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					      Alameda County Transportation Commission Board
           meeting as a committee of the whole as the

      FINANCE AND ADMINISTRATION COMMITTEE

                    MEETING NOTICE
                    Monday, February 14, 2011, 1:30 P.M.
              or immediately following the Programs and Projects
               Committee (PPC) Meeting, whichever occurs later
             1333 Broadway, Suite 300, Oakland, California 94612

    Chair:       Vice Mayor John Chiang
    Vice Chair: Councilmember Rebecca Kaplan
    Members: Mayor Mark Green                   Supervisor Scott Haggerty
                 Supervisor Nadia Lockyer              Supervisor Wilma
    Chan
                 Councilmember Laurie Capitelli Director Tom Blalock
                 Councilmember Beverly Johnson
    Staff Liaisons:      Patricia Reavey
    Executive Director: Arthur L. Dao
    Clerk of the Commission: Gladys V. Parmelee


                            AGENDA
      Copies of Individual Agenda Items are Available on the
         Alameda CTC Website – www.AlamedaCTC.org

1     PUBLIC COMMENT
Members of the public may address the Committee during “Public Comment” on
any item not on the agenda. Public comment on an agenda item will be heard
when that item is before the Committee. Anyone wishing to comment should
make his or her desire known to the Chair.

2    CONSENT CALENDAR                                                  A
     2A.  Minutes of January 10, 2011 – page 1

3    FINANCIAL MATTERS                                        A
     3A.   Approval of FY2010-11 Consolidated Mid-Year Investment
           Report – page 7

     3B.      Approval of ACTIA’s FY2010-11 Mid-Year Budget Update and
              Statement of Revenues and Expenditures – page 21
Alameda County Transportation Commission
Finance and Administration Committee Agenda
February 14, 2011
Page 2 of 2



        3C.      Approval of ACCMA’s FY2010-11 Mid-Year Financial Update – page 29

4       ADMINISTRATIVE MATTERS                                                                    A
        4A. Review of New Agency Business Plan and Organization Structure – page 39

5       CLOSED SESSION                                                                      A
        5A.   Closed Session: Confer with legal counsel regarding personnel matters pursuant to
        Government Code §54957 (two matters)

        5B.      Report on Closed Session

6        STAFF AND COMMITTEE REPORTS


7     ADJOURNMENT/NEXT MEETING: MARCH 14, 2011




                       Key:     A – Action Item; I – Information Item; D - Discussion Item
              (#) All items on the agenda are subject to action and/or change by the Committee.

                   PLEASE DO NOT WEAR SCENTED PRODUCTS SO INDIVIDUALS WITH
                            ENVIRONMENTAL SENSITIVITIES MAY ATTEND
                                            Glossary of Acronyms

                                                       MTS         Metropolitan Transportation System
ABAG       Association of Bay Area Governments
ACCMA      Alameda County Congestion Management        NEPA        National Environmental Policy Act
           Agency
                                                       NOP         Notice of Preparation
ACE        Altamont Commuter Express
                                                       PCI         Pavement Condition Index
ACTA       Alameda County Transportation Authority
                                                       PSR         Project Study Report
           (1986 Measure B authority)
                                                       RM 2        Regional Measure 2 (Bridge toll)
ACTAC      Alameda County Technical Advisory
           Committee                                   RTIP        Regional Transportation Improvement
                                                                    Program
ACTC       Alameda County Transportation
           Commission                                  RTP         Regional Transportation Plan (MTC’s
                                                                   Transportation 2035)
ACTIA      Alameda County Transportation
           Improvement Authority (2000 Measure B       SAFETEA-LU Safe, Accountable, Flexible, Efficient
           authority)                                           Transportation Equity Act
ADA        Americans with Disabilities Act             SCS         Sustainable Community Strategy
BAAQMD     Bay Area Air Quality Management District    SR          State Route
BART       Bay Area Rapid Transit District             SRS         Safe Routes to Schools
BRT        Bus Rapid Transit                           STA         State Transit Assistance
Caltrans   California Department of Transportation     STIP        State Transportation Improvement Program
CEQA       California Environmental Quality Act        STP         Federal Surface Transportation Program
CIP        Capital Investment Program                  TCM         Transportation Control Measures
CMAQ       Federal Congestion Mitigation and Air       TCRP        Transportation Congestion Relief Program
           Quality                                     TDA         Transportation Development Act
CMP        Congestion Management Program               TDM         Travel-Demand Management
CTC        California Transportation Commission
                                                       TFCA        Transportation Fund for Clean Air
EIR        Environmental Impact Report                 TIP         Federal Transportation Improvement
FHWA       Federal Highway Administration                          Program
FTA        Federal Transit Administration              TLC         Transportation for Livable Communities
GHG        Greenhouse Gas                              TMP         Traffic Management Plan
HOT        High occupancy toll                         TMS         Transportation Management System
HOV        High occupancy vehicle                      TOD         Transit-Oriented Development
ITIP       State Interregional Transportation          TOS         Transportation Operations Systems
           Improvement Program                         TVTC        Tri Valley Transportation Committee
LATIP      Local Area Transportation Improvement       VHD         Vehicle Hours of Delay
           Program
                                                       VMT         Vehicle miles traveled
LAVTA      Livermore-Amador Valley Transportation
           Authority
LOS        Level of service
MTC        Metropolitan Transportation Commission
                                                                        FAC Meeting 02/14/11 
                                                                             Agenda Item 2A




                           Alameda County Transportation Commission
                        FINANCE AND ADMINISTRATION COMMITTEE

Mayor Mark Green convened the meeting at 1:35 PM.

1      PUBLIC COMMENT
There was no public comment.

Agenda Item 6A was taken before the other items in the agenda.

6     CLOSED SESSION
6A.   Closed Session: Confer with legal counsel regarding personnel matters pursuant to
             Government Code §54957
Mayor Green called a closed session at 1:37 PM.

6B.    Report on Closed Session
The closed session ended at 1:52 PM. Chair John Chiang stated that there was nothing to report.

2      CONSENT CALENDAR
A motion to approve the consent calendar was made by Mayor Green; a second was made by
Supervisor Haggerty. The motion passed 7-0.

3       FINANCIAL MATTERS
3A.     Presentation of Independent Review of Specific Financial Functions of the former
Alameda County Congestion Management Agency (ACCMA) and the Alameda County
Transportation Improvement Authority (ACTIA)
Nancy Whelan made a presentation of an independent and high-level review of specific financial
functions of ACCMA and ACTIA. She stated that the financial review focused on four areas
and the following are her recommendations: (1) Cost Allocation Plans; (2) Budgeting and
Financial Condi -tion; (3) Local Funds Exchange; and (4) Financial Policies and Procedures. She
also stated that the analysis did not identify any fatal flaws or significant challenges to the
integration of financial practices. Some additional work would facilitate consistent and accurate
budgeting and administration as part of finalizing the merger such as: less formalized procedures
should be documented and those financial management policy areas with identified discrepancies
need to be reconciled, further coordination will be necessary to develop a consolidated cost
allocation plan, and several items that are specific to the ACCMA require additional work to
help ensure internal efficiency, including identification of funding requirements for ACCMA
core functions and creation of more detailed policies and procedures for local fund exchanges.
She recommended that Alameda staff begin the following activities immediately: (a) Develop
more detailed analysis of core function expenses and resources to support budget analysis; (b)
Document policies and procedures for Local Exchange Funds; and (c) Prepare recommendations
for consolidated policies and procedures for Board consideration.

This item was for information only.



                                                                                      Page 1
Alameda County Transportation Commission
Minutes of Finance and Administration Committee
January 10, 2011 Meeting
Page 2 of 4

3B.     Approval of Revised ACTIA Sales Tax Budget for FY 2010-11
Patricia Reavey requested that the Committee recommend that the Commission approve the
revised ACTIA Measure B Sales Tax Revenue Projection for the current fiscal year (FY 2010-
11) from $90 million to $102 million. A motion to accept staff recommendation was made by
Supervisor Haggerty; a second was made by Director Blalock. The motion passed 7-0.

3C.   Approval of FY 2010-2011 Budget – Second Quarter Update for ACCMA
Yvonne Chan requested that the Committee recommend that the Commission approve the
Second Quarter FY 2010-2011 ACCMA project budgets. A motion to accept staff
recommendation was made by Supervisor Haggerty; a second was made by Councilmember
Kaplan. The motion passed 7-0.

4       ADMINISTRATIVE MATTERS
4A.     Approval of Interim Benefits Resolution
Arthur Dao requested that the Committee recommend that the Commission approve Resolution
11-001 Interim Benefits for Staff members for Calendar Year 2011. This Benefits Resolution
contains revised specific benefits that were adopted by the Commission in October 2010 for the
employees of ACTIA and ACCMA, and make it effective February 1, 2011. He said that the
health benefits, retirement and retiree medical benefits, and salary ranges for employees will not
be affected by this Resolution, and will remain unchanged until the Commission adopts a final
consolidated Salary and Benefits Resolution in May 2011, to be put into effect in fiscal year
2011-12. He also added that this resolution will allow current ACTIA and ACCMA employees
to be governed by a consistent set of policies regarding holiday schedules, accrual of leaves, as
well as other benefits, prior to the anticipated effective date of the fully merged benefits program
on July 1, 2011. A motion to accept staff recommendation was made by Councilmember Kaplan;
a second was made by Supervisor Haggerty. The motion passed 7-0.

Director Blalock made an alternate motion to approve the Resolution with an amendment to
Section 6.1 Transit Subsidy benefits; instead of $188 per month it should state “federal
standard”. He stated that by changing $188 to federal standard there will be no need for an
annual amendment on the amount. Councilmember Kaplan made a second. The alternate motion
passed 7-0.

4B.    Approval of Agency Work Program and Executive Director’s Objectives for
       FY 2010-11
Arthur Dao requested that the Committee recommend that the Commission approve the
Executive Director’s Objectives and the Agency Work Program for the second half of FY 2010-
11. A motion to accept staff recommendation was made by Mayor Green; a second was made by
Supervisor Haggerty. The motion passed 7-0.

5      CONTRACTS AND AGREEMENTS STATUS REPORTS
5A.    Approval of Amendment No. 1 to the Professional Services Agreement with the Bay
       Area Program Management Group, LLC (A10-0017) for additional and deferred
       program and project management services from previous fiscal year
Arthur Dao requested that the Committee recommend that the Commission approve Amendment
No. 1 to the professional services contract with the Bay Area Program Management Group



                                                                                         Page 2
Alameda County Transportation Commission
Minutes of Finance and Administration Committee
January 10, 2011 Meeting
Page 3 of 4

(BAPMG) for additional and deferred program and project management services from the prior
fiscal year (FY 2009-10). He said that the proposed Amendment 1 would rollover $250,000 of
unused approved contract budget from FY 2009-10 to the current FY 2010-11 contract. A
motion to accept staff recommendation was made by Director Blalock; a second was made by
Mayor Green. The motion passed 7-0.

5B.     Approval to Interview Firms then Negotiate and Execute a Contract with the Top-
        ranked Firm for Public Opinion Research Services for Development of a
        Transportation Expenditure Plan
Tess Lengyel requested that the Committee recommend that the Commission authorize the
interview of firms for public opinion research services for development of a Transportation
Expenditure Plan, and approval to negotiate and execute a contract with the top- ranked firms.
Four firms submitted proposals by the due date of January 7, 2011: (1) Valerie Brock
Consulting; (2) EMC Research, Inc.; (3) Fairbank, Maslin, Maullin, Metz & Associates; and (4)
Quantum Market Research, Inc. A motion to accept staff recommendation was made by Mayor
Green; a second was made by Councilmember Kaplan. The motion passed 7-0.

5C.     Approval of the Consolidated Annually Renewed Contracts Plan for Administrative
        Services for Fiscal Year 2011-12
Arthur Dao requested that the Committee review and recommend that the Commission approve
the plan for the consolidated annually renewed administrative services contracts for FY 2011-12
as follows:
    (A) Authorize the Executive Director to issue Requests for Proposals (RFPs) for the
         following services: (1) Banking Services; (2) Independent Financial Audit Services
         (related to the FY 2011-12 combined ACTC audit); (3) Insurance Brokerage Services;
         (4) Information Technology Services; (5) Media and Public Relations Services; and (6)
         Project Control Services.
    (B) Authorize the Executive Director to negotiate new one-year contracts for the following
         services: (1) Investment Advisor Services; (2) Legal Services; (3) Human Resources
         Services; (4) Programmatic Support Services; (5) Bicycle and Pedestrian Coordination
         Services; (6) Wheelchair and Hospital Discharge Transportation Services; (7) Paratransit
         Taxi Services; (8) Paratransit Coordination Services; (9) Utility Potholing Services; (10)
         Consolidated State Legislative Advocacy Services; and (11) Consolidated Federal
         Legislative Advocacy Services.
    (C) Authorize the Executive Director to negotiate new one-year limited scope/limited
         contracts or issue RFPs for the following services: (1) Construction Contracts Technical
         Assistance; (2) Local Business Equity Program Services; (3) Utility Coordination
         Services; and (4) Right-of-Way Acquisition Services.
A motion to accept staff recommendation was made by Director Blalock; a second was made by
Councilmember Capitelli. The motion passed 7-0.

7      STAFF AND COMMITTEE MEMBER REPORTS
Councilmember Kaplan was pleased to inform the Committee that Councilmember Larry Reid
was elected as the President of the City Council of Oakland.




