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Officers/trustees of local 1001 ATU and the pension trust fund.

3315 West 72nd Ave Westminster, CO 80030

January 28, 2014

Phone: 303-412-1001

Fax: 303-412-1597

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

Im 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 companys 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 Kent Bagley, District H Bruce Daly, District N Barbara Deadwyler, District B Dr. Claudia Folska, District E Gary Lasater, District G Judy Lubow, District I Natalie Menten, District M Angie Rivera-Malpiede, District C 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.

1.B.1

BOARD OF DIRECTORS REPORT


To: From: Date: Subject: Phillip A. Washington, General Manager Terry L. Howerter,Chief Financial Officer January 9, 2014 Resolution No. ____, Series of 2014 Appointment of Trustees to the RTD Pension Trust and Defined Contribution Plan Date: January 9, 2014 GM Board Meeting Date: January 14, 2014

Resolution RECOMMENDED ACTION

Prepared by: Paula Perdue, Executive Director

Approved by:

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1.B.1

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.

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1.B.1

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 Judy Lubow Tom Tobiassen Scott Reed Marla Lien Sylvia Francis Lou Ha Terry Howerter, CFO Term Expiration Date 12/31/2016 12/31/2014 12/31/2015 12/31/2014 12/31/2014 12/31/2015 Permanent Member

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1.C.1

BOARD OF DIRECTORS REPORT


To: From: Date: Subject: Phillip A. Washington, General Manager Terry L. Howerter, Chief Financial Officer January 9, 2014 Salaried Employee Defined Benefit Pension Plan Update (Howerter/Rael & Letson) Date: January 9, 2014 GM Board Meeting Date: January 14, 2014

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

Prepared by: Terry Howerter, Chief Financial Officer Approved by:

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RTD Salaried Employees Pension Trust

Fund Status as of January 1, 2013

January 14, 2014 RAEL & LETSON


Actuaries & Benefit Consultants
Attachment: RTD Board Presentation 1-2014_Salaried Employees' Pension Trust (1842 : Salaried Employee Defined Benefit Pension Plan 1.C.1.a

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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

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

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

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 Plans size and nature, future investment returns have a significant impact on projected liabilities we will keep the Board apprised of the impact of the Plans investment performance on future costs

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

GASB 67/68
GASB 67 (financial accounting for the Plan) is effective for the Plans 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 Plans assets must be invested using a strategy to achieve this investment return
Based on the Plans projections and new funding policy, the Plans assumed net investment return of 7.5% satisfies the new GASB standards

GASB 68 (financial accounting for the Employer) is effective for RTDs 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
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Attachment: RTD Board Presentation 1-2014_Salaried Employees' Pension Trust (1842 : Salaried Employee Defined Benefit Pension Plan

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

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

1.C.2

BOARD OF DIRECTORS REPORT


To: From: Date: Subject: Phillip A. Washington, General Manager Terry L. Howerter, Chief Financial Officer January 9, 2014 Represented Employee Defined Benefit Pension Plan Update (Howerter/Gabriel Roeder Smith) Date: January 9, 2014 GM Board Meeting Date: January 14, 2014

ATTACHMENTS: ATU_RTD Board Presentation (PDF)

Prepared by: Terry Howerter, Chief Financial Officer Approved by:

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1.C.2.a

RTD/ATU 1001 Pension Plan January 14, 2014


Pension Fund Status As of January 1, 2013

Copyright 2014 GRS All rights reserved.

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.2.a

January 1, 2013 Valuation Highlights


(the plan is in funding peril)
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

Actuarial Accrued Liability increased by $16.5M


From $406.3M to $422.8M

Actuarial Value of Assets decreased by $11.4M


From $212.3M to $200.9M Market value increased from $194 M to $198 M

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

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.2.a

January 1, 2013 Valuation Highlights


The normal cost is 13.15% of pay
The scheduled contribution is 11% of pay New agreement does increase contributions over time

Actuarially recommended contribution increased by $1.8M


This ARC keeps increasing as payments are missed

47.5% funded on an actuarial basis 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

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.2.a

History of the Funded Ratio


Valuation Date- January 1, 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Funded Ratio 106.39% 82.96 91.09 91.73 89.06 87.07 86.03 72.57 73.08 68.67 52.24 47.52

Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.2.a

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


Plan Year Ended December 31, 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Percentage of ARC contributed 102.2% 53.7 60.9 75.3 64.2 64.6 67.8 44.5 59.0 47.3 33.5 --

Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.2.a

rate of 11.00% of payroll. 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%

Total ARC is 28.31% of payroll compared to the total scheduled contribution

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

Long-Term Funding-Reforms to improve the plan

1.C.2.a

On February 27, 2013, a tentative agreement was reached with the following

schedule for contributions:

