Written Communications – Public Comment
Curry
From: alan mil < >
Sent: Wednesday, April 24, 2024 7:15 AM
Subject: Fwd: SANDAG NEEDS TO BE RESHAPED IN THE PUBLIC INTEREST & NOT READY FOR FEDERAL
CERTIFICATION
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ENTIRE COUNTY AFFECTED WHEN
COMMERCE FROM BORDER
COSTS MORE TO DELIVER
SANDAG proposing after removal of Toll on "Free"way 125 CONVERT ENTIRE 125 INTO PERMANENT MANAGED LANE
CAR POOL OR FOR MOST DRIVERS THAT CANNOT CAR POOL WILL CONTINUE TO PAY TOLL. THIS THE SAME AS FREEWAY 15 MANAGED LANES THAT FEW DRIVE RESULTING IN REGULAR LANES CLOGGED OF TRAFFIC. THE DIFFERENCE HERE IS THE ENTIRE 125 LANES PROPOSED CONVERTED TO MANAGED PAY A FEE TOLL LANES!
SANDAG AGENDA 11 APRIL 26 2024
https://docs.google.com/gview?url=https%3A%2F%2Fgranicus_production_attachm ents.s3.amazonaws.com%2Fsandag%2F0af1951d5a5a586528f0a355c2f788960.pdf&e mbedded=true
SANDAG IGNORES TRANSNET TAX THAT LISTED FREEWAY EXPANSION 125
THAT PROMISED VOTERS FREEWAYS NOT TOLL ROADS OR MANAGED LANES
Written Communications – Public Comment
Curry
1988 TRANSNET TAX DOES NOT EXPIRE UNTIL 2048 YET SANDAG PROPOSING
YET ANOTHER ADDITIONAL TAX THIS NOVEMBER BALLOT
VOTE NO
SANDAG TAX
NOVEMBER BALLOT
WHO GETS THE "EQUITY FOR ALL" FREE OPTION?
"Convert all existing lanes to managed lanes: Converting the toll road to a fully managed facility is believed to be a lower cost to implement and with less environmental impacts. It also would be consistent with SANDAG Resolution 2023- 22. A fully managed facility could be operated in a variety of ways to address specific goals related to traffic and equity, including ensuring there is always a free option. This would provide an alternative to toll - only operations, allow for debt repayment sooner, and provide funds to reinvest in the corridor for operating and maintaining the roadway into the future. As such, this is the alternative included in the 2035 phase of the initial concept for the 2025 Regional Plan." https://legistarweb-
production.s3.amazonaws.com/uploads/attachment/pdf/2573900/Item_11_- _Process_for_Removing_Tolls_on_SR_125.pdf
--
Alan Curry
Written Communications – Public Comment
Curry
---------- Forwarded message ---------
From: Paul
Date: Tue, Apr 23, 2024 at 5:54 PM
Subject: SANDAG NEEDS TO BE RESHAPED IN THE PUBLIC INTEREST & NOT READY FOR
FEDERAL CERTIFICATION
Dear Senators and Assembly persons,
SANDAG underwent an investigation by its internal independent auditor for mischarging tollpayers on the SR-125 although they had reason to know the system didn't work for 6 years. It is apparently under investigation by the DOJ as well.
Written Communications – Public Comment
Curry
The SANDAG investigation Management response was not made available to the public or even to this board on time. The deadline was Monday 4/8. But even though the response was dated Monday and some of the documents were dated a few days earlier, Management seems to have waited until Wednesday 4/10 after business hours to deliver them. The next meeting, when the Board scheduled a discussion on the response, was Friday, and then it suddenly cancelled (postponed) even that.
An evening and a day is not enough time to seriously read and study this document.
And to be honest, I (not the only one) speak slowly and the one minute almost always allowed - 4 or 5 paragraphs - for speaking (not the 3 minutes mentioned in every agenda) is one reason I am sending written comments.
Shows Management's contempt for the Board and for due process. We need to hold management accountable for this. If it cannot co-operate with its own Board of Directors, we need to get rid of it. In April, The Union Tribune also suggested this. Maybe the FBI will do this for us.