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                                                                        FAC Meeting 02/14/11 
                                                                                   Agenda Item 3A



                                          Memorandum

DATE:                 February 1, 2011

TO:                   Finance and Administration Committee

FROM:                 Arthur L. Dao, Executive Director
                      Patricia M. Reavey, Director of Finance
                      Anees A. Azad, Finance and Administration Manager

SUBJECT:              Approval of the Consolidated Mid-Year Investment Report

Recommendation
It is recommended that the Committee approve the attached Alameda CTC Consolidated Mid-Year
Investment Report (Attachment A).

Summary
 •   As of December 31, 2010, total cash and investments held by the Alameda CTC were
     $318.0 million. This total is down $9.6 million or 2.9% from the prior year-end balance of
     $327.6 million.

 •      The reduction in the ACTA balance of $2.9 million or 1.6% and the ACTIA balance of $3.3
        million or 2.7% were primarily due to capital expenditures. The decrease in the ACCMA
        balance of $3.4 million or 14.4% was due to a net drawdown in the Exchange Fund.

 •      Investment yields continue to decline with the return on investment for the Alameda CTC at
        1.56% compared to the prior year return of 2.88%. However, interest was projected for the
        FY2010-11 budget at a rate of 1.00%.

 •      The near-term strategy for investments is to gradually reduce the investment horizon. This
        strategy anticipates the need to draw down cash balances for ACTA ACTIA capital projects,
        as demonstrated by the capital project cash flow projections. The ACTIA is projecting the
        depletion of its capital fund balances in FY 2012-13 which will require external financing to
        satisfy capital project obligations.

 •      Attached is a detail list of investments managed by the ACTA and the ACTIA investment
        advisors. These managed investments remain compliant with the current, adopted
        Investment Policy.

Attachments:
Attachment A - Investment Status Report
Attachment B - Detail of Investment Holdings (managed by PFM and Chandler)




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                                     Page 8
         Attachment A 




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                                 Page 10
          Attachment B




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                                                                             FAC Meeting 02/14/11 
                                                                                  Agenda Item 3B 




                                               Memorandum

DATE:                February 1, 2011

TO:                  Finance and Administration Committee

FROM:                Patricia M. Reavey, Finance Director

SUBJECT:             Approval of Mid-Year Budget Update and Statement of Revenues and Expenditures
                     for the Alameda County Transportation Improvement Authority (ACTIA)

Recommendations
It is recommended that the Commission approve:

   •   The Mid-Year Budget Update (see Attachment A) which includes an increase in the ACTIA Capital
       Budget of $4.4 million
   •   Statement of Revenues and Expenditures as of December 31, 2010 (see Attachment B)

Summary
Mid-Year Budget Update

   •   The Revised Budget reflects a $12 million increase in sales tax revenues, from $90 million to $102
       million, approved by the Commission in January 2011, and a $20,000 increase in the equipment budget
       approved in December 2010.

   •   The Revised Budget also proposes an increase in the ACTIA Capital Budget of $4.4 million due to
       Measure B commitments being moved forward in project funding plans based on funding source
       availability issues. ACTIA has experienced some fairly large swings in funding needs on projects such
       as BART Warm Springs Extension, BART Oakland Airport Connector, and I-580 Auxiliary Lanes (see
       Attachment C).


Statement of Revenues and Expenditures

   •   As of December 31, 2010, the ACTIA fund balance was $296.8 million which is better than Mid-Year
       Budget by $34.9 million or 13.3%. This positive variance is primarily the result of delays in the ACTA
       projects and projects with large Measure B commitments from the ACTIA.

   •   Revenues were $55.5 million, which is higher than Mid-Year Budget by $2.2 million or 4.1%.

   •   Expenditures were $61.4 million, which is lower than Mid-Year Budget by $32.8 million or 34.8% due
       to delays in the ACTA projects and projects with large Measure B commitments from the ACTIA.




                                                                                         Page 21
   •   The ACTC and the ACTIA General Funds have offsetting variances in expenditures due to the transfer
       of administrative costs for the benefit of the ACTC from the ACTIA General Fund to the ACTC General
       Fund.

   •   The ACTIA Salary and Benefits Limitation ratio of 0.82% and Administrative Cost Limitation ratio of
       3.06% were calculated based on actual expenditures and were found to be in compliance with the
       requirements of 1.00% and 4.50%, respectively.

Discussion
Historically the budget update document has been prepared consolidated with the update of actual revenues and
expenditures for the period. These reports were prepared in a vertical format that has become difficult to
maintain as additional funds have been added to the list of ACTIA governmental funds causing a difficulty in
the break out of revenues and in accounting for the change in fund balance by fund.

For the FY2010-11 Mid-Year Budget Update, the format has been revised and is displayed horizontally. One of
the benefits to this new format is that the budget and actual costs are broken out by fund and all activity in each
section, be it budget, revised budget or actuals all represent the change in fund balance by that specific fund.
Another benefit is that it segregates the request for a budget revision on the budget update document from the
actual Statement of Revenues and Expenditures with a comparison to the mid-year budget so that year-to-date
actuals and variance from budget can be reviewed without getting lost in the budget adjustment process.

Fiscal Impact
Approval of the recommended budget update will increase the Capital Budget by $4.4 million for FY2010-11 to
accommodate project spending needs for various projects.

Attachments
Attachment A -        The Mid-Year Budget Update
Attachment B -        The Statement of Revenues and Expenditures
Attachment C -        ACTIA FY2010-11 Capital Project Budget Mid-Year Update




                                                                                              Page 22
Attachment A




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                                 Page 24
Attachment B




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Attachment C




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                                                                    FAC Meeting 02/14/11 
                                                                         Agenda Item 3C   




                                          Memorandum


DATE:         January 31, 2011

TO:           Finance and Administration Committee

FROM:         Patricia Reavey, Director of Finance
              Yvonne Chan, Accounting Manager

SUBJECT:      Approval of the ACCMA Operating Statement of Revenues and Expenditures,
              Project Expenditure Report and Transportation for Clean Air and Exchange
              Program Activity Reports for the Quarter Ended December 31, 2010 and Year-
              to-Date


Recommendations:
It is recommended that the Commission approve the attached Operating Statement of Revenues and
Expenditures, Project Expenditure Report and Transportation for Clean Air and Exchange Program
Activity Reports for the quarter ended December 31, 2010.

Summary/Discussion:
Operating Statement of Revenues and Expenditures

Overall, the ACCMA is very close to the 50% target of budgeted expenses midway through the year.

   •   Salaries and Wages are 58.40% of budget half way through the fiscal year due to personnel
       changes related to the Alameda CTC merger.
   •   Insurance is 124.01% of budget half way through the fiscal year due to an unbudgeted expense
       incurred for Directors and Officers and Employment Practices Liability insurance.
   •   Tenant Improvements/Capital Outlay is at 144.89% of budget half way through the fiscal year
       due to unbudgeted expenses incurred to purchase equipment and install combined ACCMA
       and ACTIA phone and computer network systems.

Project Expenditure Report

Midway through FY2010/11, projects have incurred only 24% of projected costs for the fiscal year
for various reasons. Some of the reasons on the larger projects include:

   •   Invoices on the I-880 23rd/29th Operational Improvements project have been delayed in
       processing due to a pending contract amendment. However, this project is expected to
       approach budget by fiscal year end.




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Alameda County Transportation Commission                                             February 14, 2010
                                                                                               Page 2
   •   On the I-580 East Bound Hot Lane and Auxiliary Lane projects, the scope has been put on
       hold. These projects are not expected to reach budget expectations by fiscal year end.
   •   On the I-580 West Bound HOV Foothill to Greenville project, there has been a delay in
       construction due to scope changes which has pushed the schedule out for the ROW acquisition
       into next fiscal year. The project is not expected to reach budget expectations by fiscal year
       end.
   •   On the I-880 HOV Lane project, there has been a delay in work due to additional Caltrans
       requirements and contract authority issues. The project is not expected to reach budget
       expectations by fiscal year end.
   •   The I-80 Integrated Corridor Mobility project has been moving slower than originally
       projected. The project is not expected to reach budget expectations by fiscal year end.

TFCA and Exchange Fund Activity Reports
The TFCA and Exchange Fund Activity Reports have been included to show the revenues,
expenditures and the program balance as of December 31, 2010.

Fiscal Impacts:
There is no fiscal impact to the approval of this item.

Attachments:
Attachment A: Statement of Operating Revenues and Expenditures for the Quarter Ended
              December 31, 2010 and YTD
Attachment B: Project Expenditure Report for the Quarter Ended December 31, 2010 and YTD
Attachment C: Statement of TFCA Program Revenues and Expenditures for the Quarter Ended
              December 31, 2010 and YTD
Attachment D: Statement of Exchange Program Revenues and Expenditures for the Quarter Ended
              December 31, 2010 and YTD




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Attachment A




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                                 Page 32
Attachment B




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Attachment C




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Attachment D




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                                                                         FAC Meeting 02/14/11 
                                                                              Agenda Item 4A 



                                        Memorandum

DATE:          February 7, 2011

TO:            Finance and Administration Committee

FROM:          Arthur L. Dao, Executive Director

SUBJECT:       Agency Strategic Business Plan and Organization Structure

Recommendation
It is recommended that the Commission review and endorse the attached Strategic Business
Plan for Agency staff and the new consolidated organization structure for the Alameda
County Transportation Commission.

The Strategic Business Plan set out basic operating principles and goals to accomplish the
Agency‘s consolidated mission. It also broadly describes and prioritizes the core functions of
the Alameda CTC (transportation planning, funding, and programs and projects delivery)
within the current dynamic and challenging environment of decreasing and volatile
transportation funding and revenues, and increasing need for accountability and
sustainability.

The new consolidated organizational structure provides a staffing plan to implement the
Agency’s core functions to meet its goals and objectives in the Business Plan. The proposed
staffing plan includes a reduction in the total number of employees, and the implementation
of the staffing plan will involve specific personnel transactions that may become personnel
issues; therefore, the consolidated organization structure will be discussed in closed sessions
with the Finance and Administration Committee, and eventually, with the full Commission.

Discussion
As part of the process of merging the Alameda County Transportation Improvement
Authority (ACTIA) and the Alameda County Congestion Management Agency (CMA) into
the Alameda County Transportation Commission (Alameda CTC), the staff from ACTIA and
CMA needs to be merged into one cohesive organization. So far, the merger has begun to
eliminate redundancies and created efficiencies in administration, planning, programs and
project delivery, and streamlined legislative, outreach and funding efforts. In October 2010,
the Commission approved a new and reconciled benefits structure for the new Agency, which
paved the way for the staff transition of the two former Agencies to the Alameda CTC.

As the final phase, an organization structure, in the form of a staffing plan, has been
developed to ensure that the goals and objectives of the Agency could be achieved. The
Agency business plan and the accompanying organization structure were developed with a
substantial consideration for opportunities to reduce costs by sharing administrative, financial




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Alameda County Transportation Commission                                  February 14, 2011
                                                                                     Page2
__________________________________________________________________________________________

and project management functions, create a net positive impact of improved efficiency in
each Agency, and enable both Agencies to better serve the public interest. Furthermore, the
Agency’s unified organization structure was developed with the following considerations:

•   To meet and exceed the goals and objectives described in the Strategic Business Plan;
•   To preserve the strengths and success of the former Agencies;
•   To unite and strengthen the Agency, one better positioned to plan, fund, and deliver
    programs and projects, in the highly competitive environment which now exists;
•   To ensure that the future cost structure of the organization will be consistent with
    available revenues;
•   To reduce redundancies where they exist;
•   To support the spirit and morale of all Agency staff;
•   To retain valued and valuable staff to maintain Agency leadership in planning, funding,
    and delivery of programs and projects.

Prior to the merger (prior to September 2010), the combined ACTIA and ACCMA had a
staffing level of 34 employees (25 ACCMA employees and 9 ACTIA employees).
Currently, the Alameda CTC has 29 full-time staff positions. The endorsement of the new
organizational structure, including both eliminated and new positions, would result in a net
reduction of the current combined staffing level from 29 full-time equivalent positions (FTE)
to 27 FTE.

In general, the current 29-employee organization structure has the following profile:

•   There are one executive director and six managers. There are no deputy directors.
•   Excluding the executive director, there are eight engineers. Three are Principal
    Engineers, four are Senior Engineers, and one Associate Engineer. One of the four
    Senior Engineers is not a registered civil engineer (which was a condition at the time of
    employment), and was converted to a Senior Planner.
•   There are nine employees serving in the administrative function, which is a ratio of about
    1 administrative FTE to 2 non-administrative FTEs.

Once the Commission endorsed the new organizational structure and the newly
recommended positions, the Executive Director will direct the Human Resources consultant
to conduct a salary survey in an effort to develop and recommend an appropriate salary
structure which will include salary ranges that are commensurate with Alameda CTC’s
public sector labor market (i.e., other transportation Agencies and member Agencies in
Alameda County and the Greater San Francisco Bay Area), as opposed to the private sector
market, which has been the past practice.