Year
2013 2014 2015 2016 2017

RTD
12% 12% 13% 13% 13%

Members
4% 4% 5% 5% 5%

Total
16% 16% 18% 18% 18%

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

Long-Term Funding-Reforms to improve the plan

1.C.2.a

Long-Term Funding (Continued)


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

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

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.2.a

RTD/ATU Summary
Reforms have been enacted to reduce benefit accruals for new hires and to

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

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.2.a

GASB 67/68
GASB 67 (financial accounting for the Plan) is effective for the Plans Fiscal

Year ending December 31, 2014

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

pay projected benefits and the Plans 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 RTDs balance sheet will be less than the 7% (creating a higher unfunded liability than what the valuation will show)

Under GASB standards, the long-term investment return assumption must be sufficient to

GASB 68 (financial accounting for the Employer) is effective for RTDs

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

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Attachment: ATU_RTD Board Presentation (1843 : Represented Employee Defined Benefit Pension Plan

1.C.3

BOARD OF DIRECTORS REPORT


To: From: Date: Subject: Phillip A. Washington, General Manager Terry L. Howerter, Chief Financial Officer January 9, 2014 November 2013 Monthly Report (Howerter/MacLeod) Financial Status Date: January 9, 2014 GM Board Meeting Date: January 14, 2014

ATTACHMENTS: 113013 RTD MFS (PDF)

Prepared by: Doug MacLeod, Manager Approved by:

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1.C.3.a

BOARD OF DIRECTORS REPORT


To: Phillip A. Washington, General Manager From: Terry L. Howerter, Chief Financial Officer Date: January 8, 2014 Subject: November 2013 Monthly Financial Status Report Board Meeting Date: ACTION DISCUSSION INFO X Date: January 14, 2014

DASHBOARD (in Thousands) Current Month vs. Prior Year Month


Sales & Use Tax

Ridership

Fare Revenue

2.9% 239

1.0% $92
Fare Revenue

8.5% $3,070
Sales && Use Tax Sales Use Tax
Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report) Packet Pg. 25

Year-to-Date vs. Prior Year-toDate

Ridership Ridership

2.0% 1,828

4.5% $4,691

4.3% $17,508

RIDERSHIP (in Thousands)


Actual vs. Prior Year Month Bus West Line Light Rail Revenue Service Boardings Mall Shuttle Other Month System-Wide Boardings Year-to-Date Bus West Line Light Rail Revenue Service Boardings Mall Shuttle Other Year-to-Date System-Wide Boardings Actual vs. Budget Month Year-to-Date
9.7

2013 Actual 5,258 368 1,537 7,163 1,104 93 8,360 58,238 2,597 18,738 79,573 12,975 1,044 93,592 2013 Actual 8,360 93,592

2012 Actual 5,324 1,656 6,980 1,045 96 8,121 58,897 19,170 78,067 12,624 1,074 91,765 2013 Budget 8,389 94,112

Variance (66) 368 (119) 183 59 (3) 239 (659) 2,597 (432) 1,506 352 (30) 1,828 Variance (29) (520)

% Variance -1.2% -7.2% 2.6% 5.6% -3.1% 2.9% -1.1% -2.3% 1.9% 2.8% -2.8% 2.0% % Variance -0.3% -0.6%

9.2 2013 Actual 8.7 (Millions)

2013 Amended Budget

8.2 2012 Actual 7.7

7.2

2013 Actual

2013 Amended Budget

2012 Actual

* 2012 had one more day due to Leap Year ** The West Line began it's first full month of revenue service in May 2013

1.C.3.a

FARE REVENUE (in Thousands)


Actual vs. Prior Year Month Year-to-Date Actual vs. Budget Month Year-to-Date
$11.5 $11.0 2013 Amended Budget $10.5 $10.0 $9.5 2012 Actual $9.0 $8.5 $8.0 2013 Actual

2013 Actual $ 9,156 108,574 2013 Actual $ 9,156 108,574

2012 Actual $ 9,064 103,883 2013 Budget $ 9,708 109,611

Variance $ 92 4,691

% Variance 1.0% 4.5% % Variance -5.7% -0.9%

Variance $ (552) (1,037)

(Millions)

2013 Actual

2013 Amended Budget

2012 Actual

SALES & USE TAXES (in Thousands)


Actual vs. Prior Year Month Year-to-Date Actual vs. Budget Month Year-to-Date
$48.0 $46.0 $44.0 $42.0 (Millions) $40.0 $38.0 $36.0 $34.0 $32.0 2012 Actual 2013 Actual 2013 Amended Budget

2013 Actual $ 39,065 423,053 2013 Actual $ 39,065 423,053

2012 Actual $ 35,995 405,545 2013 Budget $ 37,520 420,290

Variance $ 3,070 17,508 Variance $ 1,545 2,763

% Variance 8.5% 4.3% % Variance 4.1% 0.7%

2013 Actual

2013 Amended Budget

2012 Actual

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

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

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Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report)

