projections justified the construction of the $2 billion light rail system in an environment that did not have the trip densities necessary to support this mode of transit. The federal government had its own doubts and initially did not approve funding, thereby creating the necessity of funding the project, in part, with local tax measures. As suggested above, the design and layout of the VTA LRT system deviated from the initial concepts, largely driven by political and financial considerations rather than strategic decisions. Despite the high capital costs of the system, the airport remains inaccessible directly via light rail, there is uneven access to jobs, entertainment and shopping, and operating speeds are far below 9 “Phoenix Votes to Delay, Likely Kill, West Phoenix Light-Rail Line", Jessica Boehm, Arizona Republic, March 21, 2019 10 “Phoenix Voters Could Kill Light Rail to These 6 Neighborhoods”, Jessica Boehm, Arizona Republic, April 15, 2019 120 Page 28 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY those expected or technically feasible. VTA LRT has been in operation for over 30 years but continues to underperform in effectiveness and ridership. VTA LRT Operational and Financial Challenges Since its inception, VTA’s light rail system has struggled with operational and financial inefficiencies caused by low ridership and high operating costs. Despite a vibrant local economy with burgeoning job growth and population expansion, the public’s interest in and utilization of light rail has deteriorated. Over the past ten years, light rail ridership has declined by 21% and, currently, fewer than 1% of Santa Clara County residents regularly utilize light rail. During the same period, the farebox recovery ratio for light rail has declined 36%. In just the past five years, light rail ridership has declined 15% while operating expenses have increased 54%. Meanwhile, VTA has continued to increase capacity without a corresponding demand for its product, resulting in higher operating costs of which less than 8% is covered by fare revenue. Put more bluntly, the taxpayers pay for more than 92% of the LRT system’s operating costs. VTA has failed to accurately estimate the ongoing operating and capital costs of maintaining the light rail system, a fact that has led, in part, to its recurring financial deficits. Table 2 below outlines metrics comparing operations of VTA’s light rail system versus its peers (using 2017 NTD data) that reveal its poor performance, including:  Cost per Passenger: Highest among peers ($11.61)  Subsidy per Passenger Trip: Highest among peers ($10.73)  Operating Cost per Hour: Highest among peers ($487.58)  Farebox Recovery Ratio: Lowest among peers (7.6%)  Passenger Trips: Lowest among peers (9.1 million miles)  Passengers Boarded per Hour: Second lowest among peers (42) 121 Page 29 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table 2 - VTA Light Rail Peer Statistics (2017) Legend: Ms = value in millions Worst in peer group 2nd worst in peer group In light of the VTA LRT system’s intrinsic design issues, unacceptably slow speeds in portions of its routes, extremely high operating costs and the lack of ridership and revenue to support those costs, a case can be made for dismantling or phasing out the light rail system altogether. At a meeting of the CPC on March 28, 2019, a member of the VTA staff responded to a question from a Board member by confirming that operating costs could be cut in half and farebox recovery doubled if a bus-only system were deployed. In fact, light rail operating expenses are closer to three times the cost of bus operations, but the point remains that a large reduction in the taxpayer subsidy of VTA operations could be achieved by focusing future investment in transit solutions other than light rail, as Phoenix has decided to do. One director noted at the March 28, 2019 CPC Peer Agency Name Service Area Population Route Miles Fare Revenue Earned ($Ms) Total Operating Costs ($Ms) Farebox Recovery Ratio Operating Cost per Hour Boardings per Hour Passenger Trips (Ms) Cost per Passenger Revenue per Passenger Subsidy per Passenger Santa Clara VTA 1,664,496 42.2 $8.06 $106.0 7.6% $487.58 42 9.1 $11.61 $0.88 $10.73 Sacramento Regional Transit District 1,723,634 42.9 $14.80 $67.8 21.8% $272.55 46 11.4 $5.93 $1.29 $3.64 Dallas Area Rapid Transit 5,121,892 93 $27.71 $175.2 15.8% $356.20 61 29.9 $5.84 $0.92 $4.92 Denver Regional Transportation District 2,374,203 58.5 $38.16 $115.2 33.1% $145.09 31 24.6 $4.67 $1.55 $3.12 San Francisco Municipal Railway 3,281,212 36.8 $39.22 $213.8 18.4% $368.95 88 50.9 $4.19 $0.77 $3.42 Houston Metropolitan Transit Authority 4,944,332 22.7 $5.97 $65.2 9.2% $227.04 63 18.3 $3.56 $0.33 $3.23 Portland Tri- County Metropolitan Transportation District 1,849,898 60 $49.38 $138.8 35.6% $222.51 63 39.7 $3.49 $1.24 $2.25 Salt Lake City Utah Transit Authority 1,021,243 44.8 $17.97 $64.7 27.8% $180.35 52 18.8 $3.44 $0.95 $2.49 Minneapolis Metro Transit 2,650,890 23 $24.14 $70.9 34.0% $166.23 55 23.8 $2.98 $1.01 $1.97 San Diego Metropolitan Transit System 2,956,746 53.5 $38.97 $82.5 47.3% $168.24 76 37.6 $2.19 $1.04 $1.15 122 Page 30 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY meeting, “We have to really broaden our thought process with regard to light rail. The worst position that VTA can get into is being the last transit agency to be deploying an old technology.” The Eastridge LRT Extension Although operating statistics demonstrate the high cost and inefficiency of light rail as a mode of transportation, the VTA Board has continued to consider construction of two additional light rail extensions that would require additional capital outlays in the hundreds of millions of dollars. These two extension projects, to Vasona Junction and the Eastridge Transit Center, have been in the planning stage for years, have been the subject of countless VTA staff studies and reports and have been considered by the Board and its committees, particularly the CPC, at numerous meetings. Finally, at its meeting on March 28, 2019, the CPC approved placing the Vasona project on an indefinite hold, based on its capital costs, high operating costs and projected ridership that failed to meet VTA’s minimum criteria for a new project. However, the Eastridge project remains alive. The proposed Eastridge light rail extension is part of a two-phase project. Phase 1 of the project, which included conceptual design, pedestrian and bus improvements, and improvements of the Eastridge Transit Center, has been completed. Phase 2, which is now referred to as the Eastridge- BART Regional Connection, or EBRC, would add a 2.4-mile rail line and related infrastructure connecting the Alum Rock Station and the Eastridge Transit Center. In the original design, most of the rail extension was to have been constructed at street level on Capitol Expressway. The design was subsequently changed to an elevated track above the roadway for the entire 2.4 miles at an estimated additional cost of $75 million, which would enable the trains to run at higher speeds. The total cost of the project, which was originally estimated at $377 million, is now projected to be $599 million, of which $146 million has been spent on Phase 1, and $453 million would be spent on Phase 2 ($13 million has been spent to date on design and other preparatory work). If Phase 2 is continued, work is currently estimated to be completed in 2025. 