The proposed salary structure for the Alameda CTC will include 21 classifications or grades
(see Attachment B). The former ACCMA salary structure contained 35 classifications or
grades. This reduction in grades in the proposed salary structure is in keeping with the need
of a smaller organization where the employees must be more flexible and less bureaucratic.
This approach should also increase the prospects for cross-functional growth and employee




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Alameda County Transportation Commission                                  February 14, 2011
                                                                                     Page3
__________________________________________________________________________________________

development in the organization. It would also help employees to move laterally in a small
organization in which promotion prospects may be limited.
Endorsement of the new organizational chart will also allow the Executive Director to
implement a transition plan to formally move staff from the two former Agencies into the
new organizational structure. Implementation of the transition plan will include various
specific personnel transactions including promotion in-place, creation of new positions
subject to reassignment and recruitment, and elimination of positions through consolidation
and reduction in force. The adopted Administrative Code of the Alameda CTC allows the
Executive Director, without limitation, to administer the personnel system of the
Commission, including hiring, controlling, supervising, promoting, transferring, suspending
with or without pay or discharging any employee, including but not limited to determination
of a staffing plan and determination of each employee’s level of salary, subject to
conformance with the Annual Budget and the salary and benefit plan established from time to
time by the Board.

At this point, it is anticipated that the employee transition process into the new organization
structure could start in March 2011, and be completed by June 30, 2011, to allow for the new
organization to start in the new fiscal year 2011-12, on July 1, 2011. Please see the
Employee Transition Schedule attached.

Background
Management Partners’ Merger Report, submitted to the Board in 2009, lists a great number
of areas and opportunities for consolidation of functions, programs, financial resources, and
staff, and recommends that the merger would be beneficial for the two Agencies in order to
best and most efficiently serve the public.

Per the report, the greatest opportunities for consolidation and efficiency improvement would
be financial services, administrative services, and capital project delivery. Opportunities to
reduce costs by sharing administrative, financial and project management functions, would
have a net positive impact of improved efficiency in each Agency and enable both Agencies
to better serve the public interest.

Management Partners’ threshold analysis indicated that a complete merger or integration of
the two Agencies would result in a united and strengthened Agency, one better positioned to
deliver programs and projects, in the highly competitive environment which now exists.

Mergers or consolidations require a commitment to long term goals. They also require an
upfront investment to move forward and once the project has begun, the process should move
deliberately in accordance with an agreed upon implementation plan and schedule.
Additionally, and equally important, there are always significant employee relations issues to
consider as the process proceeds. Retention and recruitment of quality staff is essential in the
delivery of transportation programs and projects, as is ensuring that the capability is in place
for strategically planning for the right projects in the competitive environment of
transportation funding.

Although all of the projects on sales tax projects lists have proven to be of major importance



                                                                                   Page 41
Alameda County Transportation Commission                                  February 14, 2011
                                                                                     Page4
__________________________________________________________________________________________

in improving congestion in the county, newly emerging issues have also been extremely
problematic to local communities. Elected officials and city and county staff in Alameda
County have consistently praised CMA staff for their skill at programming funding to meet
these unforeseen needs and rendering assistance where the local Agency does not have
sufficient labor capacity. CMA is also somewhat dependent on responding to these
unforeseen needs to allow it to develop projects and generate grants that both address the
needs of local communities and fund its own continuing existence.

ACTIA has developed efficient project execution processes and procedures intended to
deliver the proposed projects in a timely manner and within the resources allocated to them
through the sales tax measure. That obligation is not easily sublimated to respond to the
crisis of the day. To balance these competing interests, strong project management processes
and procedures have been extremely beneficial to both planned and emerging projects. In a
single organization, those processes and procedures must be consistent for effective operation
and the transparency required of government initiatives.

ACTIA has been commended for finding resources to supplement their capital program
delivery as the original sales tax measures almost never can fund projects entirely as they
change in scope and priority as implementation moves forward. This responsive,
entrepreneurial approach works well, forcing the staff of both Agencies to be highly
responsive to customer communities as they deliver projects and programs.

A business model describes how an organization will provide value for the functions and
services delivered. It provides a broad framework of informal and formal descriptions to
represent the core aspects of the business (transportation planning and programs, capital
project delivery) including a clear definition of purpose, strategies, organizational structure
and operational processes and procedures. Fundamental to an effective business model are
its revenues and cost structure as they enable the broader functions and services of the
organization.

The business model of a consolidated Agency should build upon the strengths of both the
CMA and ACTIA. Neither organization should be allowed to become a burden to the other.
One organization cannot shift its costs to the other without recognition of the impact and
providing resources to enable the program to be successful. The other organization cannot
burden the cost of providing services with all of its current organizational overhead. Current
overhead is part of each organization’s burden and would remain if no service sharing was
undertaken. An implementation plan must be constructed to recognize that each organization
can improve its cash position slightly through reasonable cost sharing, but neither
organization should rely on the other for a revenue stream to support its core mission.

Redundancies between the two Agencies exist and there are opportunities for service sharing,
improvements and efficiencies. Areas that Management Partners identified include:

•   Redundancies in the Project Controls Teams and potential for efficiencies even though
    they work on different capital projects;
•   Website management;



                                                                                  Page 42
Alameda County Transportation Commission                                  February 14, 2011
                                                                                     Page5
__________________________________________________________________________________________

•   Streamlining contract procurement and management and expanding opportunities in this
    area;
•   Financial analysis, reporting and general services;
•   Human Resources;
•   Administrative policies and procedures;
•   An improved long term, integrated strategy for future transportation projects and
    programs; and
•   Community outreach.

One of Management Partners’ recommendations was that the new Executive Director’s
leadership should focus on (among several other major categories):

•   Designing an organizational structure that preserves the strengths of both Agencies while
    ensuring integration;
•   Creating a new mission, vision, set of values and goals which will support the new
    organization;
•   Building an effective team with norms for working together and achieving the mission of
    the new organization;
•   Significantly expanded integration of the transportation planning efforts of CMA with
    project planning of future sales tax initiatives;
•   Creating one set of policies, practices, and procedures to be used consistently throughout
    the new organization; and
•   Restructuring financial structures as necessary to ensure compliance with the restrictions
    of enabling legislation and transparency, as well as financial solvency.

The report also speaks about adjusting staffing and consultant support to accommodate the
workload and provide comparable financial planning and services currently enjoyed by both
organizations.

The following are recommendations in Management Partners’ merger report regarding
staffing (note that the recommendations are numbered per the report and not all
recommendations are listed here):

•   Recommendation 1: Merge the staffs of ACTA/ACTIA and CMA into a single
    organization under a single Executive Director.
•   Recommendation 2: Add 0.5 FTE position for support of the dual organization’s public
    outreach and publication efforts. The 0.5 FTE would be used to support interest in
    expanding work in this area.
•   Recommendation 3: Consolidate Board Secretary and Clerk of the Board duties as part of
    a plan to share administrative services between the Agencies. Reallocate existing
    administrative support as necessary to assist in this expanded work program.
•   Recommendation 5: Consolidate the financial and administrative services of the
    organizations. Adjust staffing and consultant support to accommodate the workload and
    provide comparable financial planning and services currently enjoyed by both
    organizations.



                                                                                 Page 43
Alameda County Transportation Commission                                  February 14, 2011
                                                                                     Page6
__________________________________________________________________________________________

•   Recommendation 6: Eliminate one executive financial management position and assign
    the financial management responsibilities for both Agencies to the remaining position.
•   Recommendation 7: Add a Senior Management Analyst position to provide additional
    support to the consolidated financial services function. Allocate 0.5 FTE of this position
    to assist with financial management and analysis duties as needed.
•   Recommendation 9: Preserve existing accountant positions to support accounting and
    financial transactions resulting from the integration of the financial services between the
    two Agencies. Reevaluate the accounting positions upon separation of any accounting
    professional to match skills with workload needs at the time.
•   Recommendation 16: Assign 0.5 FTE of the recommended Senior Management Analyst
    position to provide contract and procurement support for both Agencies.

The following represent some of the key considerations that affect staffing that Management
Partners believes are important to be addressed during the merger implementation plan:

•   Implementation should be phased, fluid and flexible during the transition of the Agencies,
    preserving the best of both organizational cultures and minimizing the impact on project
    and program delivery.
•   Implementation should occur in a predictable manner to reduce uncertainty for
    employees who may be impacted.
•   Staff transitions and associated employee relations issues are important. Careful attention
    to the interests and needs of all employees should be on the critical path of any
    implementation plan.
•   Service sharing and choices about an organizational structure will have employee/labor
    relations implications and costs.
•   Any actions need to ensure that the spirit and morale of the respective Agencies is
    sustained and supported.
•   Retention of professional engineering staff is critical to sustaining project delivery
    schedules and commitments in the near term.
•   The cost allocation for the service sharing plan must be Agency neutral. The plan will
    not be cost effective if additional overhead costs are incurred by either organization at the
    fully burdened, overhead rate.

Finally, Management Partners’ report recommends that the ultimate organizational structure
of a merged Agency should be determined by the future Executive Director. The reason for
allowing the Executive Director to determine the structure is that he would be responsible for
ensuring that the Board’s goals are achieved.

Based on Management Partners’ recommendations and the new Strategic Business Plan, the
new organizational chart places great emphasis on planning, funding, and deliver of
programs and projects, while enhancing public outreach and legislative and policy advocacy.

Financial Impact
There is no immediate impact on the Agency’s budget. As indicated above, once the Board
endorses the newly recommended organizational chart, the Executive Director will direct the



                                                                                    Page 44
Alameda County Transportation Commission                                  February 14, 2011
                                                                                     Page7
__________________________________________________________________________________________

Agency’s HR consultant to conduct a compensation survey of the Agency’s public sector
market and make recommendations for appropriate salary ranges commensurate with the
external market, as well as, internal organizational hierarchy and position alignments. Once
the new salary ranges have been approved by the Board, we can determine what savings we
can achieve.

Attachments:
Attachment A -        Agency Strategic Business Plan
Attachment B -        Proposed Alameda CTC Staff Positions
Attachment C -        Employee Transition Schedule
Attachment D -        July, 2009 Consolidation and/or Service Analysis Report by
                      Management Partners, Inc.
Attachment E -        January, 2010 Merger Implementation Plan Report by Management
                      Partners, Inc.




                                                                                Page 45
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                                 Page 46
                                                                        Attachment A
                           ALAMEDA COUNTY
                      TRANSPORTATION COMMISSION

                     Mission, Strategic Goals, Principles

Mission Statement: Plan, fund and deliver transportation programs and
projects that expand access and improve mobility to foster a vibrant and livable
Alameda County

Strategic Goals:

Planning:    Identify transportation needs and opportunities to formulate
             strategies and solutions

             Objective 1 Monitor and analyze transportation system
                         performance

             Objective 2 Develop long range transportation plan

             Objective 3 Collaborate with state, regional, county and local
                         planning agencies to integrate transportation planning
                         with air quality and land use

             Objective 4 Conduct corridor and sub-area studies

             Objective 5 Inform funding policy at federal, state and regional
                         levels to align with identified needs


Funding:     Evaluate, prioritize and fund programs and projects

             Objective 1 Advise and influence funding agencies’ programming
                         policy

             Objective 2 Effectively program available funding

             Objective 3 Increase funding levels for transportation in Alameda
                         County




                                        1
                                                                            Page 47
Delivering: Deliver quality programs and projects on schedule and within budget

              Objective 1 Monitor implementation with oversight and reporting

              Objective 2 Support program and project implementation with
                          assistance where appropriate

              Objective 3 Exercise and promote best management practices in
                          the delivery of programs and projects


Principles:

We accomplish the mission of this agency through the application of the following
principles:

Public Service:     Serve the public in the development and
                    delivery of transportation programs and projects

Accountability:     Plan, fund and deliver programs and projects in an open,
                    transparent, efficient and effective manner

Relationships:      Foster cooperative relationships/partnerships with
                    federal, state, regional, local partners and other stakeholders




                                        2
                                                                           Page 48
Alameda County Transportation Commission
Strategic Business Plan 2011

Mission
Strategic Goals
Principles




                      Page 49
                                           TABLE OF CONTENTS


                                               Overview..........................................................4

                                               Introduction......................................................5

                                               Mission Statement...........................................9

                                               Operating Principles......................................11

                                               Strategic Goals..............................................12




                                                                               Page 50
Alameda County Transportation Commission                                      Strategic Business Plan 2011 | 3
  Overview                                                    Introduction
  This Strategic Business Plan will help guide the Alameda    The Alameda County Transportation Commission
  County Transportation Commission staff administer           (Alameda CTC) is a newly-formed, countywide
  transportation projects and programs in Alameda County.     transportation agency resulting from a merger of the
  The Strategic Business Plan will identify the mission,      Alameda County Congestion Management Agency
  strategic goals, and principles of the agency.              (ACCMA) and the Alameda County Transportation
                                                              Improvement Authority (ACTIA). Assuming the roles of
  Three strategic goals are outlined in the Strategic         both agencies, the Alameda CTC works to plan, fund
  Business Plan—planning, funding, and delivery of            and deliver a broad spectrum of transportation projects
  transportation projects and programs. Each goal includes    and programs to enhance mobility throughout Alameda
  objectives to help refine the capital development program   County. The merger eliminated redundancies and created
  and prioritize business plan activities.                    efficiencies in planning, programs and project delivery,
                                                              and streamlined legislative, policy and funding efforts.

                                                              The Alameda County Transportation Commission is
                                                              governed by a 22-member Board of Directors and
                                                              supported by staff of both ACTIA and ACCMA. Four
                                                              Community Advisory Committees extend the agency’s
                                                              work, and the Alameda County Technical Advisory
                                                              Committee will continue to provide technical feedback to
                                                              the agency.