1.C.3.a

REGIONAL TRANSPORTATION DISTRICT STATEMENT OF POSITION


As of November 30, 2013 (In Thousands) (UNAUDITED)
2013 Base System 2013 FasTracks Project 2013 FasTracks Ops 2013 Combined December 31, 2012 Combined

Change

ASSETS
CURRENT ASSETS:
Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report)

Cash & Cash Equivalents Cash Reserved for Eagle P3 Payment Receivables: Sales Taxes Grants Other (less allowance for doubtful accts) Total Net Receivables Inventory Prepaid Expenses Restricted Debt Service/Project Funds Other Assets TOTAL CURRENT ASSETS NONCURRENT ASSETS: Capital Assets: Land Land Improvements Buildings Revenue Earning Equipment Shop, Maintenance & Other Equipment Construction in Progress Total Capital Assets Accumulated Depreciation Net Capital Assets TABOR Reserves Restricted Debt Service/Debt Service Reserves Deposits Other TOTAL NONCURRENT ASSETS TOTAL ASSETS

138,036 47,084 5,902 7,727 60,713 31,207 3,726 213,437 2,483 449,602

175,811 18,264 31,389 7,283 7,942 46,614 59,647 597,145 2,553 900,034

3,930 3,930

317,777 18,264 78,473 13,185 15,669 107,327 31,207 63,373 810,582 5,036 1,353,566

292,839 144,344 80,237 114,224 14,551 209,012 30,369 72,880 753,502 6,726 1,509,672

24,938 (126,080) (1) (1,764) (101,039) (2) 1,118 (101,685) 838 (9,507) 57,080 (3) (1,690) (156,106)

175,428 1,285,752 248,049 559,877 109,235 123,292 2,501,633 (1,141,256) 1,360,377 11,050 27,140 1,500 3,239 1,403,306 $ 1,852,908 $

24,289 631,201 9,399 258,718 2,759 2,449,903 3,376,269 (70,045) 3,306,224 6,193 27,702 82,032 3,422,151 4,322,185 $

3,930 $

199,717 1,916,953 257,448 818,595 111,994 2,573,195 5,877,902 (1,211,301) 4,666,601 17,243 54,842 1,500 85,271 4,825,457 6,179,023 $

189,910 1,366,950 257,852 785,534 105,286 2,458,498 5,164,030 (1,108,184) 4,055,846 17,566 78,013 1,500 87,784 4,240,709 5,750,381 $

9,807 550,003 (404) 33,061 6,708 114,697 713,872 (103,117) 610,755 (323) (23,171) (4) (2,513) 584,748 428,642

(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

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1.C.3.a

REGIONAL TRANSPORTATION DISTRICT STATEMENT OF POSITION


As of November 30, 2013 (In Thousands) (UNAUDITED)
2013 Base System 2013 FasTracks Project 2013 FasTracks Ops 2013 Combined December 31, 2012 Combined

Change

LIABILITIES
CURRENT LIABILITIES: Accounts & Contracts Payable Current Portion of Long Term Debt Accrued Compensation Accrued Interest Payable Other TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES: Long Term Debt Other Long-Term Liabilities Net Pension Obligation TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES $ $ 80,946 45,720 18,664 10,544 14,969 170,843 $ 69,846 8,137 17,280 7 95,270 $ 450 450 $ 151,242 53,857 18,664 27,824 14,976 266,563 $ 278,317 46,575 17,537 17,042 23,511 382,982 $ (127,075) (5) 7,282 1,127 10,782 (8,535) (116,419)
Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report)

566,473 50,899 617,372 788,215 $

2,063,043 120,819 2,183,862 2,279,132 $

450 $

2,629,516 120,819 50,899 2,801,234 3,067,797 $

2,376,966 120,819 50,899 2,548,684 2,931,666 $

252,550 252,550 136,131

(6)

NET POSITION
Invested in Capital Assets, Net of Related Debt TABOR Fund Debt Service Reserves Other Restricted Assets FasTracks Contingency Fund FasTracks Construction Fund FasTracks Internal Savings Account (FISA) Operating Reserve Board Appropriated Fund Capital Replacement Fund Unrestricted Fund Balance TOTAL NET POSITION TOTAL LIABILITIES & NET POSITION
(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)

940,502 12,262 48,257 7,223 5,563 16,200 9,000 25,686 1,064,693 1,852,908 -

1,813,909 6,042 45,982 84,585 30,000 48,449 4,695 4,695 4,695 2,043,052 4,322,185 -

1,160 1,160 1,160 3,480 3,930 -

2,754,411 18,304 94,239 91,808 30,000 48,449 5,563 22,055 14,855 31,541 3,111,225 6,179,023 -

2,348,683 17,391 115,136 96,011 30,000 161,832 5,614 13,200 6,000 24,848 2,818,715 5,750,381 -