123 Page 31 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table 3 below outlines the cost and status of the Eastridge project*: Table 3 - Eastridge (EBRC) Phases, Costs and Status Project Cost Sub-total Cost Status Notes Concept $11M Completed Original Construction $56M Completed Phase 1 – pedestrian improvements $19M Completed Phase 1 – bus improvements $60M Completed Eastridge Transit Center Phase 1 sub-total - $146M Phase 2 – EBRC various studies/design $13M Initial design work completed Phase 2 – EBRC completion (2023-25) $440M Under review Does not meet minimum operations criteria until well after 2025 Phase 2 sub-total - $453M Plus $2-3M per year in new operational costs Project total - $599M Costs almost $250 million/mile *Data from VTA CPC Agenda Packet item #7, pages 36 and 37, dated March 28, 2019 and updates presented in the Board of Directors meeting on April 4, 2019. The VTA Board has considered various aspects of the Eastridge project more than 20 times since 2000. Each time, the Board has made a decision that allowed work on the project to continue, often kicking the ultimate decision on the fate of the project down the road by noting that its current decision was not the final word on the project and that there would be opportunity for further consideration of the project and final approval at a future date. For example, at its meeting on May 3, 2018, the Board considered the viability of the light rail extension to Eastridge. After a lengthy discussion, the Board approved a funding strategy for proceeding with the project, but the Chairperson noted that there would be still more decision points at which the project could again be considered by both the CPC and the full Board. At the same time, the Board approved a resolution authorizing a staff study of alternatives to light rail for the Eastridge extension. VTA staff has confirmed that, a year later, this study still has not been completed. At the March 28, 2019 meeting of the CPC (at which the Committee agreed that the Vasona Junction extension should be put on hold), Phase 2 of the Eastridge project was again considered. At the meeting, the Mayor of San José, serving as Chairperson of the Committee, asked the following question, “Is the current light rail system one we want to continue to invest in? Our ridership is challenged. Our cost-effectiveness system-wide is 10% on farebox return [it is actually less than 10%]. That 10% is already among the very lowest in the nation in terms of farebox 124 Page 32 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY return, and light rail actually hurts us. The question is: what does the process look like for us to be re-evaluating the entire system to see if we want to start thinking differently about the entire light rail system? I hate to think we are doubling down on a failed system.” Another committee member echoed that sentiment, noting, “We have to choose our transportation modes in a cost- effective and efficient manner. I support to do additional evaluation of what is needed for that corridor. The train has not left the station on Eastridge.” Yet, after a lengthy discussion about an overall re-evaluation of light rail before proceeding with the Eastridge extension, no concrete action was taken in that direction, and both of these directors joined with a third to support a motion to move forward with the project and kick the ultimate decision down the road yet again. The vote was three to two in favor of the motion, but it failed for lack of the required four aye votes needed to pass. The fate of the Eastridge extension project is now once again in the hands of the VTA Board, and its final resolution will be a test of the Board’s leadership. The issue will be considered by the Board again at its meeting on June 6, 2019. Although the subject of the extension was not on the agenda at the Board’s May meeting, the Mayor of San José signaled his intentions. Despite the comments he made at the March CPC meeting, the Mayor stated, “I will vote to proceed immediately with the construction of the Eastridge transit project when it comes before the VTA Board in June. I expect we will move forward without delay.” The investigation of the Grand Jury report was completed on May 29, 2019, and this report does not reflect any actions taken at the June 6, 2019 meeting. As pointed out above, the remaining capital cost to complete the 2.4-mile extension is currently estimated at $453 million, or almost $189 million per mile. According to most recent staff projections included in the May 2019 EBRC Supplemental Environmental Impact Report (SEIR), the new light rail extension would attract approximately 611 11 new riders (net of a reduction in bus ridership on the existing bus lines that run parallel to the proposed rail extension) by 2025. Therefore, the additional capital cost would be equal to approximately $720,000 for each new rider in the first year of service. Once completed, the Eastridge extension would become part of an outmoded light rail system that is one of the most expensive and heavily subsidized LRT systems in the country, with declining ridership and operating costs more than double the cost of bus operations. The extension, upon completion, is projected to have a miniscule impact on transit usage in the East San José/Milpitas corridor over the next 24 years (i.e., an increase of only 0.07% by 2043 and just over half that when service begins).12 Moreover, the current design permanently removes two existing high occupancy vehicle (HOV) lanes from the Capitol Expressway, without any foreseeable commensurate reduction in automobile traffic, a fact that may not be widely 11 EBRC SEIR, May 2019, page 71, Table 5.1-11. http://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/EBRC_Vol1_FSEIR-2%20(1).pdf 12 EBRC SEIR, May 2019, page 72 125 Page 33 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY understood in the East San José community. As noted in the SEIR, “[t]he proposed removal of the HOV lanes would result in higher average automobile delays and higher automobile travel times on Capitol Expressway.”13 Further, despite claims that the Eastridge Transit Center is among the busiest in the VTA system, there is an average of only seven riders per bus trip into and out of that center. Based on our interviews, the Grand Jury has found virtually no support for the project among the VTA staff, although they continue to move the project forward in compliance with incremental policy decisions made by the VTA Board. The argument supporting the Eastridge extension is essentially political. The extension was one of 13 transportation improvement projects envisioned by Measure A and passed by the voters in 2000. For various reasons, most related to budget challenges brought about by the dot com “bubble” in the early 2000s and the later economic recession, the implementation of the