In fact, this is why I am writing to you. My personal feeling is that SANDAG needs to be reconstituted with as little political as opposed to professional (I mean people who advocate for transportation) influence as possible. I think that there should be a Board of Directors composed of Mayors or their Representatives, and that one of them, not an outsider, should be the Board Chairperson. I do not think that SANDAG should have the option of a weighted vote. I think each Boardmember's opinion should count equally.
Written Communications – Public Comment
Curry
Also, I do not like the way that SANDAG puts pressure on its Board to do things (see item 11 on the current agenda (attached) where staff apparently included option 3 in the 2025 regional plan with little to no public discussion.) The last years, my overall impression is that SANDAG has put pressure on the Board more or less like an ad campaign, often at the expense of a full discussion of issues. Its reputation and ability to act freely have been severely diminished.
It is not helpful either that the Board wants to approve more funds for Transnet (which includes the SR-125.) I'm not sure how the Transnet funding eligibility request can be approved when the books were cooked and the responsible party is the one asking for more funds. And I mean someone who classes a few million dollars as immaterial ignoring the fact that the mistakes happened over 6 years and hurt people as well as wasting taxpayer money on a problem which could have been fixed earlier is disgraceful.
The whole thing walks, talks, and smells like a cover-up.
I hope that you will give some thought to resolving this issue. I do not think that SANDAG needs to be re-certified by the Department of Transportation either.
Here is what I think about Management Response to the SR 125 Investigation (Item 9 on the current agenda):
Management's basic position seems to be - see nothing, hear nothing, say nothing, except that there's a plan and reveal as little else as possible.
Management failed to present its response on time, and I hope it has its response to the FBI ready as well.
Written Communications – Public Comment
Curry
I think it is pathetic that the report still suggests that Management actually did anything at the April 12 meeting. Yet the response keeps saying "Management accepts this recommendation and will incorporate it into the Toll Operations Action Plan presented to the Board at its January 12, 2024, meeting. In fact, there was no such presentation at the meeting.
Then the action plan (attached) has alot of inconsistencies and omissions. For one thing, it is still dated 4/5, which leaves me wondering if they have done anything since then or altered the plans.
It says "Launch Contract Management Support Unit to oversee effective administration of awarded contracts, proactively communicate, and help address any contract performance issues." is in progress. Well with all of the contracting and related scandals of the past years, this should have been done already. Waiting for more contract fraud to happen?
It says "Update procurement policies." is complete. But there is no detail to show with this. Perhaps there is need for further change?
It says "Complete assessment of Toll Operations and develop Toll Operations Improvements Plan to address staffing, policies, procedures, structure, and ongoing management of the system. Phase I" is complete. How much did Phase I improve? It would be nice to have detail on both Phases.
It says "Complete reconciliation of customer records that did not balance in the general ledger: is in progress. But then "Complete reconciliation of customer records that did not balance in the general ledger"' is Written Communications – Public Comment
Curry
completed. How can the reconciliation be completed before all the records are identified?
It says "Evaluate if DMV Hold Functionality can be implemented as part of New Back-Office System Launch and identify interim collection options." apparently, this function was part of the original toll system, so why is it only in progress?
Last for the plan, it has an item "Requirements gathering/Outcome Matrix Approval." No detail, so we do not know what requirements or matrix. Are we running a secret society here?
And in attachment 5, the Board Questions, where contracts are issued based on weighted scores before an actual interview suggest to me that data is more important than people.
I think that the question "Why go live with the ETAN Fastlane system if it was not ready to be deployed?" was more rhetorical. There is no excuse for deploying an unready system when you're dealing with real world people.
Then, management has the nerve to say "We are aware of isolated incidents of customers being mischarged, which we addressed as soon as we were made aware [the 100 transactions cited in the Investigation Report and December 8, 2023] However, based on the information we have at this time, it appears that the software failures are primarily a general ledger issue and not a customer account issue."