405,728 913 (20,897) (4,203) (113,383) (7) 5,563 (8) (5,614) 8,855 8,855 6,693 292,510 428,642

$ $

$ $

$ $

$ $

$ $

$ $

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REGIONAL TRANSPORTATION DISTRICT - COMBINED STATEMENT OF REVENUE, EXPENSES AND CHANGE IN NET POSITION
November 30, 2013 (In Thousands) (UNAUDITED)
Month Combined Actual ----------------OPERATING REVENUE: Passenger Fares Advertising, Rent and Other Total Operating Revenue OPERATING EXPENSES Bus Operations Rail Operations Planning Capital Programs Safety, Security and Facilities General Counsel Finance and Administration Communications Executive Office Board Office Other Non-Departmental Expenditures FasTracks Service Increase Depreciation Total Operating Expenses OPERATING INCOME/(LOSS) NONOPERATING REVENUE (EXPENSES) Sales & Use Tax Operating Grants Investment Income Other Income Gain/(Loss) Capital Assets Interest Expense Net Nonoperating Revenue (Expense) INCOME BEFORE CAPITAL GRANTS Capital Grants and Local Contributions INCREASE/(DECREASE) IN NET POSITION
(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

Month Combined Budget ----------------$ 9,708 476 10,184 23,174 4,391 394 2,368 7,934 698 2,799 826 407 74 (412) 248 9,295 52,196 (42,012)

Fav/ (Unfav) ----------------$ (552) (55) (607) (57) 895 34 (1,366) 4,064 (4) (44) (142) 191 1 1,397 218 (241) 4,946 4,339

% Fav/ (Unfav) -------------5.7% -11.6% 0.0% -6.0% -0.2% 20.4% 8.6% -57.7% 51.2% -0.6% -1.6% -17.2% 46.9% 1.4% -339.1% 87.9% -2.6% 0.0% 9.5% -10.3%

YTD Combined Actual ----------------$ 108,574 4,698 113,272 245,926 38,936 3,808 16,054 38,062 7,637 27,571 9,640 3,796 673 361 4,027 104,633 501,124 (387,852)

YTD Combined Budget ----------------$ 109,611 4,947 114,558 250,382 47,467 5,014 15,921 48,535 7,855 32,624 10,261 4,165 902 173 4,308 101,298 528,905 (414,347)

Fav/ (Unfav) ----------------$ (1,037) (249) (1,286) 4,456 8,531 1,206 (133) 10,473 218 5,053 621 369 229 (188) 281 (3,335) 27,781 26,495

% Fav/ (Unfav) -------------0.9% -5.0% 0.0%


Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report) Packet Pg. 29

9,156 421 9,577 23,231 3,496 360 3,734 3,870 702 2,843 968 216 73 (1,809) 30 9,536 47,250 (37,673)

-1.1% 1.8% 18.0% 24.1% -0.8% 21.6% 2.8% 15.5% 6.1% 8.9% 25.4% -108.7% 6.5% -3.3% 0.0% 5.3% 6.4%
(1) (2) (3) (4) (5) (6) (7)

39,065 7,608 560 813 (77) (5,895) 42,074 4,401 15,639 $ 20,040 $

37,520 9,568 276 147 (7,270) 40,241 (1,771) 41,250 39,479 $

1,545 (1,960) 284 666 (77) 1,375 1,833 6,172 (25,611) (19,439)

4.1% -20.5% 102.9% 453.1% 0.0% -18.9% 0.0% 4.6% -348.5% -62.1% -49.2% $

423,053 78,457 2,773 15,072 (53) (62,640) 456,662 68,810 225,898 294,708 $

420,290 99,251 2,889 11,493 (65,228) 468,695 54,348 264,500 318,848 $

2,763 (20,794) (116) 3,579 (53) 2,588 (12,033) 14,462 (38,602) (24,140)

