RTD Pension Documents

Officers/trustees of local 1001 ATU and the pension trust fund. January 28, 2014

3315 West 72nd Ave

Westminster, CO 80030 Phone: 303-412-1001 Fax: 303-412-1597

Re: $200 million RTD pension fund in danger of going bust analyst says Denver Post article.

I’m writing today to formally demand that each officer that has served as a fiduciary/trustee on the

pension fund (that is currently serving as an officer for the local) resign as an officer/trustee for the local

1001 and pension fund and do so by the end of the week.

There is an inherent conflict of interest between the trustee/officer in the protection of the membership

in the matter of recovering money from the management company for the management company’s

failures to have acted as fiduciaries, in the protection of the “pension fund”.

I respectfully request that the trustee/officers turn in their resignations at the end of the week. January

31, 2014.

Since such litigation will likely include the officers/trustees of the local in the protection of the pension

plan insurance carriers but not in the protection of the membership. Such resignation is required in

order to ensure the protection of the membership from any adverse action of a trustee.

As we can see that such actions are being brought in Los Angeles, California for recovery of $95 million

for the fiduciary failure of the management company to protect the pension, there is no argument to

the contrary.

Allen Grove

CC: International President. 01/28/2014

International Headquarters

5025 Wisconsin Ave., NW, Washington, DC 20016

Tel: 202-537-1645; FAX: 202-244-7824

Regional Transportation District 1600 Blake Street

Denver, CO 80202-1399

303-299-2303

Board of Directors

Chair – Chuck Sisk, District 0 First Vice Chair – Larry Hoy, District J Second Vice Chair – Bill James, District A Secretary – Jeff Walker, District D Treasurer – Tom Tobiassen, District F Lorraine Anderson, District L Gary Lasater, District G

Kent Bagley, District H Judy Lubow, District I

Bruce Daly, District N Natalie Menten, District M

Barbara Deadwyler, District B Angie Rivera-Malpiede, District C

Dr. Claudia Folska, District E Paul Daniel Solano, District K

AGENDA Financial Administration & Audit

Tuesday, January 14, 2014

Rooms R, T, & D

5:30 PM

Conference Dial-in # 303-299-2663

Conference ID: 15120

Financial Administration and Audit Committee

Chaired by Jeff Walker

A. Call to Order

B. Recommended Actions

• Resolution No. ____, Series of 2014 Appointment of Trustees to the RTD

Pension Trust and Defined Contribution Plan

C. Updates

• Salaried Employee Defined Benefit Pension Plan Update (Howerter/Rael &

Letson)

• Represented Employee Defined Benefit Pension Plan Update

(Howerter/Gabriel Roeder Smith)

• November 2013 Monthly Financial Status Report (Howerter/MacLeod)

D. Other Matters

E. Next Meeting Date - February 11, 2014

F. Adjourn

The following communication assistance is available for public meetings:

Language Interpreters

Sign-language Interpreters

Assisted listening devices

Please notify RTD of the communication assistance you require at least 48 business hours in advance of a

RTD meeting you wish to attend by calling 303.299.2307

THE CHAIR REQUESTS THAT ALL PAGERS AND CELL PHONES BE SILENCED DURING THE BOARD OF

DIRECTORS MEETING FOR THE REGIONAL TRANSPORTATION DISTRICT.

BOARD OF DIRECTORS REPORT

To:

Phillip A. Washington, General Manager

Date: January 9, 2014

From:

Terry L. Howerter,Chief Financial Officer

GM

Date:

January 9, 2014

Board Meeting Date: January 14, 2014

Subject:

Resolution No. ____, Series of 2014

Appointment of Trustees to the RTD


Resolution

RECOMMENDED ACTION

Prepared by:

Paula Perdue, Executive Director

Approved by:

1.B.1

Packet Pg. 3

REGIONAL TRANSPORTATION DISTRICT

RESOLUTION No. _____ SERIES OF 2014

APPOINTMENT OF TRUSTEES TO THE RTD PENSION TRUST AND DEFINED CONTRIBUTION PLAN

Whereas, RTD maintains the RTD Pension Plan and Trust for salaried employees hired by RTD

before January 1, 2008 and the RTD Defined Contribution Plan and Trust (the Trusts) for employees hired on

or after January 1, 2008; and,

Whereas, RTD Board Directors and salaried staff serve as trustees for the Trusts; and,

Whereas on December 16, 2008 the RTD Board of Directory by Resolution No. 19 Series of 2008

amended Section 7.01 of the RTD Pension Trust regarding appointment of Trustees and provided that each

Trustee who is a member of the Board of Directors of RTD shall serve a term concurrent with his or her elected

term, and one senior management and one middle management Trustee shall each serve a three year, and one

senior management and one middle Trustee shall each serve a two year term; and

Whereas on January 8, 2008 the RTD Board of Directors adopted Resolution No. 1 Series of 2008

providing that a screening committee composed of the Board Chair, the Chair of the Salaried Employee Pension

Trust Fund and the Finance Chair will screen applications from the middle management salaried Employee

Class and the senior management salaried employee calls and will bring recommendations back to the Board;

and,

Whereas on November 10, 2010 Resolution No 27 series of 2010, the Board made additional

modifications to state that for reappointment of trustees who have served satisfactorily and in whose education

the Trusts have made substantial investments, it is not necessary to seek applications for renewal and the

application process established by the RTD Board of Directors in 2008 will be used on those occasions when

the Board finds it necessary or appropriate to appoint new salaried trustees to the Trusts; and,

Whereas the Board of Directors may establish shorter terms as may be necessary to maintain staggered

terms; and,

Whereas, the terms for Scott Reed and Lou Ha expired on 12/31/2013 each of whom has been

previously recommended by the screening committee; and

NOW THEREFORE BE IT RESOLVED THAT

1. The RTD Board of Directors wish to re-appoint Scott Reed to serve as a senior management Trustee on

the Boards of the Trusts with a new two-year term that will expire on 12-31-2015.

2. The RTD Board of Directors wishes to re-appoint Lou Ha to serve as a middle management Trustee on

the Boards of the Trusts with a new two year term that will expire on 12-31-2015.

1.B.1

Packet Pg. 4

Passed and adopted by the Board of Directors of the Regional Transportation District this 21 day of January,

2014.

______________________ _____________________

Charles Sisk, Chair Jeff Walker, Secretary

For information purposes:

Name of Trustee Term Expiration Date

Judy Lubow 12/31/2016

Tom Tobiassen 12/31/2014

Scott Reed 12/31/2015

Marla Lien 12/31/2014

Sylvia Francis 12/31/2014

Lou Ha 12/31/2015

Terry Howerter, CFO Permanent Member

1.B.1

Packet Pg. 5


To:



From:

Terry L. Howerter, Chief Financial Officer

GM

Date:

January 9, 2014


Subject:

Salaried Employee Defined Benefit Pension Plan

Update (Howerter/Rael & Letson)

ATTACHMENTS:

RTD Board Presentation 1-2014_Salaried Employees' Pension Trust (PDF)

Prepared by:

Terry Howerter, Chief Financial Officer

Approved by:

1.C.1

Packet Pg. 6

RTD Salaried Employees’ Pension Trust

RAEL & LETSONActuaries & Benefit Consultants

Fund Status as of January 1, 2013

January 14, 2014

1.C.1.a

Packet P

g. 7

Attachment: RTD Board Presentation 1-2014_Salaried Employees' Pension Trust (1842 : Salaried Employee Defined Benefit Pension Plan

1

January 1, 2013 Valuation Highlights

� Total participant count decreased by 8 (from 736 to 728)

� Plan closed to new participants on 1/1/2008

� Actuarial Accrued Liability increased by $7.8M (from $110.9M to $118.7M)

� Actuarial Value of Assets increased by $0.3M (from $103.9M to $104.2M)

� Unfunded Actuarial Accrued Liability increased by $7.5M (from $7.0M to $14.5M)