Written Communications – Public Comment
Curry
This whole thing, the lawsuit, the Board discussion, the investigation, was based on way more than 100 bad records and who cares what ledger if the result causes harm to someone? Another reason why Management needs to resign and the Board of Directors needs to be reshaped.
Regards,
Paul Henkin
Toll Operations Action Plan
Timing Responsible
Party Action Status
2023 SANDAG Update procurement policies. (Audit Committee Recommendation #2) Complete Fall 2023 –
Mar 2024 SANDAG Provide information to DavisFarr for Annual Independent Financial Audit (FY 2023). Complete
Dec 2023 SANDAG Assembled new management team to assist in the assessment, transition, and implementation. Complete
Dec 2023 SANDAG Increase customer service staffing levels to respond to customer inquiries. Complete
Jan 2024 Deloitte Complete assessment of ETAN system for data migration Complete Jan 2024
SANDAG
Deloitte/A-to-
Be/Fagan
Pending Board approval, execute sole source contract for the Commercial Back Office Migration and Rapid Deployment Project.
Execute contract with Fagan to provide technical support through completion.
Complete
Jan – Ongoing SANDAG Provide information to Office of the Independent Performance Auditor. Complete Jan – Mar 2024 SANDAG
Complete assessment of Toll Operations and develop Toll Operations Improvements Plan to address staffing, policies, procedures, structure, and ongoing management of the system. Phase I
Complete
Jan-July 2024 SANDAG
Fagan
Complete analysis to verify past account balances. (OIPA Recommendation #10; Audit Committee Recommendation #1) In Progress Attachment 1B
Toll Operations Action Plan
Jan – D ec 2024 Deloitte/A-to-
Be/Fagan
Transition back-office system from ETAN/HNTB to Deloitte/A-to- Be/Fagan. In Progress
Feb 2024 Fagan Complete reconciliation of customer records that did not balance in the general ledger. Complete
April 2024 SANDAG
Explain to Board why an RFP process was not initiated a year sooner, and why the Board was instead presented with a request to authorize a sole source contract award on January 12, 2024. (OIPA
Recommendation #3)
In Progress
April 2024 SANDAG
Initiate daily reconciliation of Kapsch/ETAN data to monitor and verify ongoing accuracy of customer accounts. (OIPA Recommendations #2, 7, and 9; Audit Committee Recommendation #1)
In Progress
April 2024 SANDAG
Launch Contract Management Support Unit to oversee effective administration of awarded contracts, proactively communicate, and help address any contract performance issues. (Audit Committee Recommendation #2)
In Progress
April 2024
SANDAG
Deloitte/A-to-
Be
Evaluate if DMV Hold Functionality can be implemented as part of New Back-Office System Launch and identify interim collection options. (OIPA Recommendation #8)
In Progress
April 2024
SANDAG
Deloitte/A-
to- Be/Fagan
Requirements gathering/Outcome Matrix Approval In Progress May 2024 SANDAG
Update Board Policies to outline reporting requirements for when a multimillion-dollar project is failing to meet its deadlines and deliverables, including whether or not errors or delays are identified, under what conditions a report is required, as well as when a report will no longer be required. (OIPA Recommendation #4; Audit Committee Recommendation #3)
In Progress
Toll Operations Action Plan
May 2024
SANDAG
Deloitte/A-
to- Be/Fagan
Data Migration Plan Scheduled
June 2024 SANDAG
Complete assessment of Toll Operations and develop Toll Operations Improvements Plan to address staffing, policies, procedures, structure, and ongoing management of the
system. Phase II
In Progress
June 2024
SANDAG
Deloitte/A-
to- Be/Fagan
Software integration Testing Scheduled
July 2024 SANDAG
Provide semi-annual report to Board on Sole Source awards, including the project, underlying reason for the Sole Source award (and demonstrating adherence to public procurement laws), funding source/s, value of the award, and name of the Approving Official. (OIPA Recommendation #5)
Scheduled
Sept 2024
SANDAG
Deloitte/A-
to- Be/Fagan
User Acceptance testing begins Scheduled
Dec 2024
SANDAG
Deloitte/A-to-
Be/Fagan
Launch Phase 1 Deloitte/A-to- Be Back-Office System Scheduled
Summer 2025
SANDAG
Deloitte/A-to-
Be/Fagan
Complete implementation of Deloitte/A-to-Be Back-Office System. Scheduled
Bold items indicate new actions added by staff based on project development/implementation.