0.7% -21.0% -4.0% 31.1% 0.0% 4.0% 0.0% -2.6% 26.6% -14.6% -7.6%

1.C.3.a

REGIONAL TRANSPORTATION DISTRICT - BASE SYSTEM STATEMENT OF REVENUE, EXPENSES AND CHANGE IN NET POSITION
November 30, 2013 (In Thousands) (UNAUDITED)
Month Base System Actual ----------------OPERATING REVENUE: Passenger Fares Advertising, Rent and Other Total Operating Revenue OPERATING EXPENSES Bus Operations Rail Operations Planning Capital Programs Safety, Security and Facilities General Counsel Finance and Administration Communications Executive Office Board Office Other Non-Departmental Expenditures FasTracks Service Increase Depreciation Total Operating Expenses OPERATING INCOME/(LOSS) NONOPERATING REVENUE (EXPENSES) Sales & Use Tax Operating Grants Investment Income Other Income Gain/(Loss) Capital Assets Interest Expense Net Nonoperating Revenue (Expense) INCOME BEFORE CAPITAL GRANTS Capital Grants and Local Contributions INCREASE/(DECREASE) IN NET POSITION $ 23,439 4,303 139 114 (77) (1,722) 26,196 (2,385) 4,055 1,670 $ 22,512 8,126 100 127 (1,779) 29,086 (6,591) 6,203 (388) $ 927 (3,823) 39 (13) (77) 57 (2,890) 4,206 (2,148) 2,058 4.1% -47.0% 39.0% -10.2% 0.0% -3.2% 0.0% -9.9% -63.8% -34.6% -530.4% $ 253,832 75,318 655 10,056 (53) (19,289) 320,519 1,466 8,881 10,347 $ 252,174 91,077 802 9,484 (16,418) 337,119 (14,809) 35,151 20,342 $ 1,658 (15,759) (147) 572 (53) (2,871) (16,600) 16,275 (26,270) (9,995) 0.7% -17.3% -18.3% 6.0% 0.0% -17.5% 0.0% -4.9% 109.9% -74.7% -49.1% $ 8,842 421 9,263 23,231 2,600 313 353 3,512 702 2,776 845 216 73 (1,815) (1,253) 6,291 37,844 (28,581) $ 9,314 476 9,790 23,174 3,474 344 1,412 7,582 698 2,730 784 407 74 (413) (1,097) 6,298 45,467 (35,677) $ (472) (55) (527) (57) 874 31 1,059 4,070 (4) (46) (61) 191 1 1,402 156 7 7,623 7,096 -5.1% -11.6% 0.0% -5.4% -0.2% 25.2% 9.0% 75.0% 53.7% -0.6% -1.7% -7.8% 46.9% 1.4% -339.5% -14.2% 0.1% 0.0% 16.8% -19.9% $ 106,176 4,698 110,874 245,926 30,637 3,313 3,769 34,913 7,637 26,953 8,296 3,796 673 355 (10,708) 74,367 429,927 (319,053) $ 106,772 4,947 111,719 250,382 39,058 4,551 7,167 45,374 7,855 31,920 9,053 4,165 902 174 (10,489) 73,535 463,647 (351,928) $ (596) (249) (845) 4,456 8,421 1,238 3,398 10,461 218 4,967 757 369 229 (181) 219 (832) 33,720 32,875 -0.6% -5.0% 0.0%
Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report) Packet Pg. 30

Month Base System Budget -----------------

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% Fav/ (Unfav) -------------

YTD Base System Actual -----------------

YTD Base System Budget -----------------

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% Fav/ (Unfav) -------------

-0.8% 1.8% 21.6% 27.2% 47.4% 23.1% 2.8% 15.6% 8.4% 8.9% 25.4% -104.0% -2.1% -1.1% 0.0% 7.3% 9.3%

1.C.3.a

REGIONAL TRANSPORTATION DISTRICT - FASTRACKS PROJECT STATEMENT OF REVENUE, EXPENSES AND CHANGE IN NET POSITION
November 30, 2013 (In Thousands) (UNAUDITED)
Month FasTracks Project Actual ----------------OPERATING REVENUE: Passenger Fares Advertising, Rent and Other Total Operating Revenue OPERATING EXPENSES Bus Operations Rail Operations Planning Capital Programs Safety, Security and Facilities General Counsel Finance and Administration Communications Executive Office Board Office Other Non-Departmental Expenditures FasTracks Service Increase Depreciation Total Operating Expenses OPERATING INCOME/(LOSS) NONOPERATING REVENUE (EXPENSES) Sales & Use Tax Operating Grants Investment Income Other Income Gain/(Loss) Capital Assets Interest Expense Net Nonoperating Revenue (Expense) INCOME BEFORE CAPITAL GRANTS Capital Grants and Local Contributions INCREASE/(DECREASE) IN NET POSITION $ 14,611 3,305 421 699 (4,173) 14,863 6,786 11,584 18,370 $ 13,993 1,442 176 20 (5,491) 10,140 4,753 35,047 39,800 $ 618 1,863 245 679 1,318 4,723 2,033 (23,463) (21,430) 4.4% 129.2% 139.2% 3395.0% 0.0% -24.0% 0.0% 46.6% 42.8% -66.9% -53.8% $ 150,551 3,139 2,118 5,016 (43,351) 117,473 59,073 217,017 276,090 $ 149,446 8,174 2,087 2,009 (48,810) 112,906 60,463 229,349 289,812 $ 1,105 (5,035) 31 3,007 5,459 4,567 (1,390) (12,332) (13,722) 0.7% -61.6% 1.5% 149.7% 0.0% -11.2% 0.0% 4.0% -2.3% -5.4% -4.7% $ 1 47 3,306 67 122 6 1,283 3,245 8,077 (8,077) $ 50 883 69 42 1 1,345 2,997 5,387 (5,387) $ (1) 3 (2,423) 2 (80) (5) 62 (248) (2,690) (2,690) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 6.0% -274.4% 0.0% 0.0% 2.9% -190.5% 0.0% 0.0% -500.0% 4.6% -8.3% 0.0% -49.9% 49.9% $ 4 495 11,745 618 530 7 14,735 30,266 58,400 (58,400) $ 3 463 8,243 704 470 14,797 27,763 52,443 (52,443) $ (1) (32) (3,502) 86 (60) (7) 62 (2,503) (5,957) (5,957) 0.0% 0.0% 0.0% 0.0% 0.0% -33.3% -6.9% -42.5% 0.0% 0.0% 12.2% -12.8% 0.0% 0.0% 0.0% 0.4% -9.0% 0.0% -11.4% 11.4% Month FasTracks Project Budget ----------------YTD FasTracks Project Actual ----------------YTD FasTracks Project Budget -----------------