                                                                                             Page 51
Alameda County Transportation Commission                                                    Strategic Business Plan 2011 | 5
 ACTIA                                                       ACCMA
 In 1986, Alameda County became one of the first self-       Passed by California voters in 1990, Proposition
 help counties in California to authorize a voter-approved   111 added nine cents per gallon to the state fuel
 half-cent sales tax statute. The Alameda County             tax, funding local, regional and state transportation
 Transportation Authority (ACTA) was designated as the       projects and services. It also required urban counties
 governing agency to administer and oversee delivery         to designate a congestion management agency, with
 of the Measure B transportation projects in Alameda         the primary responsibility of coordinating transportation
 County. The Measure had passed with 56.5 percent of         planning, funding and other activities in a congestion
 Alameda County votes.                                       management program.

 A second Measure B was reauthorized in November             In 1991, the ACCMA was created by a joint-powers
 of 2000, with 81.5 percent of Alameda County voters         agreement between Alameda County and all 14 cities
 pledging support again. ACTIA was created to deliver a      within the county. One of ACCMA’s prime responsibilities
 fresh set of essential transportation improvements and      was to develop and periodically update the Alameda
 services while ACTA continued to finalize the projects      Countywide Transportation Plan.
 promised to voters in the original Measure.




                                                                                            Page 52
Alameda County Transportation Commission                                                   Strategic Business Plan 2011 | 7
  PURPOSE OF ALAMEDA CTC’S WORK
  The Alameda CTC assumes the combined roles of former         Mission Statement
  agencies, ACTIA and ACCMA to plan, fund and deliver a
  broad range of transportation projects and programs.
                                                               PLAN, FUND AND DELIVER TRANSPORTATION
  In undertaking the duties of ACCMA, the Alameda CTC
                                                               PROGRAMS AND PROJECTS THAT EXPAND
  will continue to coordinate countywide transportation
  planning and will attract the necessary funding to           ACCESS AND IMPROVE MOBILITY TO FOSTER A
  implement projects.                                          VIBRANT AND LIVABLE ALAMEDA COUNTY.
  As successor to ACTIA, the Alameda CTC will continue
  to deliver an expenditure plan for Measure B. The
  expenditure plan for the half-cent transportation sales
  tax measure includes numerous capital projects,
  as well as program funds for local street and road
  improvements, special transportation to assist seniors and
  disabled individuals, transit operations and bicycle and
  pedestrian safety.


  BUILDING OF SUCCESSES
  Building on the successes of ACTIA and ACCMA,
  the Alameda CTC is poised to function with enhanced
  capability and effectiveness in the areas of:

    •   Transportation planning and programming
    •   Programs and projects delivery
    •   Legislation and policy to support congestion
        relief, mobility and accessibility

  In Alameda County, as in other places throughout
  California, the current transportation system is facing
  challenges related to demand and investments. Alameda
  CTC is focused on effective planning, coordination and
  leveraging resources to address transportation priorities.

  Through a combination of measured risks, diligent
  project management and the proactive pursuit of
  funding opportunities, the Alameda CTC and partners
  have fulfilled the promise to Alameda County voters
  by delivering local projects and programs effectively.

  Leveraging the successes of both agencies, the Alameda
  CTC will continue to deliver projects and programs
  as stipulated by voters and as developed through the
  countywide planning processes.


                                                                                     Page 53
Alameda County Transportation Commission                                            Strategic Business Plan 2011 | 9
  Operating Principles

  WE ACCOMPLISH THE MISSION OF THIS
  AGENCY THROUGH THE APPLICATION OF
  THE FOLLOWING PRINCIPLES:



  1. Public Service
  Serve the public in the development and delivery of
  transportation programs and projects




  2. Accountability
  Plan, fund and deliver programs and projects in an open,
  transparent, efficient and effective manner




  3. Relationships
  Foster cooperative relationships/partnerships with federal,
  state, regional, local partners and other stakeholders




                                                                  Page 54
Alameda County Transportation Commission                        Strategic Business Plan 2011 | 11
  STRATEGIC GOAL #1                        Identify transportation needs
                                           and opportunities to formulate
 PLANNING                                  strategies and solutions



                                           Objective 1
                                             Monitor and analyze transportation
                                             system performance




                                           Objective 2
                                             Develop long range transportation plan




                                           Objective 3
                                             Collaborate with state, regional, county and local
                                             planning agencies to integrate transportation planning
                                             with air quality and land use




                                           Objective 4
                                             Conduct corridor and sub-area studies




                                           Objective 5
                                             Inform funding policy at federal, state and regional
                                             levels to align with identified needs




                                                                         Page 55
Alameda County Transportation Commission                               Strategic Business Plan 2011 | 13
 STRATEGIC GOAL #2                         Evaluate, prioritize and
 FUNDING                                   fund programs and projects




                                           Objective 1
                                             Advise and influence funding agencies’
                                             programming policy




                                           Objective 2
                                             Effectively program available funding




                                           Objective 3
                                             Increase funding levels for transportation in
                                             Alameda County




                                                                         Page 56
Alameda County Transportation Commission                               Strategic Business Plan 2011 | 15
 STRATEGIC GOAL #3                         Deliver quality programs and
                                           projects on schedule and
 DELIVERY                                  within budget



                                           Objective 1
                                             Monitor implementation with oversight and reporting




                                           Objective 2
                                             Support program and project implementation with
                                             assistance where appropriate




                                           Objective 3
                                             Exercise and promote best management practices in
                                             the delivery of programs and projects




                                                                        Page 57
Alameda County Transportation Commission                              Strategic Business Plan 2011 | 17
  Operating Principles

  We accomplish the mission of this agency through the
  application of the following principles:




  1. Public Service
  Serve the public in the development and delivery of
  transportation programs and projects




  2. Accountability
  Plan, fund and deliver programs and projects in an open,
  transparent, efficient and effective manner




  3. Relationships
  Foster cooperative relationships/partnerships with federal,
  state, regional, local partners and other stakeholders




                                                                  Page 58
Alameda County Transportation Commission                        Strategic Business Plan 2011 | 19
The Alameda CTC plans, funds and delivers a broad
range of transportation projects and programs to enhance
mobility throughout Alameda County. It coordinates
countywide transportation planning, attracts state and
federal funding for project implementation, and delivers
the Expenditure Plan for Measure B, the half-cent sales
tax approved by 81% of county voters in 2000. For
information regarding the various projects, programs and
activities, visit us on the web at www.alamedactc.com.


           Alameda County
      Transportation Commission
          www.alamedactc.com




                    Alameda County Transportation
                           Improvement Authority
                        1333 Broadway, Suite 300
                         Oakland, CA 94612-1921
                           Phone: (510) 893-3347

                       Alameda County Congestion
                             Management Agency
                         1333 Broadway, Suite 220
                          Oakland, CA 94612-1921
                            Phone: (510) 836-2560
                               Page 59
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                                 Page 60
                                                                                    Attachment B

                     Proposed Alameda CTC Positions for Salary Survey 

                                                March 2011 

 Grade                         Position/Classification                  Min    Med        Max 

          Deputy Director of Projects and Programming                                        

          Director of Finance                                                                

          Principal Transportation Engineer                                                  

          Deputy Director of Planning                                                        

          Deputy Director of Policy, Legislation, and Public Affairs                         

          Senior Transportation Engineer                                                     

          Principal Planner                                                                  

          Project Controls Engineer                                                          

          Senior Planner                                                                     

          Associate Transportation Engineer                                                  

          Accounting Manager                                                                 

          Office Manager                                                                     

          Contract Procurement Analyst                                                       

          Contract Compliance and Business Outreach Analyst                                  

          Assistant Engineer/Assistant Planner                                               

          Clerk of the Commission                                                            

          Senior Accountant                                                                  

          Accountant                                                                         

          Administrative Assistant                                                           

          Executive Assistant                                                                

          Receptionist                                                                       
  




                                                                                    Page 61
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                                 Page 62
                                                                                                                                         Attachment C
                                                       Alameda County Transportation Commission
                                                             Employee Transition Schedule
                                                                 As of February 2011
          No.                        Item                                Goal Date           Lead Responsibility                  Comments
                Retirement/PEMCHA/Health  and Leave 
           1                                                    ACTC – 10/28/10            Executive Director         Completed
                Benefit Framework Approval
                                                                                           Executive Director 
           2    Submit CalPERS Questionnaire(s)                 November 2011              Finance Director           Completed
                                                                                           Accounting Manager
           3    Finalize ACTC organization structure             January ‐ February 2011   Executive Director         Completed
                Issue RFP for Health and Related Benefits 
           4                                                     January‐February, 2011    Finance Director
                Procurement Process.
                Conduct salary and benefit survey for specified                            Human Resources 
           5                                                     March 2011
                positions                                                                  Consultant
                                                                                                                      Legal Counsel will assist.  
                CalPERS questionnaires and actuarial cost 
           6                                                    March ‐ April 2011         CalPERS                    Accounting Manager to monitor 
                studies returned to Agency.
                                                                                                                      progress.
                                                                                           Executive Director      
           7    Review CalPERS Study Results                    April ‐ May 2011           Finance Director
                                                                                           HR Consultants
                Present Agency organization structure to Board 
           8                                                    February 2011              Executive Director
                as information

                 Amend Salary and Benefit Resolution to:
                                                                                           Executive Director
                ∙ Adjust salaries for impacted positions         April ‐ May 2011
           9                                                                               Finance Director            HR  FAC and Commission Approval
                ∙ Unify and reconcile leave and related policies
                                                                                           Consultant
                ∙ Establish cafeteria benefit plan

                Select and approve benefit provider(s) to begin                            Human Resources 
          10                                                     March – June 2011
                on 7/1/11                                                                  Consultant
                Make appointments to new positions, where                                                             Some positions will be subject to 
          11                                                     March ‐‐ June 2011        Executive Director
                applicable                                                                                            recruitment processes.
                Approve Retirement and PEMCHA Plans, and                                   Executive Director      
          12                                                     November 2011                                        Completed




Page 63
                HRA                                                                        Finance Director
                                                   Alameda County Transportation Commission
                                                         Employee Transition Schedule
                                                             As of February 2011
          No.                      Item                               Goal Date     Lead Responsibility            Comments
                Establish Health Reimbursement Arrangement 
          13                                                  April ‐‐ May 2011    Finance Director
                (HRA) System
                Send letters to employees offering 
                                                                                   HR Consultant    
          14    employment, with terms, to move to ACTC as    March ‐‐ June 2011
                                                                                   Executive Director
                of 7/1/11
                Adopt  CalPERS resolutions for ACTC 
          15                                                  May ‐‐ June 2011     Executive Director     FAC and Commission Approval
                employees
          16    Transition employees to ACTC                  March ‐‐ June 2011




Page 64
                               Attachment D




ALAMEDA COUNTY CONGESTION
MANAGEMENT AGENCY (CMA)
ALAMEDA COUNTY TRANSPORTATION
IMPROVEMENT AUTHORITY (ACTIA)
CONSOLIDATION AND/OR SERVICE SHARING
ANALYSIS

July 2009




                                Page 65
Page 66
                                                          July 30, 2009


Mr. Dennis Fay
Executive Director
Alameda County Congestion Management Agency
1333 Broadway, Suite 220
Oakland, CA 94612

Ms. Christine Monsen
Executive Director
ACTA/ACTIA
1333 Broadway, Suite 300
Oakland, CA 94612


Dear Mr. Fay and Ms. Monsen:

Thank you for the opportunity to engage in this study to identify service sharing and/or
consolidation opportunities between the Alameda County Congestion Management Agency and
the Alameda County Transportation Improvement Authority.

This project report provides recommendations regarding opportunities between your agencies
which we believe would improve the efficiency and effectiveness of project and program
delivery. The greatest opportunities for consolidation and efficiency improvement are financial
services, administrative services and capital project delivery. The report also recommends the
development of an implementation plan to prepare and implement an orderly transition, should
the boards of each respective agency choose to finally move forward with a merger or
integration.