Red items indicate new actions added based on OIPA and/or Audit Committee recommendations.
Item: 11
Board of Directors April 26, 2024
Process for Removing Tolls on State Route 125
Overview
On July 8, 2022, the Board of Directors adopted Resolution No. 2023-22 (Attachment 1) to prioritize eliminating the debt and toll-only operations on the State Route 125 (SR 125) in a manner consistent with the principles of the Regional Plan and California State Transportation Agency’s Climate Action Plan for Transportation Infrastructure (CAPTI).
SANDAG staff collaborated closely with Caltrans to determine the required processes for removing toll-only operations and transferring the facility maintenance and operations to Caltrans. Staff also conducted an initial analysis to evaluate the impacts of removing the toll, identified various operational scenarios for the SR 125 that align with the Board resolution, and conducted a financial assessment to eliminate debt on the SR 125. This report outlines the details of these various steps.
Key Considerations
Process for Removing Toll Only Operations
SANDAG operates, maintains, and tolls SR 125 subject to the Development Franchise Agreement between Caltrans and
SANDAG which is scheduled to terminate in November 2042.
The Franchise Agreement allows SANDAG the flexibility to terminate at any time and relinquish rights back to Caltrans with certain conditions.
Caltrans’ formal process for evaluating potential changes to the SR 125 begins with the Project Initiation Phase. This includes identifying the project and potential alternatives, scoping the necessary environmental process, and developing a plan of action. Caltrans estimates that the Project Initiation Phase would take 9 to 12 months to complete and cost approximately $400,000.
Upon completion of the Project Initiation Phase, a comprehensive environmental analysis may be required to comply with the California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA). Based on current laws and regulations, any reconfiguration of the toll road would require air quality, greenhouse gas (GHG), energy use, noise, and cumulative impacts assessments.
Additional studies may also be required for any options that construct additional lanes on undeveloped land. The environmental assessment phase will identify potential environmental impacts and required mitigation and potential costs to offset those impacts.
If a comprehensive Environmental Impact Report/Environmental Assessment (EIR/EA) is required, it is expected to take approximately two to three years, with an estimated cost ranging from $1.5 to $2 million.
Upon completion of the EIR/EA, the project would move into the design phase. The cost and timeline for Action: Discussion/Possible Action
Staff will present an overview of the
process and anticipated costs and
schedule for removing toll only operations
from State Route 125. The Board of
Directors is asked to provide feedback to
staff on next steps.
Fiscal Impact:
The estimated cost for the initial planning
work to identify options for removing tolls
on SR 125 and conducting an equity
analysis is $600,000. The cost of
environmental work, debt elimination,
mitigation, design and construction, and
ongoing operations and maintenance of
the SR 125 would be determined
following completion of the planning
work.
Schedule/Scope Impact:
Equity analysis and the initial planning
work is estimated to take 9 to 12 months.
the design phase would be determined upon the completion of the project initiation and environmental phases.
If SANDAG relinquishes the SR 125 to Caltrans, an assessment of pavement condition, drainage systems, traffic management systems, American with Disabilities Act access, and bridges would need to be completed. Elements that are not currently in a state of good repair would need to be improved prior to relinquishing the facility. The cost estimates and schedule to bring the facility into a state of good repair, construct additional project features, and maintain the facility thereafter would be determined upon completion of the Project Initiation Phase. Funds to operate and maintain the facility would also need to be identified.
Preliminary Analysis of Toll Removal
In 2022, when the SANDAG Board took action to prioritize eliminating toll-only operations, SANDAG conducted preliminary modeling analysis of removing the tolls from SR 125. The analysis was done for 2030 and revealed an increase in vehicle miles traveled (VMT), travel time, and delays along SR 125.