Eastridge project has been delayed, along with some of the other Measure A projects. In the interim, the once-promising LRT system has become technically outmoded and increasingly expensive. Yet, proponents of the extension, including powerful political forces, contend that the periodic, incremental approvals of the project by the VTA Board that have kept the project alive over the years have reinforced a “promise” to complete it, even though the VTA Board has both the right and the duty to re-evaluate capital projects when they are no longer viable. Proponents also contend that completion of the project is a matter of “economic equity,” balancing the needs of a relatively low-income, transit-dependent area of Santa Clara County with the type of transit services provided elsewhere in the County (although, as noted above, the Vasona Junction project that was to have served the Los Gatos area was recently put on hold). The challenge to the VTA Board, in the exercise of its fiduciary duties to the taxpayers and transit users of the County, is to address such questions as:  Can any further investment in VTA’s present LRT system be justified, much less one that will cost $720,000 for each prospective new rider?  Does the proposed Eastridge extension meet VTA’s standards for new transit projects, including minimum projected ridership criteria?  Before proceeding with the project, should the Board undertake a thorough review of the light rail system and its future as a mode of transportation in Silicon Valley, as suggested by members of the CPC? 13 Ibid, page 72 126 Page 34 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY  Can the recognized needs of the residents of East San José for modern, efficient public transportation be better served by an alternative to the proposed Eastridge light rail extension? VTA should aspire to take an industry-leading role in the future of public transportation, commensurate with the role of Silicon Valley as a worldwide leader in technology and innovation. Whether the VTA Board is able to put aside local political considerations and answer these questions based on the interests of all the taxpayers and residents of Silicon Valley will say much about its effectiveness as a policy-making body and whether VTA will be able to achieve such leadership aspirations. 127 Page 35 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Designing a More Effective Structure for the VTA There are countless variations in models for governing a regional transit agency, and there is no perfect structure that fits all situations. Even when transit agencies set out to reorganize their own governance structure in response to acknowledged defects, they realize they must choose among alternative structures having both advantages and disadvantages. Virtually all the individuals interviewed by the Grand Jury, including directors and senior staff, agreed that VTA could benefit from a more knowledgeable and engaged Board of Directors that is more sharply focused on VTA’s role as a regional transit agency and less on local political interests. However, there is less consensus on how best to achieve that goal. Nevertheless, it is useful to examine some of the variable features of alternative governance structures, how they have been implemented by other transit agencies and how changes to the structure of VTA’s governance might result in a more effective Board. Number of Directors The VTA Board has 12 voting members. As pointed out in the 2003-2004 Grand Jury’s report, the VTA Board is larger than the boards of many regional transit agencies. Alameda County Transit (AC Transit) and BART, for example, have boards of seven and nine members, respectively, while two other transit agencies in California have five-person boards. However, transit agency boards across the country range widely in size, from as few as five to more than 20. The agency serving Dallas/Fort Worth, for example, has a 15-person board, while the Phoenix and Salt Lake City transit agencies each has a 16-member board. The 2003-2004 Grand Jury Report concluded that a smaller Board, of five to seven members, “would be more involved in and accountable for the financial and operational management of VTA.” Some current members of the VTA Board agree that a smaller Board would be preferable, although others disagree. While the current Grand Jury agrees that reducing the size of the Board might result in more focused decision-making, a reduction in Board size, in and of itself, would not address fundamental issues of lack of experience, inadequate continuity, competing time commitments and conflicts of interest between VTA and local priorities. Accordingly, a reduction in the size of the VTA Board should only be considered in conjunction with other structural changes that directly address these key issues. Term of Service VTA directors serve for terms of two years. Although some directors serve more than one term (often consecutive), directors whose positions rotate among groups of smaller cities generally do not serve consecutive terms. Furthermore, a director’s term can be cut short if the director ceases to serve in his or her elected position. 128 Page 36 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The term of service for directors of regional transit agencies in California and other larger metropolitan areas generally ranges between two and four years, with three and four-year terms being common. In California, for example, directors of BART, AC Transit and transit agencies serving Santa Barbara, Stockton and Bakersfield serve four-year terms. Directors of agencies serving Austin and Vancouver, B.C. serve for three years. In an independent review of the agency serving Vancouver, a Governance Review Panel concluded that “longer-term decision-making requires a minimum of three-year terms,” although the panel also recommended that members not be allowed to serve more than six consecutive years in order to vary the “mix of management, finance, legal and other skills to match [the agency’s] changing needs over time.”14 Among the individuals interviewed, there was substantial support for longer terms to provide additional time for directors to become knowledgeable about VTA’s operations and transit issues, to participate in more than one budget cycle and to participate more effectively in the Board’s long-term planning function. In addition, lengthening the term of service would mitigate the advantage currently enjoyed by representatives of San José and Santa Clara County, who typically serve substantially longer terms than the representatives of the smaller city groups and dominate the Board, in part, as a result of their greater experience. Not all interviewees agreed, however. One made the point that, if a director is unqualified in the first place, a four-year term would just mean that the Board would be burdened with an unqualified member for twice as long. Additionally, since under the current structure a director’s term ends when he or she leaves elected office, a four-year term is more likely than a two-year term to be cut short, lessening to some degree the impact of a change to a longer