                                                          Sincerely,




                                                          Geral Newfarmer
                                                          President and CEO




2107 North First Street Suite 470     www.managementpartners.com                   408 437 5400
San Jose, CA 95131                                                                 Fax 453 6191
                                                                                   Page 67
Page 68
Alameda County Congestion Management Agency
Alameda County Transportation Improvement Authority
Consolidation and/or Service Sharing Analysis




                TABLE OF CONTENTS

                EXECUTIVE SUMMARY ........................................................................... 1 
                THE BUSINESS OBJECTIVE ................................................................... 5 
                  AGENCY/AUTHORITY MISSIONS ................................................................. 5 
                  ORGANIZATIONAL CONTEXT ...................................................................... 9 
                  ORGANIZATIONAL CULTURE .................................................................... 12 
                  BUSINESS MODEL ................................................................................... 14 
                PROJECT APPROACH ........................................................................... 17 
                  INTERVIEWS AND STAFF QUESTIONNAIRE ................................................ 18 
                  DOCUMENT REVIEW ............................................................................... 19 
                  PEER AGENCY SURVEY (BENCHMARKING)............................................... 20 
                SERVICE SHARING AND CONSOLIDATION OPPORTUNTIES ........... 29 
                  SERVICE AREAS ..................................................................................... 29 
                  GENERAL ORGANIZATIONAL MANAGEMENT ............................................. 30 
                  PUBLIC OUTREACH ................................................................................. 31 
                  FINANCIAL SERVICES .............................................................................. 33 
                  TRANSITION COSTS/BENEFITS SUMMARY ................................................ 43 
                  ALTERNATIVE ORGANIZATION MODELS .................................................... 48 
                IMPLEMENTATION ................................................................................. 53 
                  IMPLEMENTATION CONSIDERATIONS ........................................................ 54 
                  NEXT STEPS/POTENTIAL SCHEDULE ....................................................... 56 
                CONCLUSION ......................................................................................... 57 
                ATTACHMENT A: SUMMARY OF RECOMMENDATIONS ................... 59 
                ATTACHMENT B: LIST OF PROGRAMS AND PROJECTS ................. 61 
                ATTACHMENT C: LIST OF PROGRAMS AND PROJECTS ................. 63 
                ATTACHMENT D: PEER AGENCY INFORMATION ............................. 61 




                                                                                                       Page 69
Alameda County Congestion Management Agency
Alameda County Transportation Improvement Agency
Service Sharing and Consolidation Analysis


                        TABLES

                        Table 1: Threshold Analysis Investment ................................................... 2 
                        Table 2: CMA Operating Budget and Total Staffing Level ........................ 6 
                        Table 3: ACTA/ACTIA Operating Budget and Total Staffing Level........... 8 
                        Table 4: Self-Help County Transportation Agencies............................... 20 
                        Table 8: Service Matrix - Transition Costs/Benefits Summary ................ 45 




                        FIGURES

                        Figure 1: CMA Board Organizational Structure ........................................ 7 
                        Figure 2: ACTA/ACTIA Board Structures ................................................. 9 
                        Figure 3: Current organizational structure and staffing level of ACTIA.... 11 
                        Figure 4: Current organizational structure and staffing level of CMA ...... 12 
                        Table 5: 2007 County Populations.......................................................... 22 
                        Figure 5: Total Budget in Millions (FY 2008-09) ...................................... 23 
                        Figure 6: Total FTEs per 100,000 Population (FY 2008-09)................... 24 
                        Figure 7: Operating Costs per 1,000 Population (FY 2008-09) ............... 25 
                        Figure 8: Administrative FTEs per 100,000 Population .......................... 26 
                        Table 6: Administrative Services Assistance ......................................... 27 
                        Table 7: Number of Capital Improvement Projects ................................ 28 
                        Figure 9: Administrative Staffing of the Agency/Authority....................... 34 
                        Figure 10: Ten Year Projected Range of Savings ................................... 45 
                        Figure 11: Option 1 – Administrative Integration with Separate Programs
                        and Projects ............................................................................................. 49 
                        Figure 12: Option 2 – Consolidated Administrative Services,
                        Programming Separated, Policy and Planning Aligned and Consolidated
                        Capital Project Delivery ........................................................................... 50 
                        Figure 13: Option 3 – Consolidated Administrative Services, Capital
                        Project and Programming Integrated, Policy and Planning Aligned ........ 51 




                                                                                                                   Page 70
        Alameda County Congestion Management Agency
        Alameda County Transportation Improvement Authority
        Service Sharing and Consolidation Analysis




                EXECUTIVE SUMMARY

                        In January 2009, the Alameda County Transportation Improvement
                        Authority (ACTIA) and the Alameda County Congestion Management
                        Agency (CMA) initiated a study to identify service sharing and/or
                        consolidation opportunities between the two agencies. This effort was
                        undertaken to determine if critical mission responsibilities could be
                        delivered in a more streamlined and cost effective manner.

                        Like most public agencies throughout the country, the CMA and ACTIA
                        are faced with ongoing challenges in sustaining the delivery of their
                        programs and projects. The severe economic downturn has negatively
                        impacted State and local funding sources, but has also put these
                        agencies on the “front-lines,” via national stimulus programs aimed at
                        spurring infrastructure spending for job creation. These factors have
                        made both performance and efficiency more critical than ever for both
                        agencies. While each agency continues to aggressively implement
                        capital projects and transportation programs, this review provided an
                        opportunity to examine whether services and functions currently
                        supported within each separate agency could be shared or integrated in a
                        way that will improve the efficiency and effectiveness of project and
                        program delivery.

                        This analysis concludes that there are in fact attractive opportunities for a
                        variety of service sharing and integration efforts. The greatest
                        opportunities for consolidation and efficiency improvement are financial
                        services, administrative services, and capital project delivery.

                        This report summarizes opportunities to reduce costs by sharing
                        administrative, financial and project management functions, create a net
                        positive impact of improved efficiency in each agency, and enable both
                        agencies to better serve the public interest. Additionally, this report
                        describes some of the issues involved in consolidating functions or
                        agencies, and outlines options for new organizational models. A
                        preliminary timeline for implementation is included as well, should the
                        boards of each organization decide to proceed.

                        This engagement was designed as a threshold analysis, meaning that it
                        was intended as a high level examination of opportunities for service
                        sharing and/or consolidation which could be compelling enough to move
                        forward with an implementation analysis and plan. As a result of our
                        examination, Management Partners believes that it is highly probable that



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                         there are significant cost benefits to be achieved through service sharing.
                         Additionally, the threshold analysis indicated that a complete merger or
                         integration of the agencies would result in a united and strengthened
                         agency, one better positioned to deliver programs and projects, in the
                         highly competitive environment which now exists. Both agencies are
                         already considered exemplary and successful in their fields within the
                         State of California. However, a merged agency would enable a united
                         front to be presented when interfacing with regional, state and federal
                         agencies and elected officials and allow even more influence and
                         streamlined operations.

                         Our analysis, as summarized in Table 1, shows that an investment in
                         service sharing and consolidation is sufficiently compelling to consider the
                         development of an implementation plan as the next step in the process.
                         Details of the threshold analysis are described more in-depth later in the
                         Transition Costs/Benefits Summary section of this report.

                         TABLE 1: THRESHOLD ANALYSIS INVESTMENT




                 Project                           One Time Transition    Ongoing Annual
                 Phase      Calendar Year          Cost Range             Savings
                 I          Second quarter 2010        $220,000-270,000           $151,000-171,000

                 II         Fourth quarter 2011                $230,000                    $160,000

                 III        First quarter 2011         $120,000-210,000           $280,000-460,000

                 IV         2013                               $110,000                    $100,000

                 Total                                 $680,000-820,000           $643,000-891,000


                         Three organizational concepts for a new organizational structure are
                         described in this report. They are provided as representational concepts
                         for how a combined or merged organization might be organized for
                         purposes of carrying out the combined work program of both agencies.
                         These three concepts are:

                         Concept 1:   Consolidated Administrative Services, Separate Agency
                         Programs and Projects

                         Concept 2:   Consolidated Administrative Services, Programming
                         Separated, Policy and Planning Aligned, Consolidated Capital Project
                         Delivery

                         Concept 3:   Consolidated Administrative Services, Capital Project and
                         Programming Integrated, Policy and Planning Aligned



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                        Management Partners is also recommending four general phases for
                        implementation, should the respective agency and authority boards
                        choose to move forward with the project. These phases may be
                        ambitious, but should be feasible:

                            •    Calendar Year 2010 Quarter 2 – Financial and administrative
                                 services integration
                            •    Calendar Year 2010 Quarter 4 – Merger of executive
                                 management function
                            •    Calendar Year 2011 Quarter 2 – Merger of program and project
                                 delivery functions
                            •    Mid 2013 – Collocation of staff (unless subleases can be found or
                                 other lease changes can be negotiated earlier)

                        A complete merger of both the CMA and ACTIA Board of Directors
                        cannot occur until the enabling or statutory legislation for both agencies is
                        amended to allow for a consolidated board. However, this is not critical
                        for the agencies to consider an organizational merger or consolidation of
                        services. The re-authorization of the half-cent sales tax is being
                        considered for 2012, representing one opportunity to address the merger
                        of the boards. At that time, legislation could be incorporated into the
                        measure that would authorize administration of the new program to be
                        administered by a merged agency. While the sales tax is under
                        consideration by the voters, the CMA could develop and present an
                        amendment to member agencies of the joint powers authority to allow for
                        a merged agency with additional duties and responsibilities. A new
                        governing board structure could also then be developed and presented as
                        part of each of these efforts.

                        Alternatively, the boards could decide to pursue a consolidated board
                        structure earlier through means available by the authorities of their
                        existing enabling legislation, should they so choose. Integration of the
                        organizations which support the CMA and ACTIA boards though is not
                        dependent on the merger of the board structures. Integration of both
                        agencies could occur without a merger of the governing boards through a
                        contractual relationship between the two agencies. The staff of a merged
                        agency would continue to provide support to all three boards (CMA,
                        ACTA and ACTIA). While there may be merit to considering the
                        consolidation of the board structure earlier rather than later, the policy
                        and political issues could inadvertently divert the effort needed to achieve
                        the efficiencies that will result with integration of the agencies.

                        Mergers or consolidations require a commitment to long term goals. They
                        also require an upfront investment to move forward and once the project
                        has begun, the process should move deliberately in accordance with an
                        agreed upon implementation plan and schedule. Additionally, and equally
                        important, there are always significant employee relations issues to
                        consider as the process proceeds. Retention and recruitment of quality
                        staff is essential in the delivery of transportation programs and projects,



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                        as is ensuring that the capability is in place for strategically planning for
                        the right projects in the competitive environment of transportation funding.

                        Finally, the report recommends the development of an implementation
                        plan as the next step in a potential consolidation or merger, should the
                        respective boards of both agencies believe the information merits moving
                        forward. An implementation plan would be brought back to the boards for
                        consideration before any final decisions regarding implementation would
                        be made.




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                THE BUSINESS OBJECTIVE


                        While the missions of the CMA and ACTIA are different, there are
                        similarities between the organziations. Both administer and audit large
                        amounts of tax monies which are either applied to capital projects,
                        planned, programmed or passed through to other local agencies or non-
                        profit organizations based on enabling legislation or funding criteria. Both
                        agencies must monitor and audit the funds they disperse in compliance
                        with regulations associated with the funding. Both agencies engage in a
                        variety of special projects and engineering studies of different types, and
                        both are active in the pursuit of transportation funding from regional, state
                        and federal sources to supplement their projects and programs. Finally,
                        both agencies are charged with developing and implementing projects
                        that support the Countywide Transportation Plan and reduce congestion
                        within Alameda County and the region.


                        Agency/Authority Missions
                        In many urban counties, the missions of congestion management
                        agencies and organizations that have enacted half-cent transportation
                        improvement sales tax measures have been integrated into one agency.
                        In Alameda County, carrying out these missions has been provided by
                        two different agencies. The Alameda County CMA and the Alameda
                        County Transportation Authority (ACTA)/Alameda County Transportation
                        Improvement Authority (ACTIA) are two separate agencies with critically
                        related core missions. To achieve their mandates, each agency must
                        work cooperatively with elected and appointed officials, transit operators,
                        agencies, transportation authorities and agencies at the regional, state
                        and federal levels, as well as an extensive array of citizen and advisory
                        groups. These include:
                            • Caltrans
                            • Metropolitan Transportation Commission
                            • Bay Area Air Quality Management District
                            • Port of Oakland
                            • A range of transit agencies
                            • Bay Area cities and counties
                            • Other CMA organizations
                            • California Transportation Commission
                            • State and federal legislative representatives
                            • Citizen and transportation advisory groups and committees


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                        Alameda County Congestion Management Agency
                        The CMA was created in 1991 in response to a measure approved by the
                        voters (Proposition 111) in 1990 which required urban counties to
                        designate a congestion management agency to coordinate transportation
                        planning and funding within the county and region. The CMA is a joint
                        powers authority among Alameda County, its 14 cities, and the two
                        largest transit operators in the County. The agency’s purpose is to
                        manage congestion through the coordination of transportation planning
                        and funding programs within Alameda County and adjacent counties. As
                        the agency ultimately responsible for congestion management in the
                        County, the CMA plans, funds and implements projects and programs for
                        highway and transit expansion, local road improvements, transit
                        maintenance and bicycle and pedestrian facility improvements.

                        Proposition 111 authorized a state fuel tax to fund local, regional and
                        state transportation projects and services. Through the years since its
                        creation, the CMA has coordinated the funding and delivery of
                        transportation improvement projects through a wide range of other voter
                        approved, regional, state and federal funding sources in collaboration with
                        other transportation agencies and authorities.

                        The following table represents the 2009 operating budget and number of
                        employees at the CMA.

                        TABLE 2: CMA OPERATING BUDGET AND TOTAL STAFFING LEVEL


                        2008-2009 ACCMA Operating Budget Summary

                        Revenue                                                      $ 54,391,828

                        Expenses

                                 Capital Projects                                    $ 46,400,000

                                 Plans and programs                                  $ 2,447,000

                                 Administration*                                     $ 5,294,770

                        Total                                                        $ 54,141,770



                        Total Staff                                                              25


                        *Includes full time Agency program and project delivery staff.

                        Attachment B represents a listing of current programs and projects in the
                        CMA work program.


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                        The CMA operates under an 18 member board, representing Alameda
                        County, its 14 cities, AC Transit and BART. The governing body of each
                        jurisdiction or agency selects a representative to serve on the CMA
                        board. Figure 1 represents the CMA Board of Directors structure.

                        FIGURE 1: CMA BOARD ORGANIZATIONAL STRUCTURE




                        Alameda County Transportation Authority (ACTA) and the
                        Alameda County Transportation Improvement Authority
                        (ACTIA)
                        The transportation sales tax agencies in Alameda County were created
                        following the approval of taxes dedicated to the implementation of a
                        defined set of transportation projects and programs in the county. ACTA
                        was the authority created to implement the first measure and was later
                        followed by an extension of the half-cent cent sales tax measure with a
                        slightly different political structure, under a new authority named ACTIA.
                        The same staff organization currently supports both programs which we
                        will refer to as the “Authority” in this report.