Removing the toll on the SR 125 also did not result in a significant improvement to travel times or a reduction in delay on I-805. Although this analysis was done in an older version of SANDAG’s transportation model, similar results would be expected in the new model, given the forecasted population and housing growth in the communities around the corridor.
Based on this preliminary analysis, converting SR 125 to general purpose lanes would not be consistent with SANDAG Resolution No. 2023-22, or federal and state climate law. Therefore, various managed lane options have been considered for the SR 125:
• Adding two managed lanes: The 2021 Regional Plan envisioned the addition of managed lanes by 2042. This option would take the longest to implement and the cost of construction and mitigation is expected to be high due to required bridge widenings, impacts to sensitive habitat, VMT mitigation, and necessary facility retrofits to meet compliance with Caltrans standards. • Convert one existing lane in each direction to managed lanes: As part of developing the initial concept for the 2025 Regional Plan, staff explored converting one lane in each direction to a managed lane and one lane in each direction to a general-purpose lane. This was determined to be infeasible due to the operational challenge of monitoring and managing the lanes in the event of a crash where the facility would be narrowed to one usable lane. • Convert all existing lanes to managed lanes: Converting the toll road to a fully managed facility is believed to be a lower cost to implement and with less environmental impacts. It also would be consistent with SANDAG Resolution No. 2023-22. A fully managed facility could be operated in a variety of ways to address specific goals related to traffic and equity, including ensuring there is always a free option. This would provide an alternative to toll-only operations, allow for debt repayment sooner, and provide funds to reinvest in the corridor for operating and maintaining the roadway into the future. As such, this is the alternative included in the 2035 phase of the initial concept for the 2025 Regional Plan.
In parallel with these options, SANDAG staff recommends conducting an equity analysis of the toll road to evaluate current equity impacts and identify near-term opportunities for addressing those impacts. A comprehensive equity analysis is expected to cost approximately $200,000 and take a year to complete.
Elimination of SR 125 Debt
SANDAG purchased the SR 125 franchise from creditors following bankruptcy in December 2011 at a 65% discount for $341 million. As part of the purchase price, SANDAG inherited the outstanding TIFIA loan for the facility, which, along with the TransNet loan, were the only outstanding debt obligations for SR 125. The TIFIA loan was refinanced and the TransNet loan was paid off for a total cash flow savings of $147 million.
Based on Board feedback, four potential scenarios have been considered that would allow payment of the outstanding debt obligations as a step toward relinquishment of SR 125 to Caltrans. All scenarios account for the estimated cash that will be available through the estimated payoff timeline shown in the table below. Although the debt could be repaid as early as 2027, the EIR/EIA would need to be completed before toll-only operations could be removed. Scenario 4 is aligned with the timeline for converting the toll road to a fully managed facility as proposed in the initial concept for the 2025 Regional Plan.
CURRENT SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4
Pay-Off Date July 1, 2042 March 31,
2024 July 1, 2027 July 1, 2029 July 1, 2035
Final Term Now Call Date Breakeven Breakeven
Estimated Cash
Balances $247.7M $98.3M $114.0M $132.9M $182.4M
Debt Repayment
Requirement 0 $172.3M $143.3M $129.4M $130.6M
Shortfall -$74.0M -$29.3M
Funds available to
reinvest in SR 125 +$247.7M +$3.5M +$51.8M
NOTE: Financial stability projections are based on current revenue trends but may change due to unforeseen events requiring financial reassessment.
Next Steps
Pending Board direction, a portion of the funding currently allocated for the SR 125 Comprehensive Multimodal Corridor Plan could be re-purposed to start the Project Initiation Phase. Staff could identify additional funding to complete the planning work and conduct the equity analysis. This work would help to define what options the Board can consider for long-term operations on the SR 125, including the level of environmental analysis, mitigation, and/or maintenance/repair work that would be required.
Antoinette Meier, Senior Director, Regional Planning
Andre Douzdjian, Chief Financial Officer
Attachment: 1. Board Resolution No. 2023-22