term. Nevertheless, extending the term of VTA directors to four years would increase the average term of Board service and, accordingly, would provide some valuable experience and continuity to the Board and enhance the influence of the smaller cities. Likewise, establishing term limits or limits on total years of service would mitigate the dominance of San José and the County and allow the Board to evolve over time to meet its changing needs. As described above, the PUC specifies the annual election of the Board’s Chairperson and Vice Chairperson. The VTA Administrative Code provides that the election of the two officers shall be conducted at the last meeting of the calendar year, when practical, and that they shall serve for the ensuing calendar year.15 The Administrative Code also specifies that the two positions shall be rotated annually, according to a fixed schedule, among representatives of San José, Santa Clara County and the smaller city groups16. There was considerable support among the persons interviewed for extending the Chairperson’s term from one to two years. As pointed out above, because VTA operates on a June 30 fiscal year, 14 “TransLink Governance Review", TransLinK Governance Review Panel, January 26, 2007, page 22 15 VTA Administrative Code Section 2-26 16 Ibid 129 Page 37 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY the Chairperson’s calendar year term of service straddles two fiscal years, disconnecting the Chairperson from the budget process and accountability for operating and financial results. He or she inherits one annual budget in mid-stream and serves only halfway through another. Lengthening the Chairperson’s term would help address this problem by allowing the Chairperson to oversee VTA’s financial performance for at least one full fiscal year. Coordinating the term of the Chairperson with the agency’s June 30 fiscal year would further connect the Chairperson with VTA’s budget process and the oversight of its financial performance. Similarly, reviewing the VTA General Manager’s performance on a fiscal year rather than a calendar year basis would also improve direct accountability for the organization’s performance to budget. Direct Election of Directors Under the current governance structure, members of the VTA Board are appointed to serve by the jurisdictions they represent, either through direct appointment by a mayor or city council or, in the case of the groups of smaller cities, by arrangement among the cities. As pointed out above, as originally proposed by the County Board of Supervisors, the VTA Board would have been composed of a combination of five directly elected members and 11 appointed members. Although the direct election of directors of transit agencies is not common in California, there are exceptions, including BART and AC Transit, both of which have directly elected directors serving four-year terms. Other regional public bodies use a direct election model for some or all their directors. The Santa Clara Valley Water District (SCVWD), for example, has a board of seven directors, directly elected by supervisorial district. Benefits of an elected board include direct accountability to the public and the directors’ increased focus on the affairs of the agency as their primary, rather than secondary, public service responsibility. Direct election would also eliminate the possibility of directors’ terms being shortened when they cease to serve in their elected position. In theory at least, candidates who serve on an elected board also would be more likely to have an interest in and commitment to public transportation issues than would appointed directors. On the other hand, directly elected VTA Board members, like other elected officials, may tend to have a parochial view if they are elected to represent specific districts or municipalities, so the goal of encouraging a regional view of strategic planning responsibilities might not be fully realized. Some interviewees supported changing to a direct election model for the VTA Board, based on the potential benefits noted above. Others, however, did not favor such a change. Several pointed out what they perceived to be a lack of effectiveness of the BART Board of Directors as evidence that the change would not be worthwhile. Others noted that moving to a direct election model would be complicated, politically difficult and costly – again, not justifying the change. One interviewee observed that, at the end of the day, voters pay very little attention to the direct election of directors 130 Page 38 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY of governmental agencies, noting that many voters do not even know that an agency like SCVWD, for example, even exists, much less who its directors are. Appointed Directors Who Are Not Elected Officials Like VTA, many regional transit districts have boards consisting exclusively of elected officials representing the constituent communities making up the district. In at least three California transit agencies (those serving Santa Barbara, San Francisco and Stockton), the appointed boards of directors include interested citizens who are not currently serving as elected officials, and the enabling legislation of another transit district, serving the Bakersfield area, specifically provides that elected officials are not eligible for appointment as members of the Board. Transit agencies whose directors are not current elected officials are not uncommon in other parts of the country. Examples of transit agencies with appointed boards that do not include elected public officials are those serving Houston, Austin, Vancouver, B.C. and Toronto. The flexibility to appoint non-politicians to serve on the board of a transit agency allows the appointing authority to select directors having a wide range of business, financial and transportation-related experience with a mandate to serve non-politically and make evidence- driven policy decisions based on demonstrated need and financial feasibility. The Houston Metropolitan Transit Authority (HMTA), for example, has a board of nine members, five of whom are appointed by the Mayor of Houston, two by the Harris County Commissioners Court and two by the mayors of other cities in its service area. The Board of the HMTA currently includes a retired lawyer, a certified public accountant, a banker, executives of large companies and experts on infrastructure, construction and budget management. Partially offsetting the benefits of removing elected public officials from a transit agency’s governance structure are concerns of accountability. The level of commitment of non-elected directors to their local communities’ views on transit policy and priorities, including land use and development, is uncertain. However, some senior VTA staff and directors feel that the staff gets little support from VTA Board members in connection with VTA’s dealings with city governments on these issues. Some transit districts have chosen to balance the benefits of a predominantly non-political governing board with some participation by elected officials. For example, the board structure of the transit agency serving the Austin area