� 87.8% funded on an actuarial basis

� Recommended contribution increased by $0.5M from $3.9M to $4.4M

1.C.1.a

Packet P

g. 8


2

Long-Term Funding

� Effective with the 2013 Fiscal Year, the funding policy was changed from a percent of payroll (9% cap) to the recommended contribution amount up to a $3.1M annual cap

� Current funding policy is more prudent given the Plan’s decreasing active population and resulting reduction in future expected payroll

� If all actuarial assumptions are met each year, including a net investment return of 7.50% per year, and annual contributions equal the recommended contribution up to a $3.1M annual cap:

� The recommended contribution is projected to decrease from $4.4M in the 2014 Fiscal Year

� The recommended contribution is expected to exceed the $3.1M cap through the 2019 Fiscal Year and fall below the cap thereafter

� The Plan is projected to reach 100% funding in 2031

1.C.1.a

Packet P

g. 9


Long-Term Funding (Continued)

� Per the investment consultant, the estimated 2013 return on investments through December 31st is 20.7% (net of fees)

� If the net return in 2013 is 20%, the Plan is projected to reach 100% funding in 2018 (13 years earlier), and RTD can expect to pay the $3.1M contribution cap through the 2016 Fiscal Year (3 fewer years), if all other actuarial assumptions are met

� Due to the Plan’s size and nature, future investment returns have a significant impact on projected liabilities – we will keep the Board apprised of the impact of the Plan’s investment performance on future costs

3

1.C.1.a

Packet P

g. 10


GASB 67/68

� GASB 67 (financial accounting for the Plan) is effective for the Plan’s Fiscal Year ending December 31, 2014

� We will roll forward the January 1, 2014 valuation results to December 31, 2014

� Under GASB standards, the long-term investment return assumption must be sufficient to pay projected benefits and the Plan’s assets must be invested using a strategy to achieve this investment return

� Based on the Plan’s projections and new funding policy, the Plan’s assumed net investment return of 7.5% satisfies the new GASB standards

� GASB 68 (financial accounting for the Employer) is effective for RTD’s Fiscal Year ending December 31, 2015

� RTD may early adopt GASB 68 if desired – to show consistent reporting for the Plan and Employer

� We will provide the applicable disclosure information for 2014 (GASB 27 or GASB 68) along with the GASB 67 information for the Plan in February 2015

4

1.C.1.a

Packet P

g. 11


Next Steps

� We will continue to monitor and review the following items going forward:

� Funding policy (recommended contribution amount)

� Actuarial assumptions and methods

� Policies adopted by other public pension plan systems

� All such items will be reviewed by Rael & Letson and discussed with the Board annually

5

1.C.1.a

Packet P

g. 12



To:



From:


GM

Date:

January 9, 2014


Subject:

Represented Employee Defined Benefit Pension

Plan Update (Howerter/Gabriel Roeder Smith)

ATTACHMENTS:

ATU_RTD Board Presentation (PDF)

Prepared by:

Terry Howerter, Chief Financial Officer

Approved by:

1.C.2

Packet Pg. 13

Copyright © 2014 GRS – All rights reserved.

RTD/ATU 1001 Pension Plan

January 14, 2014

Pension Fund StatusAs of January 1, 2013

1.C.2.a

Packet Pg. 14

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan

January 1, 2013 Valuation Highlights(the plan is in funding peril)

Ã Contributions are not sufficient to fund the liabilities

• Actuarial requirement is for 28.3%; 11.0% is scheduled for receipt

• Fund is projected to be fully depleted by 2032

Ã Actuarial Accrued Liability increased by $16.5M

• From $406.3M to $422.8M

Ã Actuarial Value of Assets decreased by $11.4M

• From $212.3M to $200.9M

• Market value increased from $194 M to $198 M

Ã Unfunded Actuarial Accrued Liability increased by $27.9M

• From $194.0M to $221.9M

• This raises the required contribution amount

• Scheduled contributions do not even cover the normal (annual) costs of the plan

2

1.C.2.a

Packet Pg. 15

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan


Ã The normal cost is 13.15% of pay

• The scheduled contribution is 11% of pay

• New agreement does increase contributions over time

Ã Actuarially recommended contribution increased by $1.8M

• This ARC keeps increasing as payments are “missed”

Ã 47.5% funded on an actuarial basis

Ã Total active participant count decreased by 42

• From 1,720 to 1,678

• New hires will “bend down” the normal cost, so more funding can go to the unfunded accrued liability

3

1.C.2.a

Packet Pg. 16

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan

History of the Funded Ratio

4

Valuation Date- January 1, Funded Ratio

2002 106.39%

2003 82.96

2004 91.09

2005 91.73

2006 89.06

2007 87.07

2008 86.03

2009 72.57

2010 73.08

2011 68.67

2012 52.24

2013 47.52

1.C.2.a

Packet Pg. 17

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan

The 11% scheduled contribution amount was insufficient, starting in 2003

5

Plan Year Ended December 31,

Percentage of ARC contributed

2002 102.2%

2003 53.7

2004 60.9

2005 75.3

2006 64.2

2007 64.6

2008 67.8

2009 44.5

2010 59.0

2011 47.3

2012 33.5

2013 --

1.C.2.a

Packet Pg. 18

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan

Long-Term Funding-Reforms to improve the plan

6

Ã Total ARC is 28.31% of payroll compared to the total scheduled contribution rate of 11.00% of payroll.

Ã Amendment #22 was adopted in 2010 with the following changes in effect for participants hired on or after January 1, 2011 (Tier 2):

• New benefit schedule listed in Section 6.01 of the Plan provisions

• Vesting is changed from 5 years to 10 years

• The benefit multiplier is changed from 2.5% to 1.0%

• Unreduced retirement is changed from age 55 with 20 years of service to age 60 with 20 years of service

• Early retirement reduction is changed from 5.0% from age 55 to 2.5% from age 60

• The maximum service included in the benefit calculation is reduced from 30 years to 25 years

• Sick and vacation payouts are no longer included in the pension benefit calculation

• Interest on employee contributions is changed from 5% to 3%

1.C.2.a

Packet Pg. 19

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan


7

Ã On February 27, 2013, a tentative agreement was reached with the following schedule for contributions:

Year RTD Members Total

2013 12% 4% 16%

2014 12% 4% 16%

2015 13% 5% 18%

2016 13% 5% 18%

2017 13% 5% 18%

1.C.2.a

Packet Pg. 20

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan


8

Ã If all actuarial assumptions are met each year, including a net investment return of 7.0% per year, and annual contributions equal those stated in the tentative agreement:

• Assets will be fully depleted by 2032

Ã Per the investment consultant, the estimated 2013 investments return is 14% • Incorporating this into the above projections, assets will be fully depleted by 2034

• To reach 100% funding by 2043, assets would need to earn over 14% per year through 2019

1.C.2.a

Packet Pg. 21

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan

RTD/ATU Summary

Ã Reforms have been enacted to reduce benefit accruals for new hires and to improve the funding of the plan

Ã Projections (based on an assumed 7% return) are not enough to ensure the plan will remain viable throughout the next 30 years.