Fav/ (Unfav) -----------------

% Fav/ (Unfav) -------------

Fav/ (Unfav) -----------------

% Fav/ (Unfav) -------------

Packet Pg. 31

Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report)

1.C.3.a

REGIONAL TRANSPORTATION DISTRICT - FASTRACKS OPERATIONS STATEMENT OF REVENUE, EXPENSES AND CHANGE IN NET POSITION
November 30, 2013 (In Thousands) (UNAUDITED)
Month FasTracks Ops Actual ----------------OPERATING REVENUE: Passenger Fares Advertising, Rent and Other Total Operating Revenue OPERATING EXPENSES Bus Operations Rail Operations Planning Capital Programs Safety, Security and Facilities General Counsel Finance and Administration Communications Executive Office Board Office Other Non-Departmental Expenditures Depreciation Total Operating Expenses OPERATING INCOME/(LOSS) NONOPERATING REVENUE (EXPENSES) Sales & Use Tax Operating Grants Investment Income Other Income Gain/(Loss) Capital Assets Interest Expense Net Nonoperating Revenue (Expense) INCOME BEFORE CAPITAL GRANTS Capital Grants and Local Contributions INCREASE/(DECREASE) IN NET POSITION $ 1,015 1,015 $ 1,015 1,015 67 67 $ (67) (67) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -100.0% 0.0% -100.0% $ 18,670 18,670 8,271 8,271 $ 18,670 18,670 8,694 8,694 $ (423) (423) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -4.9% 0.0% -4.9% $ 314 314 895 75 358 1 1,329 (1,015) $ 394 394 917 73 352 1,342 (948) $ (80) (80) 22 (2) (6) (1) 13 (67) -20.3% 0.0% 0.0% -20.3% 0.0% 2.4% 0.0% -2.7% -1.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.0% -21.3% $ 2,398 2,398 8,295 540 3,149 814 (1) 12,797 (10,399) $ 2,839 2,839 8,406 511 3,161 738 (1) 12,815 (9,976) $ (441) (441) 111 (29) 12 (76) 18 (423) -15.5% 0.0% 0.0%
Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report) Packet Pg. 32

Month FasTracks Ops Budget -----------------

Fav/ (Unfav) -----------------

% Fav/ (Unfav) -------------

YTD FasTracks Ops Actual -----------------

YTD FasTracks Ops Budget -----------------

Fav/ (Unfav) -----------------

% Fav/ (Unfav) -------------

-15.5% 0.0% 1.3% 0.0% -5.7% 0.4% 0.0% 0.0% -10.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% -15.7%