was revised in 2011 from 100% elected officials to a mix of two elected officials and five non-politicians, with the City of Austin, the largest participant and underwriter of the system, having a predominant say in the appointments. The enabling legislation went a step further and specified that one appointed member of the board must have at least 10 years of experience as a financial or accounting professional and another must have at 131 Page 39 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY least 10 years of experience in an executive-level position in a public or private organization.17 As one commentator noted at the time the legislation was proposed, “What the board would lose in elected officials, it would presumably gain in knowledge.”18 In 2011, the Legislative Auditor of the State of Minnesota issued an evaluation report that analyzed various governance structures for the agency principally responsible for the Twin Cities’ transit system, as potential alternatives to the existing structure under which all members of the governing council are appointed by the governor. After analyzing and comparing various structures, including the existing appointment system and the direct election of council members, the Auditor concluded that the optimal model would be a combination of appointed and elected officials that “would provide the Council with an effective mix of regional and local perspectives.”19 Silicon Valley offers an unparalleled pool of talented individuals, including entrepreneurs who have introduced cutting-edge technologies, products and services, as well as countless experts with leadership experience in finance and executive management of large organizations. Current and retired leaders of Silicon Valley companies and organizations have made numerous contributions in support of a wide range of community activities, including the arts, healthcare, education and other civic and charitable endeavors. Surely, appointing authorities could identify qualified public sector leaders who would be willing to serve on the VTA Board, and VTA would benefit from their knowledge and experience. 17 Texas Transportation Code Section 451.5021(b) 18 "What's Wrong With Cap Metro...and What's Right", Lee Nichols, Austin Chronicle, April 24, 2009 19 "Governance of Transit in the Twin Cities Region", Office of the Legislative Auditor, January 2011, page 44 132 Page 40 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY CONCLUSIONS VTA is a complex, multi-billion-dollar enterprise. In addition to operating a large transit system, VTA has responsibility for county-wide transportation planning, including congestion management, the design and development of highway, pedestrian and bicycle improvement projects and the promotion of transit-oriented development. VTA is governed by a part-time Board of Directors composed solely of elected public officials, each of whom is burdened by the obligations of his or her office and subject to local political interests. A few of the directors have served for many years, but others have served for less than two. Appointees to the VTA Board often have little or no previous experience with transportation, finance or leadership of a large organization, let alone one the size of VTA. Today, VTA faces a series of challenges which, taken together, can be fairly characterized as a crisis. The following challenges, among others, must be addressed by the VTA Board:  Year after year, VTA operates one of the most expensive and least efficient transit systems in the country. Empty or near-empty buses and light rail trains clog the County’s streets but are used regularly by fewer than 5% of the County’s commuters. Operating costs increase continuously, and taxpayers subsidize 90% of these costs, to the tune of about $5.50 per rider for each bus trip and $10.75 per rider for each light rail trip.  VTA veers from one financial crisis to another. In June 2017, the VTA Board adopted the 2018-2019 biennial budget and consciously approved a built-in structural financial deficit of $50 to $60 million per year. In January 2018, an ad hoc committee of the VTA Board was formed to deal with the crisis caused by the budget deficit. In August 2018, VTA’s Chief Financial Officer advised the committee that the agency was 18 to 24 months away from going “off a cliff.” At the end of 2018, the ad hoc committee made weak and only partially effective recommendations to address VTA’s structural financial deficit and didn’t seriously consider such important but politically sensitive topics as reductions in employee headcount or the scrapping or deferral of large capital projects.  Light rail ridership is declining steadily throughout the country. Experts have pronounced the early twentieth century concept of light rail transit obsolete, and other regional transit agencies are contemplating abandoning light rail system extensions. VTA, however, continues to move forward with an extension of its light rail system — one that currently has among the highest operating costs and lowest ridership in the country. The remaining capital cost of the proposed 2.4-mile Eastridge extension project is currently estimated at $440 million, representing approximately $720,000 for each new rider that the staff estimates will actually use the extension during the first year of its operation. The project 133 Page 41 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY makes no financial sense and survives only because powerful political forces continue to support it. VTA needs to carefully consider whether the recognized needs of the residents of East San José for modern, efficient public transportation can be met without “doubling down on a failed system,” as one director put it, and worsening VTA’s precarious financial condition.  Although a detailed review of the long-pending BART to Silicon Valley project was beyond the scope of the Grand Jury’s inquiry, a number of our interviewees, including senior VTA staff and members of the VTA Board, noted its importance to the future of VTA. VTA’s proposed fiscal years 2020-2021 capital budget calls for a staggering $713.5 million in Measure A and Measure B tax funds for the BART Phase 2 project. The operating agreement between VTA and BART remains in negotiation, and several of our interviewees expressed concern that important issues regarding the sharing of system-wide capital and operating costs remain unresolved and that such costs could fall disproportionately on VTA. One director expressed the opinion that BART-related cost control issues are more significant for VTA than those related to the Eastridge light rail extension. A senior staff member stated unequivocally that “BART is going to bankrupt VTA.” An interested stakeholder similarly predicted that BART “will be the demise of VTA.” Whether or not these assessments are accurate, it is clear that the financial health of VTA is dependent on the success of BART in the South Bay Area. That success is dependent, in turn, on VTA effectively implementing BART Phase 2 and meeting its ridership and revenue goals. VTA’s operating territory is the Silicon Valley – the world’s leading center of