                        ACTA was first created in 1986 following approval of Measure B, or the
                        first half-cent sales tax measure in support of a specific set of
                        transportation improvements and programs with the County. The mission
                        was to administer the funds and ensure project and program delivery. The
                        1986 tax is no longer collected; however ACTA still operates while the
                        capital projects enabled by the measure are completed with ACTIA
                        providing staff and services.



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                        Voters reauthorized the half-cent sales tax in 2000 to deliver a new set of
                        transportation programs, projects and services to Alameda County; the
                        revenue collection authority expires in 2022. As a result, ACTIA was
                        created to deliver the new projects and programs. Sixty percent of the
                        2000 Measure B net revenue is allocated to five separate transportation
                        programs as pass-throughs and grants, maintenance and improvements
                        to transportation services and facilities. Forty percent of the funds are
                        allocated to capital projects.

                        ACTIA’s expenditure plan allocated a total of 4.5% of revenues generated
                        for all administrative costs. In addition, the enacting legislation requires a
                        cap of 1% of revenue for administrative staff salaries and benefits.

                        Table 3 provides a summary of ACTIA’s Fiscal Year 2008-09 operating
                        budget, as well as the authorized staffing levels. Approximately 39.6% of
                        ACTIA’s expenditures are pass-through payments and grants to other
                        agencies, such as the county, cities and transit agencies or to non-profit
                        organizations. Allocations can vary from year to year.

                        TABLE 3: ACTA/ACTIA OPERATING BUDGET AND TOTAL STAFFING LEVEL

                        FY 2008-09 ACTA/ACTIA Operating Budget Summary
                        Revenue                                   $122,909,450
                        Expenses
                               Capital Projects                    $ 83,972,523
                               Pass-through programs               $ 53,793,719
                               Reserves/Grants                      $ 2,684,131
                               Administration                     $ 4,780,754*
                        Total                                     $145,231,127

                        Total Staff                                                         9

                        *Includes full time Authority program and project delivery staff.

                        Attachment C represents a listing of current programs and projects in the
                        ACTA/ACTIA program of authorized expenditures.

                        ACTA is governed by an independent nine-member board, including the
                        five members of the Board of Supervisors, three representatives
                        appointed by the Alameda County Mayor’s Conference and one
                        representative designated by the Mayor of Oakland. Again, through the
                        enabling legislation, ACTIA is governed by an 11-member board with the
                        same representation as ACTA, plus two additional appointments from the
                        Mayor’s Conference. All are elected officials in Alameda County. Figure
                        2 shows the board structure of ACTA/ACTIA.




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                        FIGURE 2: ACTA/ACTIA BOARD STRUCTURES




                                                                                         


                        Organizational Context
                        An analysis of service sharing and consolidation opportunities including a
                        possible merger of the two agencies must begin with an understanding of
                        the organizational context within which each of the two agencies
                        operates. Before discussing, service sharing, consolidation or most
                        importantly a potential merger, one must recognize that there are two
                        separate agencies which have operated successfully for a long period of
                        time through all levels of government. Their success has been due to a
                        range of factors, including leadership by elected officials and staff,
                        community outreach, and voter support.




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                        ACTA and ACTIA are well on their way to implementing two half-cent
                        sales tax transportation measures. This has high voter approval. A
                        renewal of the half-cent tax, with a third set of programs and projects, is
                        anticipated to be placed before the voters within the next three to five
                        years. Similarly, CMA continues to meet their state mandate to reduce
                        congestion in Alameda County through a combination of transportation
                        programs and capital projects, and a recognized, aggressive approach to
                        programming of capital projects and funding. Over time, both the CMA
                        and ACTIA have developed organizational cultures, structures and
                        staffing which have built on their strengths and made them successful in
                        achieving their missions. Any implementation of service sharing and
                        consolidation must be done in such a way that preserves strengths of
                        each agency.

                        Strengths and Core Functions of Both Organizations
                        Management Partners has identified the following strengths and core
                        functions of each agency to be major contributors to their success.

                        ACTA/ACTIA

                        Strengths: effective and efficient design development and capital project
                        and program delivery; effective and engaged public outreach.

                        Core functions include:
                               Implementation of two voter-approved half-cent transportation
                               sales tax measures
                               Delivery of projects and programs approved by the voters in two
                               Expenditure Plans
                               Provision of quality project, program and administrative services to
                               Alameda County taxpayers
                               Paratransit, bicycle/pedestrian advocacy
                               Community outreach

                        Figure 3 shows the current organizational structure and staffing of ACTIA.
                        ACTIA also employs several consultants to supplement a range of
                        administrative, project management and program tasks and duties.




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                        FIGURE 3: CURRENT    ORGANIZATIONAL STRUCTURE AND STAFFING LEVEL OF
                        ACTIA




                        CMA

                        Strengths:     planning, programming, capital project delivery and
                        coordination of transportation projects and programs Alameda County

                        Core functions include:
                               Serving as Alameda County’s Congestion Management Agency in
                               compliance with state mandates to develop and implement
                               strategies to reduce congestion in Alameda County (Congestion
                               Management Plan)
                               Manage congestion through the coordination of transportation
                               planning and funding programs (Countywide Transportation Plan)
                               and projects within Alameda County (and adjacent counties)
                               which meet regional, state and federal transportation policies and
                               goals
                               Strategically plan, fund and implement projects and programs for
                               highway and transit expansion, local road improvements, transit
                               maintenance and improvements to bicycle and pedestrian facilities

                        Figure 4 shows the current organizational structure and staffing of CMA.
                        CMA also employs several consultants for specific project tasks and
                        ongoing project management and program duties.




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                        FIGURE 4: CURRENT   ORGANIZATIONAL STRUCTURE AND STAFFING LEVEL OF
                        CMA




                        Organizational Culture
                        Some staff of the two agencies expressed a concern that some of the
                        peer agencies with sales tax measures have become entirely driven by
                        the need to execute the sales tax projects. Indeed, timely delivery of
                        promised improvements and programs is critical for maintaining voter
                        trust in such organizations, much less any renewal of a sales tax
                        authority. An exclusive focus on the sales tax measure projects and
                        programs does not always easily allow for responding to newly emerging
                        needs, although ACTIA has been doing this through its grants and
                        programs as well as capital projects by partnering with others to meet
                        changing priorities to the extent their statutory authority permits. Shifting



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                        commute patterns and growth throughout the county, as well as a
                        migration through the years to a diverse array of programs to meet
                        transportation needs have made planning for transportation needs years
                        in advance (when a list of projects is placed before the voters)
                        challenging. Although all of the projects on sales tax projects lists have
                        proven to be of major importance in improving congestion in the county,
                        newly emerging issues have also been extremely problematic to local
                        communities. Elected officials and city and county staff in Alameda
                        County have consistently praised CMA staff for their skill at programming
                        funding to meet these unforeseen needs and rendering assistance where
                        the local agency does not have sufficient labor capacity. CMA is also
                        somewhat dependent on responding to these unforeseen needs to allow
                        it to develop projects and generate grants that both address the needs of
                        local communities and fund its own continuing existence.

                        ACTIA, being driven by its need for continuing success with voters, has
                        adopted a slightly different approach. Although different, that approach is
                        equally successful and also requires attention in any organizational
                        merger. The execution of the projects proposed in the sales tax measure
                        is critical to the success of any future tax initiative and the ongoing
                        existence of ACTIA. As a result, ACTIA has developed efficient project
                        execution processes and procedures intended to deliver the proposed
                        projects in a timely manner and within the resources allocated to them
                        through the sales tax measure. That obligation is not easily sublimated to
                        respond to the crisis of the day. To balance these competing interests,
                        strong project management processes and procedures have been
                        extremely beneficial to both planned and emerging projects. In a single
                        organization, those processes and procedures must be consistent for
                        effective operation and the transparency required of government
                        initiatives.

                        ACTIA’s public outreach program, intended to identify transportation
                        needs at the grass-root level and convey information and progress on
                        approved projects and programs to meet those needs has been
                        recognized as exemplary. Integration of the fruits of this grass-root
                        outreach and the more technical elements of the CMA’s Countywide
                        Transportation Plan and Countywide Congestion Management Plan
                        provide an opportunity for the next level of transportation improvements.

                        Similarly, ACTIA has been commended for finding resources to
                        supplement their capital program delivery as the original sales tax
                        measures almost never can fund projects entirely as they change in
                        scope and priority as implementation moves forward. This responsive,
                        entrepreneurial approach works well, forcing the staff of both agencies to
                        be highly responsive to customer communities as they deliver projects
                        and programs.




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                        Business Model
                        A business model describes how an organization will provide value for the
                        functions and services delivered. It provides a broad framework of
                        informal and formal descriptions to represent the core aspects of the
                        business (transportation planning and programs, capital project delivery)
                        including a clear definition of purpose, strategies, organizational structure
                        and operational processes and procedures. Fundamental to an effective
                        business model are its revenues and cost structure as they enable the
                        broader functions and services of the organization.

                        The ACTIA and CMA organizations were originally created and are
                        defined, along with their respective boards, by the enabling legislation
                        through which each was created. The respective Boards hired and
                        structured an organization of staff to implement their statutory and voter
                        approved mandates through the execution of their programs, projects and
                        transportation planning. The ACTIA and CMA business models evolved
                        during different periods in the 1980’s and 1990’s on the basis of their
                        defined missions and core functions, under either a voter approved
                        mandate or state statute, or both. A policy choice was made by the
                        boards not to integrate the two functions as was done in other urban
                        counties which passed half-cent sales tax measures for transportation
                        purposes. While the current design has allowed each organization to
                        function well within its scope, as recognized by board members of each, it
                        may not now represent the most cost-effective platform to the residents of
                        Alameda County upon which to plan and deliver programs and capital
                        projects.

                        There is little question that the Alameda County transportation agencies
                        have been highly successful in exploiting resources for roadway and
                        transit improvements and reducing congestion in the county. At the same
                        time, the two agencies have functions and core missions – reducing
                        congestion in Alameda County – so inextricably linked that there has
                        inevitably evolved some redundancies and resulting inefficiencies
                        between them. Additionally, as is common when there are two
                        organizations with some overlapping roles, there are periodic role
                        conflicts that can distract from service delivery and optimal organizational
                        effectiveness.    Despite a great deal of collaboration between the
                        organizations, these occasional conflicts may impede strategic integration
                        of planning efforts with project and program design and delivery.

                        There are now opportunities to improve both the cost efficiency of the two
                        organizations and possibly the effectiveness through different
                        organizational relationships. The areas of greatest opportunity for
                        consolidation and efficiency improvement are financial services,
                        administrative services, and capital project delivery. In order to capitalize
                        on these opportunities, the boards and executive management will have
                        to decide on a different business model than the current ones deployed.




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                        The organizational structure of the agencies will necessarily be modified
                        regardless of the extent of any merger. Even if the merger is limited to
                        integrating certain financial and administrative services, there will be
                        organizational and staff transitions. New career development
                        opportunities should also result as the organizations take advantage of
                        the strengths of collaboration or combined services to improve efficiency.
                        The organizational structure can be recast to provide the type of strategic
                        integration alluded to previously. For example, future sales tax measures
                        can and should emanate from the Countywide Congestion Management
                        Plan and Countywide Transportation Plan, producing a highly directed
                        work plan for the sales tax revenues. The business model should provide
                        a clear definition of purpose, strategies, organizational structure,
                        operational processes and procedures to meet these ends.

                        The business model of a consolidated agency should build upon the
                        strengths of both the CMA and ACTIA:
                               ACTIA:      Capital project design, development and delivery;
                               consensus building; community outreach, program and grant
                               management, especially to the senior and disabled communities;
                               CMA: Transportation planning, programming in a complex and
                               highly competitive transportation funding environment; capital
                               project design development; an entrepreneurial approach to
                               project delivery; finance and administrative capacity.

                        Potential Cost Savings through Merger
                        Fundamental to an effective business model are its revenues and cost
                        structure as enablers of the broader functions and services. In the course
                        of this analysis, Management Partners identified a conservative estimate
                        of $650,000 in annual cost savings following a merger of operations (see
                        Service Sharing and Consolidation Opportunities section later in this
                        report). This savings includes actual increases in expenses in certain
                        areas to improve specific services. The majority of these savings can be
                        realized in two to three years with the remainder resulting from about
                        $100,000 in savings from space rental which may not be recognized until
                        the leases expire in 2013. These savings require an expenditure of
                        approximately $680,000 over two to three years in one-time transition
                        costs. These figures are expressed in terms of the combined costs of
                        both organizations.

                        During the transition to a complete integration or merger, and to be
                        successful in a service sharing arrangement such as is being proposed
                        initially, it must be recognized that neither organization should be allowed
                        to become a burden to the other. One organization cannot shift its costs
                        to the other without recognition of the impact and providing resources to
                        enable the program to be successful. The other organization cannot
                        burden the cost of providing services with all of its current organizational
                        overhead. Current overhead is part of each organization’s burden and
                        would remain if no service sharing was undertaken. An implementation
                        plan must be constructed to recognize that each organization can



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                        improve its cash position slightly through reasonable cost sharing, but
                        neither organization should rely on the other for a revenue stream to
                        support its core mission.