1.C.3.a

REGIONAL TRANSPORTATION DISTRICT SYSTEM 1% SALES & USE TAX INCLUDING VENDOR ALLOWANCE FISCAL YEARS 2012 AND 2013
Actual Sales Tax Collections Use Tax Collections Vendor Allowance Less Cost of Collections Fee Plus Interest Earned Net Sales & Use Tax Received Favorable/(Unfavorable) to Prior Year Percent of Increase/(Decrease) Percent of Increase Year to Date January 2012 $ 29,967,067 3,166,944 364,430 (39,560) 21,999 $ 33,480,880 $ 3,276,993 10.8% 10.8% February 2012 $ 29,337,195 3,200,609 357,872 (39,560) 19,635 $ 32,875,751 $ 2,562,924 8.5% 9.7% March 2012 $ 33,109,532 3,612,354 403,889 (39,560) 22,164 $ 37,108,379 $ 1,605,410 4.5% 7.8% April 2012 $ 32,850,700 3,577,804 400,665 (39,560) 19,700 $ 36,809,309 $ 2,895,524 8.5% 8.0% May 2012 $ 33,941,600 3,414,995 415,493 (39,560) 17,671 $ 37,750,199 $ 3,388,016 9.9% 8.4% June 2012 $ 35,440,481 4,277,167 441,753 (41,009) 15,824 $ 40,134,216 $ 3,058,507 8.2% 8.3% July 2012 $ 33,626,601 2,914,549 406,423 (41,009) 19,695 $ 36,926,260 $ 2,751,961 8.1% 8.3% August 2012 $ 34,457,627 3,460,487 421,738 (41,009) 16,666 $ 38,315,509 $ 2,024,736 5.6% 7.9% September 2012 $ 35,055,538 3,359,396 427,264 (41,009) 17,902 $ 38,819,091 $ 3,651,913 10.4% 8.2% October 2012 $ 33,775,579 3,166,066 410,878 (41,009) 18,713 $ 37,330,227 $ 3,514,206 10.4% 8.4% November 2012 $ 32,468,514 3,154,698 396,214 (41,009) 16,454 $ 35,994,871 $ 1,785,281 5.2% 8.1% December 2012 $ 39,201,688 4,576,358 486,915 (41,009) 18,457 $ 44,242,409 $ 4,091,223 10.2% 8.3% Total Year To Date $ 403,232,122 41,881,427 4,933,534 (484,863) 224,881 $ 449,787,100 $ 34,606,693
Attachment: 113013 RTD MFS (1845 : November 2013 Monthly Financial Status Report)

Actual Sales Tax Collections Use Tax Collections Vendor Allowance Less Cost of Collections Fee Plus Interest Earned Net Sales & Use Tax Received Favorable/(Unfavorable) to Prior Year Percent of Increase/(Decrease) Percent of Increase Year to Date

January 2013 $ 30,967,664 3,092,679 378,831 (41,009) 17,402 $ 34,415,567 $ 934,687 2.8% 2.8%

February 2013 $ 30,054,786 3,036,477 334,280 (41,009) 12,199 $ 33,396,732 $ 520,981 1.6% 2.2%

March 2013 $ 33,753,289 3,515,962 414,522 (41,009) 15,198 $ 37,657,962 $ 549,583 1.5% 1.9%

April 2013 $ 33,017,575 3,116,175 401,892 (41,009) 13,168 $ 36,507,802 $ (301,507) -0.8% 1.2%

May 2013 $ 36,581,877 3,139,815 441,798 (41,817) 14,375 $ 40,136,048 $ 2,385,849 6.3% 2.3%

June 2013 $ 37,725,868 3,701,092 460,764 (41,817) 16,943 $ 41,862,850 $ 1,728,634 4.3% 2.7%

July 2013 $ 36,278,676 3,192,961 439,017 (41,817) 17,803 $ 39,886,640 $ 2,960,380 8.0% 3.4%

August 2013 $ 37,097,288 3,065,134 446,700 (41,817) 16,927 $ 40,584,232 $ 2,268,723 5.9% 3.8%

September 2013 $ 36,136,177 3,579,510 441,731 (41,817) 17,009 $ 40,132,610 $ 1,313,519 3.4% 3.7%

October 2013 $ 35,583,841 3,415,646 433,766 (41,817) 16,912 $ 39,408,348 $ 2,078,121 5.6% 3.9%

November 2013 $ 35,626,798 3,033,075 429,988 (41,817) 16,940 $ 39,064,984 $ 3,070,113 8.5% 4.3% $

December 2013 0.0% 0.0%

Total Year To Date $ 382,823,839 35,888,526 4,623,289 (456,755) 174,876 $ 423,053,775 $ 17,509,083

$ $

Actual
Actual Plus CU-Leeds Forecast Sales Tax Collections Use Tax Collections Vendor Allowance Less Cost of Collections Fee Plus Interest Earned Net Sales & Use Tax Received Favorable/(Unfavorable) to Prior Year Percent of Increase/(Decrease) Percent of Increase Year to Date January 2013 $ 30,967,664 3,092,679 378,831 (41,009) 17,402 $ 34,415,567 $ 934,687 2.8% 2.8% February 2013 $ 30,054,786 3,036,477 334,280 (41,009) 12,199 $ 33,396,732 $ 520,981 1.6% 2.2% March 2013 $ 33,753,289 3,515,962 414,522 (41,009) 15,198 $ 37,657,962 $ 549,583 1.5% 1.9% April 2013 $ 33,017,575 3,116,175 401,892 (41,009) 13,168 $ 36,507,802 $ (301,507) -0.8% 1.2% May 2013 $ 36,581,877 3,139,815 441,798 (41,817) 14,375 $ 40,136,048 $ 2,385,849 6.3% 2.3% June 2013 $ 37,725,868 3,701,092 460,764 (41,817) 16,943 $ 41,862,850 $ 1,728,634 4.3% 2.7% July 2013