9

1.C.2.a

Packet Pg. 22

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan

GASB 67/68

10

Ã GASB 67 (financial accounting for the Plan) is effective for the Plan’s Fiscal Year ending December 31, 2014

• We will roll forward the January 1, 2014 valuation results to December 31, 2014

• Under GASB standards, the long-term investment return assumption must be sufficient to pay projected benefits and the Plan’s assets must be invested using a strategy to achieve this investment return

• It is possible that the discount rate used to determine the liability for RTD’s balance sheet will be less than the 7% (creating a higher unfunded liability than what the valuation will show)

Ã GASB 68 (financial accounting for the Employer) is effective for RTD’s Fiscal Year ending December 31, 2015

• We will provide the applicable disclosure information for 2014 (GASB 27 or GASB 68) along with the GASB 67 information for the Plan in February 2015

1.C.2.a

Packet Pg. 23

Att

ach

men

t: A

TU

_RT

D B

oar

d P

rese

nta

tio

n (

1843

: R

epre

sen

ted

Em

plo

yee

Def

ined

Ben

efit

Pen

sio

n P

lan


To:



From:


GM

Date:

January 9, 2014


Subject:

November 2013 Monthly Financial Status

Report (Howerter/MacLeod)

ATTACHMENTS:

113013 RTD MFS (PDF)

Prepared by:

Doug MacLeod, Manager

Approved by:

1.C.3

Packet Pg. 24


INFO

X

2.9% 1.0% 8.5%

239 $92 $3,070

Sales & Use Tax

Ridership

2.0% 4.5% 4.3%

1,828 $4,691 $17,508

Actual vs. Prior Year 2013 Actual 2012 Actual Variance % Variance

Month

Bus 5,258 5,324 (66) -1.2%

West Line 368 - 368

Light Rail 1,537 1,656 (119) -7.2%

Revenue Service Boardings 7,163 6,980 183 2.6%

Mall Shuttle 1,104 1,045 59 5.6%

Other 93 96 (3) -3.1%

Month System-Wide Boardings 8,360 8,121 239 2.9%

Year-to-Date

Bus 58,238 58,897 (659) -1.1%

West Line 2,597 - 2,597

Light Rail 18,738 19,170 (432) -2.3%

Revenue Service Boardings 79,573 78,067 1,506 1.9%

Mall Shuttle 12,975 12,624 352 2.8%

Other 1,044 1,074 (30) -2.8%

Year-to-Date System-Wide Boardings 93,592 91,765 1,828 2.0%

Actual vs. Budget 2013 Actual 2013 Budget Variance % Variance

Month 8,360 8,389 (29) -0.3%

Year-to-Date 93,592 94,112 (520) -0.6%

* 2012 had one more day due to Leap Year

** The West Line began it's first full month of revenue service in May 2013

DISCUSSION

RIDERSHIP (in Thousands)

Subject: November 2013 Monthly Financial Status Report ACTION

DASHBOARD (in Thousands)

Current Month vs. Prior Year

Month

Year-to-Date vs. Prior Year-to-

Date

To: Phillip A. Washington, General Manager

From: Terry L. Howerter, Chief Financial Officer



Board Meeting Date:

7.2

7.7

8.2

8.7

9.2

9.7

(Mil

lion

s)

2013 Actual 2013 Amended Budget 2012 Actual

2013 Amended Budget

2013 Actual

2012 Actual

Ridership Fare Revenue

Ridership Fare Revenue Sales & Use

Tax

Sales & Use Tax

1.C.3.a

Packet Pg. 25

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)


Month 9,156$ 9,064$ 92$ 1.0%

Year-to-Date 108,574 103,883 4,691 4.5%


Month 9,156$ 9,708$ (552)$ -5.7%

Year-to-Date 108,574 109,611 (1,037) -0.9%


Month 39,065$ 35,995$ 3,070$ 8.5%

Year-to-Date 423,053 405,545 17,508 4.3%


Month 39,065$ 37,520$ 1,545$ 4.1%

Year-to-Date 423,053 420,290 2,763 0.7%

Reviewed and verified by: Terry L. Howerter, Chief Financial Officer

Total year-to-date operating expenditures were within the planned amounts included in the 2013 Amended Budget.

Expenditures

FARE REVENUE (in Thousands)

SALES & USE TAXES (in Thousands)

$8.0

$8.5

$9.0

$9.5

$10.0

$10.5

$11.0

$11.5

(Mil

lion

s)


2013 Actual

2013 Amended Budget

2012 Actual

$32.0

$34.0

$36.0

$38.0

$40.0

$42.0

$44.0

$46.0

$48.0

(Mil

lion

s)


2012 Actual

2013 Amended Budget

2013 Actual

1.C.3.a

Packet Pg. 26

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)

STATEMENT OF POSITIONAs of November 30, 2013 (In Thousands)

(UNAUDITED)

2013 2013 2013 2013 December 31, 2012

Base System FasTracks Project FasTracks Ops Combined Combined Change

ASSETS

CURRENT ASSETS:

Cash & Cash Equivalents 138,036$ 175,811$ 3,930$ 317,777$ 292,839$ 24,938$

Cash Reserved for Eagle P3 Payment - 18,264 - 18,264 144,344 (126,080) (1)

Receivables:

Sales Taxes 47,084 31,389 - 78,473 80,237 (1,764)

Grants 5,902 7,283 - 13,185 114,224 (101,039) (2)

Other (less allowance for doubtful accts) 7,727 7,942 - 15,669 14,551 1,118

Total Net Receivables 60,713 46,614 - 107,327 209,012 (101,685)

Inventory 31,207 - - 31,207 30,369 838

Prepaid Expenses 3,726 59,647 - 63,373 72,880 (9,507)

Restricted Debt Service/Project Funds 213,437 597,145 - 810,582 753,502 57,080 (3)

Other Assets 2,483 2,553 - 5,036 6,726 (1,690)

TOTAL CURRENT ASSETS 449,602 900,034 3,930 1,353,566 1,509,672 (156,106)

NONCURRENT ASSETS:

Capital Assets:

Land 175,428 24,289 - 199,717 189,910 9,807

Land Improvements 1,285,752 631,201 - 1,916,953 1,366,950 550,003

Buildings 248,049 9,399 - 257,448 257,852 (404)

Revenue Earning Equipment 559,877 258,718 - 818,595 785,534 33,061

Shop, Maintenance & Other Equipment 109,235 2,759 - 111,994 105,286 6,708

Construction in Progress 123,292 2,449,903 - 2,573,195 2,458,498 114,697

Total Capital Assets 2,501,633 3,376,269 - 5,877,902 5,164,030 713,872

Accumulated Depreciation (1,141,256) (70,045) - (1,211,301) (1,108,184) (103,117)

Net Capital Assets 1,360,377 3,306,224 - 4,666,601 4,055,846 610,755

TABOR Reserves 11,050 6,193 - 17,243 17,566 (323)

Restricted Debt Service/Debt Service Reserves 27,140 27,702 - 54,842 78,013 (23,171) (4)

Deposits 1,500 - - 1,500 1,500 -

Other 3,239 82,032 - 85,271 87,784 (2,513)

TOTAL NONCURRENT ASSETS 1,403,306 3,422,151 - 4,825,457 4,240,709 584,748

TOTAL ASSETS 1,852,908$ 4,322,185$ 3,930$ 6,179,023$ 5,750,381$ 428,642$

(1) Represents earned value portion of Eagle P3 construction payment to be made in January

(2) 2013 drawdown of FasTracks capital grants that were accrued in 2012

(3) Increase in project funds due to the issuance of COPs in 2013 that will continue to be drawn down as bus deliveries occur

(4) Decrease due to refinancing in which reserve funds were released due to RTD credit rating


1.C.3.a

Packet Pg. 27

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)

STATEMENT OF POSITIONAs of November 30, 2013 (In Thousands)

(UNAUDITED)

2013 2013 2013 2013 December 31, 2012

Base System FasTracks Project FasTracks Ops Combined Combined Change


LIABILITIES

CURRENT LIABILITIES:

Accounts & Contracts Payable 80,946$ 69,846$ 450$ 151,242$ 278,317$ (127,075)$ (5)

Current Portion of Long Term Debt 45,720 8,137 - 53,857 46,575 7,282

Accrued Compensation 18,664 - - 18,664 17,537 1,127

Accrued Interest Payable 10,544 17,280 - 27,824 17,042 10,782

Other 14,969 7 - 14,976 23,511 (8,535)

TOTAL CURRENT LIABILITIES 170,843 95,270 450 266,563 382,982 (116,419)

NONCURRENT LIABILITIES:

Long Term Debt 566,473 2,063,043 - 2,629,516 2,376,966 252,550 (6)