                        Ultimately, the business model of a consolidated agency will require
                        focused attention by an Executive Director and the combined boards in
                        order to preserve the strengths of the each agency within a consolidated
                        organization that has a more efficient cost structure. Our analysis has
                        indicated a highly integrated approach leading to the eventual merger of
                        the organizations has the greatest potential to deliver both cost efficiency
                        and service improvements. Lesser degrees of service sharing are
                        possible but the challenges of coordinating across organizational
                        boundaries may mitigate some of the advantages being sought, resulting
                        in an actual loss of productivity. Regardless, the need for an effective
                        business model is critical and attainable.




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                PROJECT APPROACH

                        This section summarizes Management Partners’ approach to the project.
                        To identify consolidation and/or service sharing opportunities, the
                        threshold analysis focused on determining how the commonalities
                        associated with each agency’s organizational structure, operational
                        practices and business policies and processes, and resources support
                        the respective mission, goals and strategic direction. Management
                        Partners’ approach to assessing the service sharing opportunities began
                        with a careful learning phase and a thorough understanding of the
                        management, operations, staffing, organizational culture, and the use of
                        resources in both the CMA and ACTIA organizations. We used standard
                        analytical and management assessment techniques. We gathered
                        information through interviews, documents, contracts, benchmarking, and
                        a review of business and administration practices implemented by each
                        agency. To identify service sharing and integration opportunities, we
                        analyzed data provided by the respective finance and administrative
                        functions, human resources services as well as operational systems,
                        roles and responsibilities. We also used information obtained from other
                        congestion management or transportation improvement agencies or
                        authorities regarding organizational structure, program and project
                        delivery, and levels of staffing to support each agency’s mission.

                        Management Partners began the project by inventorying current services
                        and defining potential opportunities for sharing services, integrating
                        functions and consolidating operations. We gained an understanding of
                        both ACTIA’s and CMA’s structure, role and mission within the regional
                        and state transportation network, and how each agency’s programs and
                        capital projects are delivered to the community. Confidential, individual
                        interviews were conducted with agency and authority senior and mid-level
                        managers and appointed and elected officials for each agency. We
                        reviewed a range of documents including the Agency’s and Authority’s
                        budgets, various databases maintained by each, program and capital
                        project delivery listings, and financial, information technology services
                        and engineering services contracts.

                        In the effort to analyze opportunities and impacts of service sharing or
                        merger of the organizations, Management Partners developed a “service
                        matrix.” The service matrix is a list of services that could be shared
                        between the two organizations. The service matrix is cross-referenced
                        with the current cost of providing those services, the ongoing costs of
                        providing those services for both organizations, and projected transition



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                        costs. The services include such administrative services as general
                        management, rent, financial management services, human resources
                        support, information technology costs, and clerical support. The service
                        matrix also included an assessment of operational costs which, if shared,
                        might provide opportunities for increased effectiveness or cost efficiency
                        such as public outreach programs, Project Controls Team and other
                        consultant support.

                        Our recommendations regarding service sharing and consolidation
                        opportunities resulted from this analysis. Please see Attachment A for a
                        summary of these recommendations.


                        Interviews and Staff Questionnaire
                        Management Partners began the project by gaining an understanding of
                        the scope of each agency’s program and project delivery commitments
                        and obligations, the organizational structure, staffing levels, and
                        administrative and financial services functions. Twelve interviews were
                        conducted with executive, senior and mid-management staff from both
                        the agency and the authority. In addition, we conducted eight interviews
                        with elected officials from both Boards of Directors. The lead contract
                        legal counsel for both agencies was also interviewed.

                        The overarching interests expressed through the interviews included:

                            •   Ensuring that Alameda County’s place and role in the regional,
                                state and federal transportation arena continues to be successful
                            •   Understanding clearly the opportunities, costs and benefits of
                                service sharing or a merger of the agencies
                            •   Preserving those elements of the character or spirit of each
                                organization which makes them each successful in their mission
                            •   Ensuring projects continue to move forward and programs
                                implemented at their current pace and success without
                                interruption
                            •   Improving communication between the two agencies
                            •   Improve project management and controls developing consistency
                                across the organizations
                            •   Streamlining and integrating the county’s overall policy and
                                leadership to exploit opportunities at the regional, state and
                                federal levels
                            •   Recognizing that the organizational culture of each agency is
                                unique and important to the success of transportation programs
                                and capital project delivery in the county
                            •   Any transition should be carefully orchestrated to be smooth
                                relying on the professionalism and dedication of staff to overcome
                                differences in the organizational culture




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                            •    The importance and role of employee relations in implementing
                                 any service sharing or potential merger

                        To gain the perspective of agency and authority staff, Management
                        Partners also issued a confidential questionnaire to the senior staff of
                        CMA and ACTIA. The purpose of the questionnaire was to elicit
                        information regarding the administrative or business process which best
                        support their ability to perform the job and to determine what additional
                        services in those same areas would assist them. The questionnaire also
                        sought comment regarding duplication of business processes between
                        the two agencies and projects or tasks that ought to be completed but
                        cannot as a result of workload. Five staff from ACTIA and six from CMA
                        completed the questionnaire.

                        The general themes which emerged from the staff questionnaire included:
                           • The majority of respondents believe they work well as a team,
                              although 26% of those responding disagreed.
                           • A significant number (32%) of those responding did not agree that
                              they have the technology to do their jobs efficiently.
                           • Redundancies between the two agencies exist and there are
                              opportunities for service sharing, improvements and efficiencies.
                              Areas identified included:
                                      Redundancies in the Project Controls Teams and potential
                                      for efficiencies even though they work on different capital
                                      projects
                                      Website management
                                      Streamlining contract procurement and management;
                                      expanding opportunities in this area
                                      Financial analysis, reporting and general services
                                      Human Resources
                                      Administrative policies and procedures
                                      An improved long term, integrated strategy for future
                                      transportation projects and programs
                                      Community outreach


                        Document Review
                        Information was obtained regarding organization structure, staffing levels,
                        business processes and services, administrative tasks, human resources
                        and budget. Management Partners reviewed budget data and project
                        lists, organizational charts and other systems, procedures and business
                        information which may influence operational effectiveness and successful
                        project and program delivery, including:
                             • Current organization charts
                             • Copies of enabling legislation and any subsequent modifications
                             • FY 2008/09 budget and associated documents
                             • Current revenue projections
                             • Financial documents related to current and future funding


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                            •   Budget summaries and other budget reports
                            •   Lists of staff and titles, including documentation regarding the
                                positions and their functions
                            •   Employee compensation plans
                            •   Current program listings
                            •   Current capital project delivery lists
                            •   Lists of professional service contracts and miscellaneous
                                supporting documents
                            •   Lists of computer hardware and software products owned and
                                services used by each agency
                            •   Compensation and benefit package documentation



                        Peer Agency Survey (Benchmarking)
                        As part of our analysis, Management Partners conducted a benchmarking
                        survey to understand how ACTIA and CMA compare to other peer
                        agencies whose core mission is either implementation of a sales tax
                        measure in support of transportation improvements or congestion
                        management or both. There are 19 “Self-Help” counties in California
                        where sales tax revenues are dedicated to transportation improvements.
                        The use of those funds varies to some degree; in some, the sales tax
                        primarily funds public transportation programs, in others, road projects
                        are a primary mission.

                        TABLE 4: SELF-HELP COUNTY TRANSPORTATION AGENCIES

                                                            Title of Sales Tax     Congestion
                                                           Authority (If not the   Management
                          Member Organizations of "Self     same as member           Agency
                            Help" Counties Coalition          organization)           Also
                         Alameda County Transportation                                 No
                         Agency/Alameda County
                         Transportation Improvement
                         Authority
                         Contra Costa County                                            Yes
                         Transportation Authority
                         Fresno County Transportation                                   No
                         Authority
                         Imperial County Local                                          No
                         Transportation Authority
                         Los Angeles County               Los Angeles County            Yes
                         Metropolitan Transportation      Transportation
                         Authority (LAMTA)                Commission
                         Madera County Transportation                                   No
                         Authority
                         Marin County Transportation                                    Yes
                         Authority




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                                                                Title of Sales Tax     Congestion
                                                               Authority (If not the   Management
                             Member Organizations of "Self      same as member           Agency
                               Help" Counties Coalition           organization)           Also
                            Orange County Transportation                                  Yes
                            Authority
                            Riverside County                                              Yes
                            Transportation Commission
                            Sacramento County                                             No
                            Transportation Authority
                            San Bernardino Associated         San Bernardino              Yes
                            Governments (SANBAG)              Transportation
                                                              Authority
                            San Diego Association of          San Diego County            Yes
                            Governments (SANDAG)              Regional
                                                              Transportation
                                                              Commission
                            San Francisco County                                          Yes
                            Transportation Authority
                            San Joaquin Council of            San Joaquin                 Yes
                            Governments                       Transportation
                                                              Authority
                            San Mateo County                                              No
                            Transportation Authority
                            Santa Barbara Council of          Santa Barbara County        Yes
                            Governments (CAG)                 Local Transportation
                                                              Authority
                            Santa Clara Valley                                            Yes
                            Transportation Authority
                            Sonoma County Transportation                                  Yes
                            Authority
                            Tulare County Association of      Tulare County               Yes
                            Governments                       Transportation
                                                              Authority

                        Four agencies were identified by ACTIA and CMA staff as comparable to
                        Alameda County both in similarity of missions and regional transportation
                        interests. The following agencies were chosen due to their similarities to
                        ACTIA and CMA, as well as their regional proximity to both agencies:
                            • Contra Costa Transportation Authority (CCTA)
                            • San Francisco County Transportation Authority (SFCTA)
                            • City/County Association of Governments of San Mateo County
                                (San Mateo County C/CAG)
                            • Santa Clara Valley Transportation Authority (VTA)

                        To obtain comparison data, Management Partners used publicly available
                        information on agency websites; developed and sent questionnaires to
                        each agency; and conducted phone interviews with agency employees.
                        The following information was collected:
                            • Staffing levels
                            • Budget (operating and capital)


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                            •   Administrative services assistance
                            •   Number of capital projects
                            •   Existence of a half-cent sales tax

                        Population data was acquired from the California State Department of
                        Finance 2007 population database. Table 5 below shows the total
                        population number for counties the agencies serve. CMA and ACTIA
                        serve the second largest county in the Bay Area with a population of
                        1,543,000. VTA provides services to the largest county of 1,837,075
                        people. CCTA also serves a fairly large county with a population of
                        1,051,674, while San Francisco County has a lower population with
                        824,525 people, and San Mateo has the least population of 739,469.

                        TABLE 5: 2007 COUNTY POPULATIONS



                                   Agency                   County             Population
                         ACCMA/ACTA/ACTIA               Alameda                     1,543,000
                         San Mateo C/CAG                San Mateo                     739,469
                         CCTA                           Contra Costa                1,051,674
                         SFCTA                          San Francisco                 824,525
                         VTA                            Santa Clara                 1,837,075

                        Based on an initial analysis of the information Management Partners
                        received, San Mateo C/CAG and VTA were judged not to be appropriate
                        comparisons to CMA and ACTIA. San Mateo C/CAG performs a large
                        number of non-transportation tasks in San Mateo County. The
                        transportation and congestion management divisions of the agency are
                        significantly smaller than CMA and ACTIA and their capital program is
                        small with only one active project. On the other hand, VTA was excluded
                        from further analysis because it is a significantly larger organization and
                        the volume of services provided is much higher than that of ACTIA and
                        CMA combined. A large transit program dominates the workload of the
                        VTA making it impossible to determine exactly which personnel and costs
                        are involved in tasks that parallel those performed by ACTIA and CMA.
                        VTA was unable to contribute the effort necessary to identify that
                        information in its overall budget and organization information. ACTIA
                        and CMA (together), Contra Costa and San Francisco all have half-cent
                        sales tax measures which support the implementation of transportation
                        improvements.




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                        Total Budget
                        Figure 5 below shows the size of total budget for all agencies. This
                        statistic is provided for background information purposes only. A
                        comparison of the data does not provide any insight into efficient or cost
                        effective use of resources as the total budget statistics vary significantly,
                        largely due to the size of capital budgets among the agencies. All budget
                        figures contain operating budget and capital project budgets including
                        carryovers from prior years.

                        The total operating budget for CMA is $54 million, compared to $145
                        million for ACTIA. Together, this provides for a combined budget of $199
                        million. This combined total budget for both agencies lies between the
                        peers. CCTA’s total budget is $152 million and SFCTA’s is $235 million.

                        FIGURE 5: TOTAL BUDGET IN MILLIONS (FY 2008-09)

                            $300

                            $250

                            $200

                            $150
                                                                  $145 
                                                                                      $235 
                            $100
                                            $152 
                             $50
                                                                  $54 
                              $0
                                           CCTA               CMA/ACTIA             SFCTA   



                        The total number of full-time equivalent (FTE) staff employed by each
                        agency is listed below.
                           • CMA - 25 FTEs
                           • ACTIA – 9 FTEs
                           • CCTA – 19 FTEs
                           • SFCTA – 33 FTEs

                        Figure 6 shows the total number of FTEs employed by each agency per
                        100,000 population. For purposes of comparability, the CMA and ACTIA
                        have been combined to represent an agency whose function is both
                        implementation of a half-cent sales tax transportation program and
                        congestion management within a county. This statistic provides a
                        comparison of the total number of employees that perform all agency
                        activities (operating and capital).


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                        ACTIA employs 0.58 FTEs per 100,000 of the Alameda County
                        population, whereas, CMA hires 1.62 FTEs per 100,000 population. Both
                        agencies combined employ a total of 2.2 FTEs per 100,000 population.