innovation and cutting-edge technology. Several of VTA’s key staff members have noted that they had joined VTA in the hope that VTA would take an industry-leading role in the future of transportation, commensurate with the role that companies and other institutions in the Silicon Valley have taken in the introduction of all manner of new products, technologies and services. Yet, little such innovation has been evident at VTA in recent years. In fact, as noted above, VTA seems to be “doubling down” on old technology. At the Board’s recent workshop on “The Future of Transportation in Silicon Valley,” the directors present (two-thirds of the voting members and half of the alternates) seemed to recognize this problem and unanimously agreed that VTA needs to make “radical changes” in the way it provides its services. If VTA is going to meet the many challenges it faces, the VTA Board will have to make good on its commitment to radical change. So, the question becomes, is the Board capable of making the policy decisions and providing the strategic oversight necessary to accomplish such change? The Grand Jury has concluded that, as presently structured and operated, that level of capability does not appear to be present. Accordingly, the Grand Jury recommends a number of changes in the structure of the VTA Board and in the way directors are selected, trained and evaluated that it 134 Page 42 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY believes will assist VTA in addressing its many challenges and achieving its aspiration of becoming a leader in the transportation industry. 135 Page 43 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY FINDINGS AND RECOMMENDATIONS Finding 1 The VTA Board, currently made up exclusively of elected officials from the Santa Clara County, Board of Supervisors, the City of San José and the other smaller cities in the County, suffers from:  A lack of experience, continuity and leadership;  Inadequate time for the directors to devote to their duties to the VTA Board due to their primary focus on the demands of their elected positions;  A lack of engagement on the part of some directors, fostered in part by the committee system, resulting in VTA functioning largely as a staff-driven organization;  Domination, in terms of numbers, seniority and influence, by representatives of the Santa Clara County Board of Supervisors and the City of San José; and  Frequent tension between the director’s fiduciary duties to VTA and its regional role, on the one hand, and the political demands of their local elected positions, on the other. Recommendation 1a VTA should commission a study of the governance structures of successful large city transportation agencies, focusing on such elements as: board size; term of service; method of selection (directly elected, appointed or a combination); director qualifications; inclusion of directors who are not elected officials; and methods of ensuring proportional demographic representation. This study should be commissioned prior to December 31, 2019. Recommendation 1b As the appointing entity with an interest in the transit needs of all County residents, the County of Santa Clara should commission its own study of transportation agency governance structures, focusing on the elements listed in Recommendation 1a. This study should be commissioned prior to December 31, 2019. Recommendation 1c As constituent agencies of VTA, each of the cities in the County should prepare and deliver to VTA and the County Board of Supervisors a written report setting forth its views regarding VTA governance, with specific reference to the elements listed in Recommendation 1a. These reports should be completed and delivered prior to December 31, 2019. 136 Page 44 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Recommendation 1d Within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation, including appropriate amendments to Sections 100060 through 100063 of the California Public Utilities Code, to improve the governance structure of VTA (which potentially could include an increase in the directors’ term of service, the addition of term limitations and the inclusion of appointed directors who are not currently serving elected officials). Recommendation 1e In order to provide more continuity in the leadership of the VTA Board, within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation amending Section 100061 of the California Public Utilities code to provide that the Chairperson of the VTA Board shall be elected for a term of two years rather than one. Recommendation 1f Prior to December 31, 2019 and pending changes contemplated by Recommendation 1e, VTA should adopt a policy of routinely reappointing an incumbent Chairperson for a second one-year term at the end of his or her initial term, absent unusual circumstances. Recommendation 1g In order to better connect the Chairperson with the budget process and accountability for operating and financial results, prior to December 31, 2019, VTA should amend Section 2-26 of the VTA Administrative Code to provide that the Chairperson and Vice Chairperson shall serve terms coinciding with VTA’s fiscal year ending June 30, rather than the calendar year. Finding 2 The California Public Utilities Code, the VTA Administrative Code and the Guidelines for Member Agency Appointments to the VTA Board of Directors adopted by the Governance and Audit Committee of the Board (Guidelines) all contain provisions requiring that, to the extent possible, the appointing agencies shall appoint individuals to the VTA Board who have expertise, experience or knowledge relative to transportation issues. Nevertheless, appointees to the VTA Board often lack a basic understanding of VTA’s operations and transportation issues, generally. 137 Page 45 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Recommendation 2 In order to help assure that individuals appointed to serve on the VTA Board have the appropriate qualifications, prior to December 31, 2019, VTA should take vigorous action to enforce compliance by appointing agencies with the qualification and suitability requirements of: (i) Section 100060(c) of the California Public Utilities Code; (ii) Section 2-14 of the VTA Administrative Code; and (iii) the Guidelines. Finding 3 The VTA Board lacks effective policies designed to assure productive participation by members of the VTA Board. Recommendation 3a In order to help make directors become and remain productive members of the VTA Board, prior to December 31,2019, VTA should: (i) implement and enforce attendance at an intensive, multi- session onboarding bootcamp for incoming directors that would provide detailed information regarding VTA’s operations, financial affairs and currently pending large-scale projects as well as the organization and operations of the Board and directors’ duties and obligations; (ii) prepare and provide to each director a detailed handbook of directors’ duties, similar to the “Transit Board Member Handbook” published by the American Public Transportation Association; (iii) enforce attendance at Board and committee meetings by providing Board attendance records to appointing agencies and removing directors from committees for repeated non-attendance; and (iv) implement a robust director evaluation process, with the participation of an experienced board consultant, that would include mandatory completion by each director of an annual self- evaluation questionnaire and Board review of a composite report summarizing the questionnaire responses. Recommendation 3b In order to further enhance the effectiveness of the directors, prior to December 31,2019, VTA should develop a program to encourage continuing education of the Board members by: (i) scheduling and enforcing attendance at more frequent and intensive Board workshops on important issues regarding transit policy, developments in transportation technology, major capital projects and VTA’s financial management; and (ii) requiring directors to attend, at VTA’s expense, third- party sponsored industry conferences and educational seminars. 