Other Long-Term Liabilities - 120,819 - 120,819 120,819 -

Net Pension Obligation 50,899 - - 50,899 50,899 -

TOTAL NONCURRENT LIABILITIES 617,372 2,183,862 - 2,801,234 2,548,684 252,550

TOTAL LIABILITIES 788,215$ 2,279,132$ 450$ 3,067,797$ 2,931,666$ 136,131$

NET POSITION

Invested in Capital Assets, Net of Related Debt 940,502$ 1,813,909$ -$ 2,754,411$ 2,348,683$ 405,728$

TABOR Fund 12,262 6,042 - 18,304 17,391 913

Debt Service Reserves 48,257 45,982 - 94,239 115,136 (20,897)

Other Restricted Assets 7,223 84,585 - 91,808 96,011 (4,203)

FasTracks Contingency Fund - 30,000 - 30,000 30,000 -

FasTracks Construction Fund - 48,449 - 48,449 161,832 (113,383) (7)

FasTracks Internal Savings Account (FISA) 5,563 - - 5,563 - 5,563 (8)

Operating Reserve - - - - 5,614 (5,614)

Board Appropriated Fund 16,200 4,695 1,160 22,055 13,200 8,855

Capital Replacement Fund 9,000 4,695 1,160 14,855 6,000 8,855

Unrestricted Fund Balance 25,686 4,695 1,160 31,541 24,848 6,693

TOTAL NET POSITION 1,064,693$ 2,043,052$ 3,480$ 3,111,225$ 2,818,715$ 292,510$

TOTAL LIABILITIES & NET POSITION 1,852,908$ 4,322,185$ 3,930$ 6,179,023$ 5,750,381$ 428,642$

- - - - -

(5) Reduction due to January scheduled construction payment to DTP on Eagle P3

(6) Increase due to the issuance of COPs in 2013

(7) Decrease due to funding of Eagle P3 earned value payments. Funds will be replenished with draws of bond proceeds.

(8) Sale of Civic Center Air Rights less cost of Northwest Area Mobility Study (NAMS)

1.C.3.a

Packet Pg. 28

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)

REGIONAL TRANSPORTATION DISTRICT - COMBINED

STATEMENT OF REVENUE, EXPENSES AND CHANGE IN NET POSITIONNovember 30, 2013 (In Thousands)

(UNAUDITED)

Month Month YTD YTD

Combined Combined Fav/ % Fav/ Combined Combined Fav/ % Fav/

Actual Budget (Unfav) (Unfav) Actual Budget (Unfav) (Unfav)

----------------- ----------------- ----------------- ------------- ----------------- ----------------- ----------------- -------------

OPERATING REVENUE:

Passenger Fares 9,156$ 9,708$ (552)$ -5.7% 108,574$ 109,611$ (1,037)$ -0.9%

Advertising, Rent and Other 421 476 (55) -11.6% 4,698 4,947 (249) -5.0%0.0% 0.0%

Total Operating Revenue 9,577 10,184 (607) -6.0% 113,272 114,558 (1,286) -1.1%

OPERATING EXPENSES

Bus Operations 23,231 23,174 (57) -0.2% 245,926 250,382 4,456 1.8% (1)

Rail Operations 3,496 4,391 895 20.4% 38,936 47,467 8,531 18.0% (2)

Planning 360 394 34 8.6% 3,808 5,014 1,206 24.1% (3)

Capital Programs 3,734 2,368 (1,366) -57.7% 16,054 15,921 (133) -0.8% (4)

Safety, Security and Facilities 3,870 7,934 4,064 51.2% 38,062 48,535 10,473 21.6% (5)

General Counsel 702 698 (4) -0.6% 7,637 7,855 218 2.8%

Finance and Administration 2,843 2,799 (44) -1.6% 27,571 32,624 5,053 15.5% (6)

Communications 968 826 (142) -17.2% 9,640 10,261 621 6.1% (7)

Executive Office 216 407 191 46.9% 3,796 4,165 369 8.9%

Board Office 73 74 1 1.4% 673 902 229 25.4%

Other Non-Departmental Expenditures (1,809) (412) 1,397 -339.1% 361 173 (188) -108.7%

FasTracks Service Increase 30 248 218 87.9% 4,027 4,308 281 6.5%

Depreciation 9,536 9,295 (241) -2.6% 104,633 101,298 (3,335) -3.3%0.0% 0.0%

Total Operating Expenses 47,250 52,196 4,946 9.5% 501,124 528,905 27,781 5.3%

OPERATING INCOME/(LOSS) (37,673) (42,012) 4,339 -10.3% (387,852) (414,347) 26,495 6.4%

NONOPERATING REVENUE (EXPENSES)

Sales & Use Tax 39,065 37,520 1,545 4.1% 423,053 420,290 2,763 0.7%

Operating Grants 7,608 9,568 (1,960) -20.5% 78,457 99,251 (20,794) -21.0%

Investment Income 560 276 284 102.9% 2,773 2,889 (116) -4.0%

Other Income 813 147 666 453.1% 15,072 11,493 3,579 31.1%

Gain/(Loss) Capital Assets (77) - (77) 0.0% (53) - (53) 0.0%

Interest Expense (5,895) (7,270) 1,375 -18.9% (62,640) (65,228) 2,588 4.0%0.0% 0.0%

Net Nonoperating Revenue (Expense) 42,074 40,241 1,833 4.6% 456,662 468,695 (12,033) -2.6%

INCOME BEFORE CAPITAL GRANTS 4,401 (1,771) 6,172 -348.5% 68,810 54,348 14,462 26.6%

Capital Grants and Local Contributions 15,639 41,250 (25,611) -62.1% 225,898 264,500 (38,602) -14.6%

INCREASE/(DECREASE) IN NET POSITION 20,040$ 39,479$ (19,439)$ -49.2% 294,708$ 318,848$ (24,140)$ -7.6%

(1) Positive variance on purchased transportation due to invoice timing

(2) Variance is primarily due to lower than anticipated costs on replacement parts and the LRV maintenance campaign

(3) Variance due to timing of invoice for Northwest Area Mobilitiy Study (NAMS) costs

(4) West Line pre-revenue service costs less than anticipated

(5) Variance primarily due to timing of multiple projects

(6) Variance due to timing of fare media purchases, low value computer and communication equipment purchases and data processing services

(7) Variance from budgeted costs from invoice timing for route promotion materials and SmartCard

1.C.3.a

Packet Pg. 29

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)

REGIONAL TRANSPORTATION DISTRICT - BASE SYSTEM


(UNAUDITED)

Month Month YTD YTD

Base System Base System Fav/ % Fav/ Base System Base System Fav/ % Fav/


----------------- ----------------- ----------------- ------------- ----------------- ----------------- ----------------- -------------

OPERATING REVENUE:

Passenger Fares 8,842$ 9,314$ (472)$ -5.1% 106,176$ 106,772$ (596)$ -0.6%

Advertising, Rent and Other 421 476 (55) -11.6% 4,698 4,947 (249) -5.0%0.0% 0.0%

Total Operating Revenue 9,263 9,790 (527) -5.4% 110,874 111,719 (845) -0.8%

OPERATING EXPENSES

Bus Operations 23,231 23,174 (57) -0.2% 245,926 250,382 4,456 1.8%

Rail Operations 2,600 3,474 874 25.2% 30,637 39,058 8,421 21.6%

Planning 313 344 31 9.0% 3,313 4,551 1,238 27.2%

Capital Programs 353 1,412 1,059 75.0% 3,769 7,167 3,398 47.4%

Safety, Security and Facilities 3,512 7,582 4,070 53.7% 34,913 45,374 10,461 23.1%

General Counsel 702 698 (4) -0.6% 7,637 7,855 218 2.8%

Finance and Administration 2,776 2,730 (46) -1.7% 26,953 31,920 4,967 15.6%

Communications 845 784 (61) -7.8% 8,296 9,053 757 8.4%

Executive Office 216 407 191 46.9% 3,796 4,165 369 8.9%

Board Office 73 74 1 1.4% 673 902 229 25.4%

Other Non-Departmental Expenditures (1,815) (413) 1,402 -339.5% 355 174 (181) -104.0%