Forecast
August 2013 $ 37,097,288 3,065,134 446,700 (41,817) 16,927 $ 40,584,232 $ 2,268,723 5.9% 3.8% September 2013 $ 36,136,177 3,579,510 441,731 (41,817) 17,009 $ 40,132,610 $ 1,313,519 3.4% 3.7% October 2013 $ 35,583,841 3,415,646 433,766 (41,817) 16,912 $ 39,408,348 $ 2,078,121 5.6% 3.9% November 2013 $ 35,626,798 3,033,075 429,988 (41,817) 16,940 $ 39,064,984 $ 3,070,113 8.5% 4.3% December 2013 $ 40,948,294 4,797,889 510,225 (41,817) 23,192 $ 46,237,783 $ 1,995,374 4.5% 4.3% Total Year To Date $ 423,772,133 40,686,415 5,133,514 (498,572) 198,068 $ 469,291,558 $ 19,504,457

$ 36,278,676 3,192,961 439,017 (41,817) 17,803 $ 39,886,640 $ 2,960,380 8.0% 3.4%

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

Packet Pg. 33

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 Kent Bagley, District H Bruce Daly, District N Barbara Deadwyler, District B Dr. Claudia Folska, District E Gary Lasater, District G Judy Lubow, District I Natalie Menten, District M Angie Rivera-Malpiede, District C Paul Daniel Solano, District K

MINUTES
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 Lorraine Anderson Kent Bagley Bruce Daly Barbara Deadwyler Claudia Folska Larry Hoy Bill James Gary Lasater Judy Lubow Natalie Menten Angie Rivera-Malpiede Chuck Sisk Paul Solano Chair of the Board Director, District H Director, District N Director, District B Director, District E Director, District J Director, District A Vice Chair Director, District I Director, District M Director, District C Director, District O Director, District K Absent Present Present Present Present Present Present Present Present Present Present Present Present Arrived 5:34 PM 5:27 PM 5:23 PM 5:13 PM 5:29 PM 5:16 PM 5:28 PM 5:29 PM 5:29 PM 5:16 PM 5:26 PM 5:11 PM

Tom Tobiassen Jeff Walker Staff Present:

Director, District F Chair

Present Present

5:04 PM 4:56 PM

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 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

Others Present:

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 Pension Trust and Defined Contribution Plan 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, RTDs Salaried Employees Pension Trust Actuaries and Benefit Consultants. He also recognized Stephen Weinstein, RTDs 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 Boards (GASB) new standards will affect RTD. Doug MacLeod stated that GASB issued pronouncement 68 (GASB 68) which applies to RTDs 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 RTDs 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 RTDs 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 RTDs 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 RTDs 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 years 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 RTDs ability to bond. Terry Howerter stated that on the Federal Transit Administration side they look at RTDs 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 Sundays Broncos 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.

RTD/ATU 1001 Pension Plan January 14, 2014


Pension Fund Status As of January 1, 2013

Copyright 2014 GRS All rights reserved.

January 1, 2013 Valuation Highlights


(the plan is in funding peril)
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

Actuarial Accrued Liability increased by $16.5M


From $406.3M to $422.8M

Actuarial Value of Assets decreased by $11.4M


From $212.3M to $200.9M Market value increased from $194 M to $198 M

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

January 1, 2013 Valuation Highlights


The normal cost is 13.15% of pay
The scheduled contribution is 11% of pay New agreement does increase contributions over time

Actuarially recommended contribution increased by $1.8M


This ARC keeps increasing as payments are missed

47.5% funded on an actuarial basis 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

History of the Funded Ratio


Valuation Date- January 1, 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Funded Ratio 106.39% 82.96 91.09 91.73 89.06 87.07 86.03 72.57 73.08 68.67 52.24 47.52

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


Plan Year Ended December 31, 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Percentage of ARC contributed 102.2% 53.7 60.9 75.3 64.2 64.6 67.8 44.5 59.0 47.3 33.5 --

Long-Term Funding-Reforms to improve the plan


rate of 11.00% of payroll. 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%

Total ARC is 28.31% of payroll compared to the total scheduled contribution

Long-Term Funding-Reforms to improve the plan


On February 27, 2013, a tentative agreement was reached with the following

schedule for contributions:

Year
2013 2014 2015 2016 2017

RTD
12% 12% 13% 13% 13%

Members
4% 4% 5% 5% 5%

Total
16% 16% 18% 18% 18%

Long-Term Funding (Continued)


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

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
Reforms have been enacted to reduce benefit accruals for new hires and to

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

GASB 67/68
GASB 67 (financial accounting for the Plan) is effective for the Plans Fiscal

Year ending December 31, 2014

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

pay projected benefits and the Plans 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 RTDs balance sheet will be less than the 7% (creating a higher unfunded liability than what the valuation will show)

Under GASB standards, the long-term investment return assumption must be sufficient to

GASB 68 (financial accounting for the Employer) is effective for RTDs

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

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