138 Page 46 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Finding 4 The Grand Jury commends the Chairperson of the VTA Board for recognizing the need to improve Board engagement and effectiveness by convening the Ad Hoc Board Enhancement Committee to review the Board’s governance structure and practices. Recommendation 4 None. Finding 5 VTA continues to consider an extension of VTA’s light rail system to the Eastridge Transit Center, at an additional capital cost of over $450 million, although VTA’s light rail system is one of the most expensive, heavily subsidized and least used light rail systems in the country, many transit experts consider light rail obsolete, and VTA is suffering from chronic structural deficits that would be exacerbated by the continuation of the project as currently defined. Recommendation 5a VTA should consider following recommendations made by several directors that it undertake a thorough review of VTA’s light rail system and its future role as a mode of transportation in Silicon Valley before proceeding with the Eastridge extension project. This review, as it pertains specifically to the analysis of the viability of the Eastridge extension, should be undertaken with the participation of an independent consultant and should consider such issues as projected ridership estimates, project cost estimates including future operating and capital costs, and the projected impact on traffic congestion on Capitol Expressway with the removal of two HOV lanes. Recommendation 5b VTA should consider whether the recognized needs of the residents of East San José for modern, efficient public transportation can be better served by an alternative to the proposed light rail extension. 139 Page 47 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY REQUIRED RESPONSES Pursuant to Penal Code sections 933 and 933.05, the Grand Gury requests responses as follows: From the following governing bodies: Responding Agency Finding Recommendation Santa Clara Valley Transportation Authority 1, 2, 3, 4 and 5 1a, 1f, 1g, 2, 3a, 3b, 5a and 5b County of Santa Clara 1 1b, 1d and 1e City of Campbell 1 1c, 1d and 1e City of Cupertino 1 1c, 1d and 1e City of Gilroy 1 1c, 1d and 1e City of Los Altos 1 1c, 1d and 1e City of Milpitas 1 1c, 1d and 1e City of Monte Sereno 1 1c, 1d and 1e City of Morgan Hill 1 1c, 1d and 1e City of Mountain View 1 1c, 1d and 1e City of Palo Alto 1 1c, 1d and 1e City of Santa Clara 1 1c, 1d and 1e City of San José 1 1c, 1d and 1e City of Saratoga 1 1c, 1d and 1e City of Sunnyvale 1 1c, 1d and 1e Town of Los Altos Hills 1 1c, 1d and 1e Town of Los Gatos 1 1c, 1d and 1e 140 Page 48 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY APPENDIX A – The Guidelines for Member Agency Appointments to the VTA Board of Directors 141 Page 49 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY 142 Page 50 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY APPENDIX B – VTA Operating Statistics and 2017 National Trends This appendix presents operational metrics comparing VTA against national trends using an FTA annual summary. Table B1 VTA Operating Statistics 2009 - 2018 Year County Popula- tion1 (millions) Bus Ridership1 Light Rail Ridership1 VTA Operations Full-Time Employees1 Fleet Size1& 2 VTA Operations Expense ($)1 Vehicle Revenue Hours3&4 Total Unlinked Passenger Trips3&4 2009 1.77 34,510,273 10,754,161 1649 547 254,285,943 1,487,469 45,264,434 2010 1.79 31,983,494 9,749,882 1588 523 257,953,581 1,406,463 41,733,376 2011 1.814 31,395,126 10,014,504 1576 593 263,322,297 1,357,169 41,409,630 2012 1.841 32,053,755 10,373,042 1599 544 278,532,013 1,383,007 42,426,797 2013 1.87 32,432,354 10,742,292 1614 542 293,447,169 1,411,180 43,174,646 2014 1.894 32,475,527 10,952,965 1687 542 311,287,342 1,464,798 43,428,492 2015 1.92 32,623,599 11,320,497 1724 639 319,978,046 1,524,011 43,944,096 2016 1.934 32,195,504 10,722,932 1758 599 335,140,300 1,555,226 42,918,436 2017 1.946 29,057,047 9,132,084 1761 559 354,494,193 1,569,744 38,189,131 2018 1.957 28,048,405 8,507,095 1795 571 414,975,000 1,582,146 36,555,500 Notes: 1. From VTA report "Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018" listed in References, item number 15, and State Department of Finance http://www.dof.ca.gov/Forecasting/Demographics/Estimates/E-2/documents/PressReleaseJul2018.pdf 2. Fleet size includes the total number of buses and light rail cars 3. Vehicle Revenue Hours (VHR) and Unlinked Passenger Trips (UPT) data from FTA NTD https://www.transit.dot.gov/ntd/data-product/ts22-service-data-and-operating-expenses-time-series-system-0 4. Operating expense, UPTs and VHRs include only directly operated bus and light rail vehicles 143 Page 51 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY For the charts below, the Grand Jury used data from the 'National Transit Summaries & Trends 2017”20, “Santa Clara Valley Transit Authority Annual Agency Profile 2017”21, and “Service Data and Operating Expenses Time-Series by System”22 to examine VTA’s operations and performance in the national arena. 20 2017 National Transit Summaries and Trends https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/ntd/130636/2017-national-transit-summaries-and-trends.pdf 21 Santa Clara Valley Transit Authority Annual Agency Profile 2017 https://www.transit.dot.gov/ntd/transit-agency-profiles/santa-clara-valley-transportation-authority 22 Service Data and Operating Expenses Time-Series by System https://www.transit.dot.gov/ntd/data-product/ts22-service-data-and-operating-expenses-time-series-system-0 0 1 2 3 4 5 6 7 8 9 10 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Operating Cost ($) Percentile 2017 Operating Cost ($) per Passenger Trip 2017 Operating Cost per Passenger Trip Data National Distribution ($) 2017 Operating Cost per Passenger Trip Data VTA ($) 144 Page 52 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY 0 50 100 150 200 250 300 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Operating Cost ($) Percentile 2017 Operating Cost ($) per Revenue Hour 2017 Operating Cost per Revenue Hour Data National Distribution ($) 2017 Operating Cost per Revenue Hour Data VTA ($) 0 5 10 15 20 25 30 35 40 45 50 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Fare Recovery