FasTracks Service Increase (1,253) (1,097) 156 -14.2% (10,708) (10,489) 219 -2.1%

Depreciation 6,291 6,298 7 0.1% 74,367 73,535 (832) -1.1%0.0% 0.0%

Total Operating Expenses 37,844 45,467 7,623 16.8% 429,927 463,647 33,720 7.3%

OPERATING INCOME/(LOSS) (28,581) (35,677) 7,096 -19.9% (319,053) (351,928) 32,875 9.3%


Sales & Use Tax 23,439 22,512 927 4.1% 253,832 252,174 1,658 0.7%

Operating Grants 4,303 8,126 (3,823) -47.0% 75,318 91,077 (15,759) -17.3%

Investment Income 139 100 39 39.0% 655 802 (147) -18.3%

Other Income 114 127 (13) -10.2% 10,056 9,484 572 6.0%

Gain/(Loss) Capital Assets (77) - (77) 0.0% (53) - (53) 0.0%

Interest Expense (1,722) (1,779) 57 -3.2% (19,289) (16,418) (2,871) -17.5%0.0% 0.0%

Net Nonoperating Revenue (Expense) 26,196 29,086 (2,890) -9.9% 320,519 337,119 (16,600) -4.9%

INCOME BEFORE CAPITAL GRANTS (2,385) (6,591) 4,206 -63.8% 1,466 (14,809) 16,275 109.9%


INCREASE/(DECREASE) IN NET POSITION 1,670$ (388)$ 2,058$ -530.4% 10,347$ 20,342$ (9,995)$ -49.1%

1.C.3.a

Packet Pg. 30

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)

REGIONAL TRANSPORTATION DISTRICT - FASTRACKS PROJECT


(UNAUDITED)

Month Month YTD YTD

FasTracks Project FasTracks Project Fav/ % Fav/ FasTracks Project FasTracks Project Fav/ % Fav/


----------------- ----------------- ----------------- ------------- ----------------- ----------------- ----------------- -------------

OPERATING REVENUE:

Passenger Fares -$ -$ -$ 0.0% -$ -$ -$ 0.0%

Advertising, Rent and Other - - - 0.0% - - - 0.0%0.0% 0.0%

Total Operating Revenue - - - 0.0% - - - 0.0%

OPERATING EXPENSES

Bus Operations - - - 0.0% - - - 0.0%

Rail Operations 1 - (1) 0.0% 4 3 (1) -33.3%

Planning 47 50 3 6.0% 495 463 (32) -6.9%

Capital Programs 3,306 883 (2,423) -274.4% 11,745 8,243 (3,502) -42.5%

Safety, Security and Facilities - - - 0.0% - - - 0.0%

General Counsel - - - 0.0% - - - 0.0%

Finance and Administration 67 69 2 2.9% 618 704 86 12.2%

Communications 122 42 (80) -190.5% 530 470 (60) -12.8%

Executive Office - - - 0.0% - - - 0.0%

Board Office - - - 0.0% - - - 0.0%

Other Non-Departmental Expenditures 6 1 (5) -500.0% 7 - (7) 0.0%

FasTracks Service Increase 1,283 1,345 62 4.6% 14,735 14,797 62 0.4%

Depreciation 3,245 2,997 (248) -8.3% 30,266 27,763 (2,503) -9.0%0.0% 0.0%

Total Operating Expenses 8,077 5,387 (2,690) -49.9% 58,400 52,443 (5,957) -11.4%

OPERATING INCOME/(LOSS) (8,077) (5,387) (2,690) 49.9% (58,400) (52,443) (5,957) 11.4%


Sales & Use Tax 14,611 13,993 618 4.4% 150,551 149,446 1,105 0.7%

Operating Grants 3,305 1,442 1,863 129.2% 3,139 8,174 (5,035) -61.6%

Investment Income 421 176 245 139.2% 2,118 2,087 31 1.5%

Other Income 699 20 679 3395.0% 5,016 2,009 3,007 149.7%

Gain/(Loss) Capital Assets - - - 0.0% - - - 0.0%

Interest Expense (4,173) (5,491) 1,318 -24.0% (43,351) (48,810) 5,459 -11.2%0.0% 0.0%

Net Nonoperating Revenue (Expense) 14,863 10,140 4,723 46.6% 117,473 112,906 4,567 4.0%

INCOME BEFORE CAPITAL GRANTS 6,786 4,753 2,033 42.8% 59,073 60,463 (1,390) -2.3%


INCREASE/(DECREASE) IN NET POSITION 18,370$ 39,800$ (21,430)$ -53.8% 276,090$ 289,812$ (13,722)$ -4.7%

1.C.3.a

Packet Pg. 31

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)

REGIONAL TRANSPORTATION DISTRICT - FASTRACKS OPERATIONS


(UNAUDITED)

Month Month YTD YTD

FasTracks Ops FasTracks Ops Fav/ % Fav/ FasTracks Ops FasTracks Ops Fav/ % Fav/


----------------- ----------------- ----------------- ------------- ----------------- ----------------- ----------------- -------------

OPERATING REVENUE:

Passenger Fares 314$ 394$ (80)$ -20.3% 2,398$ 2,839$ (441)$ -15.5%

Advertising, Rent and Other - - - 0.0% - - - 0.0%0.0% 0.0%

Total Operating Revenue 314 394 (80) -20.3% 2,398 2,839 (441) -15.5%

OPERATING EXPENSES

Bus Operations - - - 0.0% - - - 0.0%

Rail Operations 895 917 22 2.4% 8,295 8,406 111 1.3%

Planning - - - 0.0% - - - 0.0%

Capital Programs 75 73 (2) -2.7% 540 511 (29) -5.7%

Safety, Security and Facilities 358 352 (6) -1.7% 3,149 3,161 12 0.4%

General Counsel - - - 0.0% - - - 0.0%

Finance and Administration - - - 0.0% - - - 0.0%

Communications 1 - (1) 0.0% 814 738 (76) -10.3%

Executive Office - - - 0.0% - - - 0.0%

Board Office - - - 0.0% - - - 0.0%

Other Non-Departmental Expenditures - - - 0.0% (1) (1) - 0.0%

Depreciation - - - 0.0% - - - 0.0%0.0% 0.0%

Total Operating Expenses 1,329 1,342 13 1.0% 12,797 12,815 18 0.1%

OPERATING INCOME/(LOSS) (1,015) (948) (67) -21.3% (10,399) (9,976) (423) -15.7%


Sales & Use Tax 1,015 1,015 - 0.0% 18,670 18,670 - 0.0%

Operating Grants - - - 0.0% - - - 0.0%

Investment Income - - - 0.0% - - - 0.0%

Other Income - - - 0.0% - - - 0.0%

Gain/(Loss) Capital Assets - - - 0.0% - - - 0.0%

Interest Expense - - - 0.0% - - - 0.0%0.0% 0.0%

Net Nonoperating Revenue (Expense) 1,015 1,015 - 0.0% 18,670 18,670 - 0.0%

INCOME BEFORE CAPITAL GRANTS - 67 (67) -100.0% 8,271 8,694 (423) -4.9%

Capital Grants and Local Contributions - - - 0.0% - - - 0.0%

INCREASE/(DECREASE) IN NET POSITION -$ 67$ (67)$ -100.0% 8,271$ 8,694$ (423)$ -4.9%

1.C.3.a

Packet Pg. 32

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)


SYSTEM 1% SALES & USE TAX INCLUDING VENDOR ALLOWANCE

FISCAL YEARS 2012 AND 2013

January February March April May June July August September October November December Total Year