Ratio %Percentile 2017 Fare Recovery Ratio 2017 Fare Recovery Ratio National Data (%)2017 Fare Recovery Ratio VTA (%) 145 Page 53 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY APPENDIX C – Peer Agency Comparisons This appendix presents various operational metrics for VTA and nine peer agencies. Generally, VTA under-performs all or most of these agencies as noted. Source of data: https://www.transit.dot.gov/sites/fta.dot.gov/files/February%202019%20Adjusted%20Database.xlsx 20 30 40 50 60 70 80 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Trip per HourYear Passenger Trips per Revenue Hour (Bus & Light Rail ) Portland Minneapolis Houston Dallas Utah Denver VTA SF Muni Sacramento San Diego VTA competes for lowest 146 Page 54 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 100 120 140 160 180 200 220 240 260 2009 2010 2011 2012 2013 2014 2015 2016 2017Operating Costs $ per HourYear Operating Expense per Revenue Hour (Bus & Light Rail) Portland ($)Minneapolis ($)Houston ($) Dallas ($)Utah ($)Denver ($) VTA ($)SF Muni ($)Sacramento ($) San Diego ($) VTA now trending highest 147 Page 55 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 2 3 4 5 6 7 8 9 10 2009 2010 2011 2012 2013 2014 2015 2016 2017Operating Costs $ per TripYear Operating Expense per Passenger Trip (Bus & Light Rail) Portland ($)Minneapolis ($)Houston ($) Dallas ($)Utah ($)Denver ($) VTA ($)SF Muni ($)Sacramento ($) San Diego ($) VTA is highest 148 Page 56 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 0 10 20 30 40 50 60 2009 2010 2011 2012 2013 2014 2015 2016 2017Farebox Recovery Ratio %Year Farebox Recovery Ratio (Bus & Light Rail) Portland Minneapolis Houston Dallas Utah Denver VTA SF Muni Sacramento San Diego VTA competes for lowest 149 Page 57 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 0 5 10 15 20 25 30 35 40 45 2009 2010 2011 2012 2013 2014 2015 2016 2017Farebox Recovery %Year Farebox Recovery Ratio (All Operations) Portland Minneapolis Houston Dallas Utah Denver VTA SF Muni Sacramento San Diego VTA is lowest 150 Page 58 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY REFERENCES 1. VTA Ad Hoc Financial Stability Committee Archives for 2018, http://www.vta.org/Get- Involved/Ad-Hoc-Financial-Stability-Committee 2. The Coming Transit Apocalypse, O’Toole, October 24, 2017 https://www.cato.org/publications/policy-analysis/coming-transit-apocalypse 3. Santa Clara Valley Transportation Authority Ad Hoc Financial Recovery Committee February 10, 2010 http://www.vta.org/sfc/servlet.shepherd/version/download/068A0000001Fbgu 4. California Public Utilities Code (PUC), Sections 100060 through 100063. https://codes.findlaw.com/ca/public-utilities-code/puc-sect-2870.html 5. Measure A Transit Improvement Program. See VTA.org Live Website. http://www.vta.org/projects-and-programs/programs/2000-measure-a-transit-improvement- program 6. Santa Clara Valley Transportation Authority Administration Code, w/ Amendments through June 7, 2018. http://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/admin_code.pdf 7. American Public Transportation Association (APTA), Quantifying Reporting Transit Sustainability Metrics. June 2012 8. Business Insider, These North American cities have the best public transit systems. November 4, 2017. https://www.businessinsider.com/best-subway-public-transit-north-america- 2017-10#3-vancouver-13 9. The Best Cities for Public Transportation, SmartAsset Publication. September 20, 2018. https://smartasset.com/mortgage/best-cities-for-public-transportation 10. Assessing Transit Service Improvement, May 3, 2010, San José State University, Urban Planning, Honors Report, Tyree. http://www.sjsu.edu/urbanplanning/docs/URBP298Docs/urbp298_HonorsReport_Tyree.pdf 11. Hay Group, VTA Organizational and Financial Assessment, March 2007. http://www.vta.org/sfc/servlet.shepherd/version/download/068A0000001FbYn 12. Santa Clara Valley Transportation Authority. Transit Choices Report, Jarrett Walker Associates, February 3, 2016. https://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/Transit_Choices_Report_Full.pdf 13. Transit Services Guidelines, VTA January 2019. http://www.vta.org/News-and- Media/Connect-with-VTA/Community-Engagement-to-Begin-on-2019-New-Transit-Service- Plan#.XMXYsbdKjIU 14. Jarrett Walker, Randal O’Toole, CATO Institute, October 2, 2018, The Future of Public Transit. https://www.cato.org/events/the-future-of-public-transit 15. VTA Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018. http://vtaorgcontent.s3-us-west-1.amazonaws.com/Site_Content/CAFR_FY_2018.pdf 151 Page 59 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY 16. Long Range Transportation Plan for Santa Clara County. VTP2040 undated. http://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/VTP2040_final_hi%20res_030315.pdf 17. Why We Need to Stop Subsidizing Public Transit, CATO Institute, Randal O’Toole, May 2018. https://www.cato.org/publications/commentary/why-we-need-stop-subsidizing-public- transit 18. California State Auditor, Santa Clara County Transportation Authority, July 2008, Report 2007-129 SUMMARY. https://www.bsa.ca.gov/reports/summary/2007-129 19. National Transit Database. October 20, 2018. https://www.transit.dot.gov/ntd 20. The Great Transit Rip-Off: Joel Kotkin and Wendell Cox, August 25, 2017. https://www.dailynews.com/2017/08/25/the-great-transit-rip-off-joel-kotkin-and-wendell-cox/ 21. Silicon Valley Can’t Get Transit Right, Eric Jaffee, January 11, 2013. https://www.citylab.com/transportation/2013/01/silicon-valley-cant-get-transit-right/4374/ 22. Paying for Silicon Valley’s Transit Upgrade. The Hudson Institute, Walter Russell Mead, April 24, 2017. https://www.hudson.org/research/13566-paying-for-silicon-valley-s-transit- upgrade 23. Charting Public Transit’s Decline, CATO Institute, Randal O’Toole, November 8, 2018. https://www.cato.org/publications/policy-analysis/charting-public-transits-decline 24. America Needs a Rational Transit Policy, Wendell Cox, Heritage Foundation, March 24, 2015. https://www.heritage.org/transportation/report/america-needs-rational-transit-policy 25. American Public Transportation Association: Transit Board Member Handbook. July 2014 26. It’s Never Too Late to Stop a Transportation Megafolly, Randal O’Toole, CATO, March 5, 2019. https://www.cato.org/publications/commentary/its-never-too-late-stop-transportation- megafolly 27. Getting to the Route of It. The Role of Governance in Regional Transit. The Transit Center. EnoTrans, Washington D.C. October 1, 2014. https://www.enotrans.org/wp- content/uploads/Transit-Governance.pdf 28. New York City MTA Board Leadership. From Live Website. https://new.mta.info/transparency/leadership/board-members 29. Governance of Regional Transit Systems. Washington D.C., New York, Toronto. Wilson Center. Canada Institute, June 2014. https://www.scribd.com/document/233493152/Governance-of-Regional-Transit-Systems- Washington-New-York-and-Toronto 30. Houston Metro Board Leadership. From Live Website https://www.ridemetro.org/pages/boardofdirectors.aspx 31. Austin Texas Metro Board Leadership. From Live Website https://www.capmetro.org/board/ Note: All links verified June 9, 2019 152 153