Actual 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 To Date

Sales Tax Collections 29,967,067$ 29,337,195$ 33,109,532$ 32,850,700$ 33,941,600$ 35,440,481$ 33,626,601$ 34,457,627$ 35,055,538$ 33,775,579$ 32,468,514$ 39,201,688$ 403,232,122$

Use Tax Collections 3,166,944 3,200,609 3,612,354 3,577,804 3,414,995 4,277,167 2,914,549 3,460,487 3,359,396 3,166,066 3,154,698 4,576,358 41,881,427

Vendor Allowance 364,430 357,872 403,889 400,665 415,493 441,753 406,423 421,738 427,264 410,878 396,214 486,915 4,933,534

Less Cost of Collections Fee (39,560) (39,560) (39,560) (39,560) (39,560) (41,009) (41,009) (41,009) (41,009) (41,009) (41,009) (41,009) (484,863)

Plus Interest Earned 21,999 19,635 22,164 19,700 17,671 15,824 19,695 16,666 17,902 18,713 16,454 18,457 224,881

Net Sales & Use Tax Received 33,480,880$ 32,875,751$ 37,108,379$ 36,809,309$ 37,750,199$ 40,134,216$ 36,926,260$ 38,315,509$ 38,819,091$ 37,330,227$ 35,994,871$ 44,242,409$ 449,787,100$

Favorable/(Unfavorable) to Prior Year 3,276,993$ 2,562,924$ 1,605,410$ 2,895,524$ 3,388,016$ 3,058,507$ 2,751,961$ 2,024,736$ 3,651,913$ 3,514,206$ 1,785,281$ 4,091,223$ 34,606,693$

Percent of Increase/(Decrease) 10.8% 8.5% 4.5% 8.5% 9.9% 8.2% 8.1% 5.6% 10.4% 10.4% 5.2% 10.2%

Percent of Increase Year to Date 10.8% 9.7% 7.8% 8.0% 8.4% 8.3% 8.3% 7.9% 8.2% 8.4% 8.1% 8.3%


Actual 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 To Date

Sales Tax Collections 30,967,664$ 30,054,786$ 33,753,289$ 33,017,575$ 36,581,877$ 37,725,868$ 36,278,676$ 37,097,288$ 36,136,177$ 35,583,841$ 35,626,798$ -$ 382,823,839$

Use Tax Collections 3,092,679 3,036,477 3,515,962 3,116,175 3,139,815 3,701,092 3,192,961 3,065,134 3,579,510 3,415,646 3,033,075 - 35,888,526

Vendor Allowance 378,831 334,280 414,522 401,892 441,798 460,764 439,017 446,700 441,731 433,766 429,988 - 4,623,289

Less Cost of Collections Fee (41,009) (41,009) (41,009) (41,009) (41,817) (41,817) (41,817) (41,817) (41,817) (41,817) (41,817) - (456,755)

Plus Interest Earned 17,402 12,199 15,198 13,168 14,375 16,943 17,803 16,927 17,009 16,912 16,940 - 174,876

Net Sales & Use Tax Received 34,415,567$ 33,396,732$ 37,657,962$ 36,507,802$ 40,136,048$ 41,862,850$ 39,886,640$ 40,584,232$ 40,132,610$ 39,408,348$ 39,064,984$ -$ 423,053,775$

Favorable/(Unfavorable) to Prior Year 934,687$ 520,981$ 549,583$ (301,507)$ 2,385,849$ 1,728,634$ 2,960,380$ 2,268,723$ 1,313,519$ 2,078,121$ 3,070,113$ -$ 17,509,083$

Percent of Increase/(Decrease) 2.8% 1.6% 1.5% -0.8% 6.3% 4.3% 8.0% 5.9% 3.4% 5.6% 8.5% 0.0%


Actual


Actual Plus CU-Leeds Forecast 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 To Date

Sales Tax Collections 30,967,664$ 30,054,786$ 33,753,289$ 33,017,575$ 36,581,877$ 37,725,868$ 36,278,676$ 37,097,288$ 36,136,177$ 35,583,841$ 35,626,798$ 40,948,294$ 423,772,133$

Use Tax Collections 3,092,679 3,036,477 3,515,962 3,116,175 3,139,815 3,701,092 3,192,961 3,065,134 3,579,510 3,415,646 3,033,075 4,797,889 40,686,415

Vendor Allowance 378,831 334,280 414,522 401,892 441,798 460,764 439,017 446,700 441,731 433,766 429,988 510,225 5,133,514

Less Cost of Collections Fee (41,009) (41,009) (41,009) (41,009) (41,817) (41,817) (41,817) (41,817) (41,817) (41,817) (41,817) (41,817) (498,572)

Plus Interest Earned 17,402 12,199 15,198 13,168 14,375 16,943 17,803 16,927 17,009 16,912 16,940 23,192 198,068

Net Sales & Use Tax Received 34,415,567$ 33,396,732$ 37,657,962$ 36,507,802$ 40,136,048$ 41,862,850$ 39,886,640$ 40,584,232$ 40,132,610$ 39,408,348$ 39,064,984$ 46,237,783$ 469,291,558$

Favorable/(Unfavorable) to Prior Year 934,687$ 520,981$ 549,583$ (301,507)$ 2,385,849$ 1,728,634$ 2,960,380$ 2,268,723$ 1,313,519$ 2,078,121$ 3,070,113$ 1,995,374$ 19,504,457$

Percent of Increase/(Decrease) 2.8% 1.6% 1.5% -0.8% 6.3% 4.3% 8.0% 5.9% 3.4% 5.6% 8.5% 4.5%


January 2013 includes $1,852,714 for taxes that were due in January and will be paid in February due to a vendor filing incorrect tax forms from August-December 2012

Forecast

1.C.3.a

Packet Pg. 33

Att

ach

men

t: 1

1301

3 R

TD

MF

S (

1845

: N

ove

mb

er 2

013

Mo

nth

ly F

inan

cial

Sta

tus

Rep

ort

)

Regional Transportation District 1600 Blake Street

Denver, CO 80202-1399

303-299-2303

Board of Directors

Chair – Chuck Sisk, District 0 First Vice Chair – Larry Hoy, District J Second Vice Chair – Bill James, District A Secretary – Jeff Walker, District D Treasurer – Tom Tobiassen, District F Lorraine Anderson, District L Gary Lasater, District G

Kent Bagley, District H Judy Lubow, District I

Bruce Daly, District N Natalie Menten, District M

Barbara Deadwyler, District B Angie Rivera-Malpiede, District C

Dr. Claudia Folska, District E Paul Daniel Solano, District K

M I NUTES Financial Administration & Audit

Tuesday, January 14, 2014

Rooms R, T, & D

5:30 PM

Conference Dial-in # 303-299-2663

Conference ID: 15120

Financial Administration and Audit Committee

Chaired by Jeff Walker

A. Call to Order

Committee Chair Walker called the meeting to order at 5:30 p.m.

Attendee Name Title Status Arrived

Lorraine Anderson Chair of the Board Absent

Kent Bagley Director, District H Present 5:34 PM

Bruce Daly Director, District N Present 5:27 PM

Barbara Deadwyler Director, District B Present 5:23 PM

Claudia Folska Director, District E Present 5:13 PM

Larry Hoy Director, District J Present 5:29 PM

Bill James Director, District A Present 5:16 PM

Gary Lasater Vice Chair Present 5:28 PM

Judy Lubow Director, District I Present 5:29 PM

Natalie Menten Director, District M Present 5:29 PM

Angie Rivera-Malpiede Director, District C Present 5:16 PM

Chuck Sisk Director, District O Present 5:26 PM

Paul Solano Director, District K Present 5:11 PM

Tom Tobiassen Director, District F Present 5:04 PM

Jeff Walker Chair Present 4:56 PM

Staff Present: Bruce Abel, Larry Buter, Jessie Carter, Carolyn Conover, Sherry

Ellebracht, Heather Ellerbrock, David Genova, Terry Howerter, Austin

Jenkins, Erin Klaas, Nadine Lee, Marla Lien, Barbara McManus, Tony

McCaulay, Robin McIntosh, Jr., Doug MacLeod, Paula Perdue, Scott

Reed, Jannette Scarpino, Dean Shaklee, Cherie Sprague, Errol

Stevens, Walt Stringer, John Tarbert, Bill Van Meter, Dennis Yaklich

Others Present: Celina Benavidez, Terry Bright, Audrey DeBarros – 36 Commuting

Solutions, Cecelia Garcia, Doug Gragg, Elise Jones – Boulder County

Commissioner, Andrew Muckle – Mayor of Superior, Joe Triplett,

Leslie Thompson, Gary Van Dorn, Stephen Weinstein, Monte Whaley

Committee Chair Walker turned the meeting over to Marla Lien, General Counsel, for a

brief update. Marla Lien informed the Board that earlier in the day the Denver District

Court had a preliminary injunction hearing over the lawsuit to stop House Bill 1272, which

provided sales and use tax parity between the State and RTD. The plaintiff had requested

there be a preliminary injunction which was denied. This means that the Department of

Revenue will now be collecting taxes per the new legislation. Marla Lien stressed that this

was just a preliminary injunction hearing; there may still be discovery and a trial but the

judge will be trying to do this in an accelerated fashion.

B. Recommended Actions

• Resolution No. ____, Series of 2014 Appointment of Trustees to the RTD


Motion: Director Tobiassen made the motion to move

this item to the full Board at the January 21,

2014 Board meeting.

Director Rivera-Malpiede seconded the motion.

RESULT: PASSED COMMITTEE [UNANIMOUS]

MOVER: Tom Tobiassen, Director, District F

SECONDER: Angie Rivera-Malpiede, Director, District C

AYES: Bagley, Daly, Deadwyler, Folska, Hoy, James, Lasater, Lubow,

Menten, Rivera-Malpiede, Sisk, Solano, Tobiassen, Walker

ABSENT: Lorraine Anderson

Committee Chair walker declared the motion PASSED unanimously.

C. Updates

• Salaried Employee Defined Benefit Pension Plan Update (Howerter/Rael &

Letson)

Terry Howerter, Chief Financial Officer, reminded the Board that each year

they present an actuary report for the Salaried Employees’ Pension Trust.

He introduced Terry Bright of Rael and Letson, RTD’s Salaried Employees’

Pension Trust Actuaries and Benefit Consultants. He also recognized

Stephen Weinstein, RTD’s attorney representing the trust council.

Terry Bright reviewed a Power Point presentation with the Board that is

available in the January 14, 2014 Financial Administration and Audit

Committee Agenda Packet. He noted that if all actuarial assumptions are

met each year the plan will reach full funding in 2031.

Terry Howerter asked Doug MacLeod, Manager of Financial Reporting, to

explain how the Government Accounting Standards Board’s (GASB) new

standards will affect RTD.

Doug MacLeod stated that GASB issued pronouncement 68 (GASB 68)

which applies to RTD’s financial reporting in fiscal year 2015. He explained

that GASB 68 requires governmental agencies with defined benefit pension

plans to report pension liabilities differently than current requirements;

currently, GASB requires RTD to report in its financial statement a liability

for its net pension obligation (NPO). An NPO is simply the amount to date

that has not been funded to meet pension obligations and assumes that

future payments to the pension will make up for the current or future

shortfalls. Doug MacLeod stated that GASB 68 will require RTD to report

the unfunded actuarial accrued liability (UAAL) rather than the NPO. The

UAAL is the underfunded amount assuming the current payment and

investment returns continue and additional funds are not paid into the

pension to eliminate the shortfall.

Doug MacLeod explained that recording a liability in the financial statements

such as the UAAL has the effect of reducing the fund balance, which is the

amount of net assets available for RTD’s use. If RTD was to early adopt

that pronouncement in 2013 the current additional liability that we would

have to recognize is an additional $8.8 million dollars. Doug MacLeod noted

that this is a relatively small amount and staff believes RTD can absorb this

without a problem.

Director Folska asked what might be the origin of GASB 68. Doug MacLeod

stated that is has evolved from the fact that many defined benefits plans

have seen their UAALs increase at many cities, municipalities, etc. He

commented that the full liability owned was not shown under the old

standard so this was how the GASB is addressing the growing liabilities

being accurately reflected.

• Represented Employee Defined Benefit Pension Plan Update

(Howerter/Gabriel Roeder Smith)

Terry Howerter stated that staff wanted to review the RTD/ATU 1001

Pension Plan actuary report with the Board as pronouncements 67 and 68

will have some significant impacts on RTD’s financial reporting. He

introduced Leslie Thompson, Actuary from Gabriel Roder Smith & Company.

Leslie Thompson reviewed a Power Point presentation with the Board that is

available in the January 14, 2014 Financial Administration and Audit

Committee Agenda Packet. She stressed to the Board that Plan funding is in

peril; reforms have been enacted to reduce benefit accruals for new hires

and to improve the funding of the plan but projections are not enough to

ensure the plan will remain viable throughout the next 30 years.

Terry Howerter stated that RTD has an obligation to fund the pension plan at

the negotiated rates each year. He said that when RTD recognizes a

substantial liability for the unfunded portion of this plan RTD will wind up

with a deficit balance in our fund balance. Terry Howerter thinks this is an

accounting entry to recognize and comply with the GASB and auditor

requirements while the legal requirement is what RTD negotiated in the

collective bargaining agreement (CBA).

Director Hoy noted that while return on investments (ROI) of over 20% and

14% are impressive, it appears that there are different investment

strategies. Marla Lien explained that in each plan there are trustees. The

RTD Board of Directors appoints the trustees for the Salaried Pension Plan.

She said the Salaried Pension Trust hires investment advisors and firms to

invest the funds, and ultimately makes the investment decisions. Marla Lien

stated that the RTD/ATU Pension Trust has different trustees: three RTD

salaried members and three from the union. The RTD/ATU Pension Trust

hires its own, separate advisors and firms to invest funds. She said that this

Trust has made different choices over the years.

Director Folska asked for further information about Amendment 22 that was

referenced in the presentation. Marla Lien explained that Amendment 22

was adopted by the RTD/ATU Pension Trust that made changes for

participants hired on or after January 1, 2011.

Director Folska expressed concern having this unfunded liability on RTD’s

balance sheets. She wondered what impact this might have on RTD

receiving future funding. Terry Howerter stated that he does not believe this

will have a negative impact on RTD’s ability to get funding going forward.

Director Lubow stated that this is not a pretty picture even if RTD is not

legally responsible. She thinks this unfunded liability does not look very

good for RTD. Director Lubow expressed concern that this will create the

appearance of fiscal irresponsibility on the part of RTD despite the fact that

RTD is not legally responsible. Terry Howerter believes the appearance of

this is big. He said that through negotiations staff came up with a short

term fix for this plan and now staff and the union have to take a close look

at this to come up with a long term plan. Terry Howerter explained that part

of the reason the Salaried Employees Pension Plan looks so good is because

the trustees had the foresight to put in place a Defined Contribution plan for

any employees starting after January 1, 2008; this limits the liability on the

Defined Benefits plan.

Director Lubow wonders what other entities are doing if they are coming up

with similar funding shortages. Marla Lien noted that this is being seen in

California and Detroit; however, this is an area of law that is just starting to

develop.

Director Lubow asked if the Union employees are aware of the funding

situation. She also wonders if information is shared between the two trusts.

Terry Howerter stated that while a 14% ROI in a year is very good the Union

side does a different mix of investments. For example, they are not as

invested in real estate as the Salaried Side. He said that staff would pull

together the actuary reports to provide a year-over-year comparison.

Director Bagley commented that last year was an incredible year in the

market. He believes both plans would be lucky to get a 7% ROI this year.

Director Bagley stressed that last year’s returns cannot be expected all the

time.

Chair Sisk thanked Leslie Thompson for her presentation. He believes it was

very sobering. He said that one solution might be to allow people to retire

early. He wonders if this is something available to employees. Chair Sisk

asked that this be something staff considers.

Director Menten reminded the Board that she voted no for the Collective

Bargaining Agreement because she thought it was clear that there were

some red flags in the pension. She asked Director Daly, as a former member

of ATU, what the Board can do to help the Union employees understand

their position. Director Daly does not think there is a lot the Board can do as

this is part of the Collective Bargaining Agreement. He said that the

members are aware of the situation but are not quite ready for a defined

contribution plan.

Committee Chair Walker asked if staff anticipated any policy changes or

future employment trends with the new Federal Reserve Chair that might

affect RTD. He also wondered if it would affect RTD’s ability to bond.

Terry Howerter stated that on the Federal Transit Administration side they

look at RTD’s cash flows in and out, net revenue coverage, ability to fund,

operate and maintain projects, etc. He said that to them a balance sheet

accrual would not have an impact on what they focus on. Terry Howerter

does not anticipate this affecting our ability to bond at all.

• November 2013 Monthly Financial Status Report (Howerter/MacLeod)

Terry Howerter noted that everything in green in the dashboard. Doug

MacLeod reviewed the November Monthly Financial Status report with the

Board that is available in the January 14, 2014 Financial Administration and

Audit Committee Agenda Packet.

Director Folska asked if staff has any concerns over a security breach with

our Ticket Vending Machines (TVMs) now that we are accepting credit and

debit cards. She also wondered what the cost is to RTD for accepting credit

and debit cards. Terry Howerter stated that RTD does not keep any credit

or debit card information locally. All information goes directly to Wells Fargo

and the Clearing House. He said that the fees RTD charged vary based on a

number of factors so he would put together the information and send it to

the Board.

Director Folska also asked if her understanding that the subsidy for paying

for parking was higher than it is for subsidizing the EcoPass. Bruce Abel,

Assistant General Manager of Bus Operations, said he believes Director

Folska is referencing a tax free employer transportation benefit program. He

said that at certain times the tax free benefit for parking is higher than for a

transit pass. He stated that he would need to confirm but he believes with

the October 1st reauthorization the benefit for parking was increased.

Director Hoy asked for a reminder where the $5.6 million in the FasTracks

Internal Savings Account (FISA) came from. Doug MacLeod said this came

from a portion of the Civic Center Air Rights sale; $2.5 million was set aside

for the Northwest Area Mobility Study and the remainder put in the FISA.

D. Other Matters

Director Tobiassen shared with the Board that he assisted people getting on the

light rail at Nine Mile on Sunday for the Broncos Game. He commended staff for

the new TVM displays. Director Tobiassen through they were much easier to use,

see, etc. He thanked staff for the upgrades and hard work.

Bruce Abel shared with the Board that for last Sunday’s Bronco’s game in excess of

20k attendees used our service out of a 70k capacity stadium.

Director Menten asked if there had been any issues with RTD customers not being

able to use the lot next to the stadium that RTD is leasing from them. Bruce Abel

stated that he was not aware of any but would confirm.

E. Next Meeting Date - February 11, 2014

F. Adjourn

Committee Chair Walker adjourned the meeting at 6:30 p.m.

The following communication assistance is available for public meetings:

Language Interpreters

Sign-language Interpreters

Assisted listening devices

Please notify RTD of the communication assistance you require at least 48 business hours in advance of a

RTD meeting you wish to attend by calling 303.299.2307

THE CHAIR REQUESTS THAT ALL PAGERS AND CELL PHONES BE SILENCED DURING THE BOARD OF

DIRECTORS MEETING FOR THE REGIONAL TRANSPORTATION DISTRICT.

January 1, 2013 Valuation Highlights(the plan is in funding peril)

Ã Contributions are not sufficient to fund the liabilities

• Actuarial requirement is for 28.3%; 11.0% is scheduled for receipt

• Fund is projected to be fully depleted by 2032

Ã Actuarial Accrued Liability increased by $16.5M

• From $406.3M to $422.8M

Ã Actuarial Value of Assets decreased by $11.4M

• From $212.3M to $200.9M

• Market value increased from $194 M to $198 M

Ã Unfunded Actuarial Accrued Liability increased by $27.9M

• From $194.0M to $221.9M

• This raises the required contribution amount

• Scheduled contributions do not even cover the normal (annual) costs of the plan

2


Ã The normal cost is 13.15% of pay

• The scheduled contribution is 11% of pay

• New agreement does increase contributions over time

Ã Actuarially recommended contribution increased by $1.8M

• This ARC keeps increasing as payments are “missed”

Ã 47.5% funded on an actuarial basis

Ã Total active participant count decreased by 42

• From 1,720 to 1,678

• New hires will “bend down” the normal cost, so more funding can go to the unfunded accrued liability

3

History of the Funded Ratio

4

Valuation Date- January 1, Funded Ratio

2002 106.39%

2003 82.96

2004 91.09

2005 91.73

2006 89.06

2007 87.07

2008 86.03

2009 72.57

2010 73.08

2011 68.67

2012 52.24

2013 47.52

The 11% scheduled contribution amount was insufficient, starting in 2003

5

Plan Year Ended December 31,

Percentage of ARC contributed

2002 102.2%

2003 53.7

2004 60.9

2005 75.3

2006 64.2

2007 64.6

2008 67.8

2009 44.5

2010 59.0

2011 47.3

2012 33.5

2013 --


6

Ã Total ARC is 28.31% of payroll compared to the total scheduled contribution rate of 11.00% of payroll.

Ã Amendment #22 was adopted in 2010 with the following changes in effect for participants hired on or after January 1, 2011 (Tier 2):

• New benefit schedule listed in Section 6.01 of the Plan provisions

• Vesting is changed from 5 years to 10 years

• The benefit multiplier is changed from 2.5% to 1.0%

• Unreduced retirement is changed from age 55 with 20 years of service to age 60 with 20 years of service

• Early retirement reduction is changed from 5.0% from age 55 to 2.5% from age 60

• The maximum service included in the benefit calculation is reduced from 30 years to 25 years

• Sick and vacation payouts are no longer included in the pension benefit calculation

• Interest on employee contributions is changed from 5% to 3%


7

Ã On February 27, 2013, a tentative agreement was reached with the following schedule for contributions:

Year RTD Members Total

2013 12% 4% 16%

2014 12% 4% 16%

2015 13% 5% 18%

2016 13% 5% 18%

2017 13% 5% 18%


8

Ã If all actuarial assumptions are met each year, including a net investment return of 7.0% per year, and annual contributions equal those stated in the tentative agreement:

• Assets will be fully depleted by 2032

Ã Per the investment consultant, the estimated 2013 investments return is 14% • Incorporating this into the above projections, assets will be fully depleted by 2034

• To reach 100% funding by 2043, assets would need to earn over 14% per year through 2019

RTD/ATU Summary

Ã Reforms have been enacted to reduce benefit accruals for new hires and to improve the funding of the plan

Ã Projections (based on an assumed 7% return) are not enough to ensure the plan will remain viable throughout the next 30 years.

9

GASB 67/68

10

Ã GASB 67 (financial accounting for the Plan) is effective for the Plan’s Fiscal Year ending December 31, 2014

• We will roll forward the January 1, 2014 valuation results to December 31, 2014

• Under GASB standards, the long-term investment return assumption must be sufficient to pay projected benefits and the Plan’s assets must be invested using a strategy to achieve this investment return

• It is possible that the discount rate used to determine the liability for RTD’s balance sheet will be less than the 7% (creating a higher unfunded liability than what the valuation will show)

Ã GASB 68 (financial accounting for the Employer) is effective for RTD’s Fiscal Year ending December 31, 2015

• We will provide the applicable disclosure information for 2014 (GASB 27 or GASB 68) along with the GASB 67 information for the Plan in February 2015

RTD Pension Documents

Documents

Transcript of RTD Pension Documents