                        At 4.0 FTEs, San Francisco has the highest number of FTEs per 100,000
                        population, while Contra Costa has 1.81 FTEs per 100,000 population.
                        ACTIA and CMA combined have a comparable number of FTEs in
                        relation to their peers.


                        FIGURE 6: TOTAL FTES PER 100,000 POPULATION (FY 2008-09)


                          4.50
                          4.00
                          3.50
                          3.00
                          2.50
                          2.00                                                     4.00
                          1.50                                1.62
                          1.00            1.81
                          0.50
                                                              0.58
                          0.00
                                          CCTA             CMA/ACTIA               SFCTA




                        Operating Costs
                        The operating cost for each agency is listed below. In this context,
                        operating budget is defined as the expenses incurred to run the agency in
                        FY 2008-09, not including capital projects, and carryovers from prior
                        years.
                           • CMA - $5 million
                           • ACTA/ACTIA - $4.7 million
                           • CCTA - $3 million
                           • SFCTA - $8 million

                        Figure 7 compares operating cost per 1,000 population. Because the
                        agencies provide a similar menu of services to their respective
                        communities, this statistic provides insight into how effectively they use
                        financial resources to do so.




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                        FIGURE 7: OPERATING COSTS PER 1,000 POPULATION (FY 2008-09)

                         
                            12,000

                            10,000

                             8,000

                             6,000
                                                                                   9,703
                             4,000                              3,240


                             2,000
                                            2,853               3,098
                                0
                                            CCTA              ACTIA*/CMA          SFCTA 

                        * ACTA and ACTIA are combined in this figure.

                        Collectively, CMA and ACTIA operating costs appear to align with their
                        peers with total operating cost of $6,338 compared to CCTA which
                        spends $2,853 and SFCTA which spends $9,703. Although it may appear
                        that CCTA is the most efficient in using its financial resources, the
                        organization only has a portfolio of 10 active capital projects where they
                        are the lead agency or in partnership as a lead agency. SFCTA has a
                        project portfolio approaching that of ACTIA and CMA and is the least
                        efficient in this area.

                        The number of administrative staff financed by the operating budget in
                        each agency as expressed in FTEs is listed below. These staff provide
                        broad organizational support in areas such as finance, human resources,
                        information technology, and clerical support. These counts do not include
                        staff allocated directly to capital projects and transportation programs
                        whose salaries are largely allocated to those specific funds sources.
                        Portions of these administrative positions may be also allocated by their
                        agency to projects or programs but they are primarily considered part of
                        overall organizational operating costs or overhead.
                            • CMA - 10 FTEs
                            • ACTIA - 4 FTEs
                            • CCTA - 6 FTEs
                            • SFCTA - 6 FTEs

                        Figure 8 compares the number of administrative FTEs financed through
                        the operating budget per 100,000 population.




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                        FIGURE 8: ADMINISTRATIVE FTES PER 100,000 POPULATION


                           1.00
                           0.90
                           0.80
                           0.70
                           0.60                                                    0.65
                           0.50
                           0.40
                                                              0.73
                           0.30           0.57
                           0.20
                           0.10                                                    0.26

                           0.00
                                         CCTA               SFCTA              ACTIA/CMA   


                        CMA and ACTIA combined have the most administrative FTEs per
                        100,000 population, with 0.91 FTEs. CCTA has the lowest number of
                        administrative FTEs at 0.57 per 100,000 population. SFTA has 0.73
                        administrative FTEs per 100,000 population although the City/County of
                        San Francisco provides accounting and other administrative services to
                        SFCTA as well. It is likely SFCTA total FTEs committed to the
                        administrative functions are at least that of CMA and ACTIA. CMA and
                        ACTIA are in alignment with their peers recognizing a slight variance in
                        administrative FTEs between the agencies and the lack of information on
                        full labor committed by the City/County of San Francisco.

                        Administrative Services
                        In order to further understand how agencies similar to CMA and ACTIA
                        operate, Management Partners obtained data on the types of
                        administrative services provided by each agency. The administrative
                        services included:
                            • Benefit Administration
                            • Payroll
                            • Accounting
                            • Legal Services
                            • Information Technology
                            • Human Resources

                        Table 6 shows that, with the exception of San Francisco, all benefit
                        administration services are provided by staff within the agencies (noted
                        on the chart as “in-house”). In SFCTA, the City and County of San
                        Francisco administers dental benefits. Other benefits are administered in-
                        house by SFCTA staff.




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                              All of the agencies contract out payroll services to a private firm.
                              Accounting services are performed in-house at both the CMA and ACTIA.
                              However, the CCTA and SFCTA contract for such services. Contra
                              Costa County provides accounting services for CCTA. The City and
                              County of San Francisco also use a private contractor to assist SFCTA
                              with accounting services.

                              Legal services are contracted out in the CMA and ACTIA. Contra Costa
                              also outsources legal services, while SFCTA uses the City and County of
                              San Francisco as well as additional outside counsel. CMA, ACTIA and
                              their peers all contract information technology services to private
                              contractors.

                              Human resource services at the CMA are the responsibility of the Director
                              of Finance and Administration, with assistance of contract staff. At
                              ACTIA, the Finance and Administrative Manager is responsible for human
                              resources. Contra Costa performs some of its human resources services
                              in-house, while others are contracted out to a private firm. SFCTA
                              provides human resource services in-house.

                              TABLE 6: ADMINISTRATIVE SERVICES ASSISTANCE


                           Administrative Services (Public or Private Agency) Assistance

                  Benefit                                           Legal
Agency                               Payroll       Accounting                      IT         HR
                  Administration                                    Services

CMA                In-house          Contract       In-house        Contract       Contract    Contract
ACTIA              In-house          Contract       In-house        Contract       Contract    In-house
                                                                                              Contract
Contra Costa
                                                    Public                                    & In-
Transportation     In-house          Contract                       Contract       Contract
                                                   (County)                                   house
Authority

                  Public (City                     Public (City     Public (City
San Francisco
                  and County                       and County)      and County)
Transportation                       Contract
                  administers                      & Contract       &Contract      Contract   In-house
Authority
                  dental benefit)



                              Table 7 shows the current number of active capital improvement projects.
                              ACTIA and the CMA have the highest combined number of capital
                              improvement projects, whereas, San Francisco and Contra Costa have
                              28 and 10 respectively.




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                        TABLE 7: NUMBER OF CAPITAL IMPROVEMENT PROJECTS

                                                                       No. of Capital Improvement
                         Agency
                                                                       Projects
                         CMA                                           30*
                         ACTIA                                         46*
                         Alameda County Combined                       73
                         Contra Costa Transportation Authority         10
                         San Francisco Transportation Authority        28

                        * Some projects common to the CMA and ACTA/ACTIA are reported in the counts for
                        each organization.


                        Attachment D provides a summary of the benchmarking data from all
                        agencies.




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                SERVICE SHARING AND CONSOLIDATION
                OPPORTUNTIES

                        This section identifies service sharing or consolidation opportunities
                        between the CMA and ACTIA. Management Partners believes there are
                        significant opportunities for cost savings and greater organizational
                        efficiency through service sharing or consolidation. The information
                        provided clearly shows advantages of such change. As previously noted,
                        this report represents a threshold analysis and is not an implementation
                        action plan; further analysis will be needed to move to an implementation
                        phase; this topic is discussed later in this report in the “Implementation”
                        section.


                        Service Areas
                        Management Partners focused on service areas that were most likely to
                        provide opportunities for streamlining or efficiency if the two agencies
                        operated on a more integrated basis. There are some functions that are
                        distinct between the agencies and would not offer opportunities for cost
                        savings or greater efficiency; therefore, we did not focus on those in this
                        analysis. For example, transportation and congestion management
                        planning are mandated functions unique to CMA and ACTIA has no
                        corollary function.      Similarly, many of ACTIA’s outreach and
                        transportation program offerings and services have little parallel in CMA,
                        although the CMA does engage the community through project
                        development. There would be little redundancy in such areas, though
                        there are benefits to sharing the resources in these areas and integrating
                        them into both agencies more extensively.

                        Management Partners, therefore, focused on the following areas which in
                        our experience will provide the most likely benefit to both agencies:
                            • General Organizational Management: Overall organizational and
                               executive management structure of the agencies and support of
                               the boards and legislative processes; public outreach efforts.

                            •    Financial Services: The execution of routine financial functions
                                 such as accounts receivable, accounts payable, payroll,
                                 accounting, and treasury management.




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                            •   Administrative Services: General administrative support services
                                such as human resources, information technology, contract
                                management, legal counsel, and clerical support.

                            •   Project and Program Delivery and Support: Support for capital
                                projects development and support such as Project Controls Team
                                activities and potentially other consultants.

                            •   Facilities Management: Office space and associated issues.

                        A table summarizing the options, their associated costs and savings
                        appears at the end of this section of the report.


                        General Organizational Management

                        Executive Management
                        Both ACTIA and CMA are fairly small organizations focused on what is, in
                        broad terms, fundamentally the same mission; reducing congestion in
                        Alameda County and improving the quality of life of its residents through
                        comprehensive transportation planning and improvements. Combining
                        the organizations under a single Chief Executive Officer is a fairly obvious
                        opportunity for cost savings and Management Partners makes that
                        recommendation below. In order to reap the costs savings and benefits
                        of consolidated executive leadership, significant care and thought will
                        need to be exercised in the transition plan to protect the long standing
                        professional commitments of the incumbents. Preserving the positive
                        aspects of the organizational culture of both organizations and minimizing
                        the impact on project and program delivery will also be necessary. In
                        addition, both organizations need to ensure the retention of skilled and
                        talented staff to ensure productivity and program continuity.

                        The history of two organizations supporting the county’s transportation
                        needs, as described previously, outlines the interests that gave rise to
                        the current, separate organizations rather than one organization handling
                        all functions. When there are overlapping functions and missions, some
                        level of inefficient use of resources, confusion over role, and even conflict
                        can arise, all of which have been experienced to one degree or another
                        with CMA and ACTIA. Fortunately, ACTIA and CMA have sustained a
                        generally collegial level of cooperation, although some conflict (inevitable
                        in an environment where transportation needs exceed resources) has
                        happened in the past over various issues. In interviews and surveys, staff
                        reported their confidence that the organizations can merge effectively.
                        Some expressed concerns that there were some substantial differences
                        in organizational culture, yet despite this, staff generally believed the
                        innate professionalism of both staffs would be sufficient to carry the day.
                        Nonetheless, the transition should be facilitated carefully both to avoid




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                        interruption of projects and programs and to allow a new, integrated
                        organizational culture to emerge.

                        The new, consolidated organization requires a single executive director
                        committed to the creation of a new organizational culture that blends the
                        cultural strengths of both organizations. The new director’s leadership
                        should focus on:
                            • Designing an organizational structure that preserves the strengths
                                of both agencies while ensuring integration;
                            • Creating a new mission, vision, set of values and goals which will
                                support the new organization;
                            • Building an effective team with norms for working together and
                                achieving the mission of the new organization;
                            • Significantly expanded integration of the transportation planning
                                efforts of CMA with project planning of future sales tax initiatives;
                            • Creating one set of policies, practices, and procedures to be used
                                consistently throughout the new organization; and
                            • Restructuring financial structures as necessary to ensure
                                compliance with the restrictions of enabling legislation and
                                transparency, as well as financial solvency.

                        Management Partners recommends a merger of the staff serving the
                        ACTA/ACTIA and CMA boards following a careful transition program to
                        minimize disruption of the staff and the projects and programs currently
                        underway. Because of the scope and complexity of the work programs of
                        both agencies, this transition should be measured and focused.

                                 Recommendation 1: Merge the staffs of ACTA/ACTIA
                                 and CMA into a single organization under a single
                                 Executive Director. Because of the complexity of the
                                 process of merging, we recommend this be planned to
                                 occur by mid calendar year 2011 with the merger
                                 completed by the end of that year.

                        The ultimate organizational structure of any merged agency will be
                        under the direction of the new Executive Director. Management
                        Partners recognizes that any single, new Executive Director will
                        be challenged to manage and provide leadership to a combined
                        organization where there were previously two executive positions.
                        As a result, there may be a need for an additional senior
                        management position to assist the new Executive Director;
                        however, prior to the development of an implementation plan
                        (described below), and the development of an organizational
                        structure, this can not be definitively assessed at this time.

                        Public Outreach
                        As discussed earlier, board members and staff of both CMA and ACTIA
                        have complimented ACTIA on its skilled and effective public outreach
                        programs. ACTIA’s staff has more than a full workload maintaining its


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                        own outreach program, let alone pick up some workload for the CMA.
                        However, a small amount of the savings outlined in this report could be
                        reprogrammed to accommodate an effort to capitalize on this opportunity.
                        ACTIA is beginning a project to improve its own website; in the long term
                        it would be most cost-effective if CMA’s interests be included in the
                        redesign project to reduce the long term costs. A consistent design or,
                        ideally, a shared website would also offer some minor cost savings. The
                        website and other outreach programs developed over the coming months
                        can provide the first public exposure of the consolidated organization.
                        Management Partners recommends this service sharing begin in the
                        2009 calendar year, with the addition of .5 FTE for the addition of an
                        outreach program position.

                                Recommendation 2: Add 0.5 FTE position for support
                                of the dual organization’s public outreach and
                                publication efforts. The 0.5 FTE would be used to
                                support interest in expanding work in this area.

                        Board and Executive Support
                        Each organization employs a Board Secretary or Clerk of the Board to
                        manage the notification and legislative record keeping tasks required to
                        comply with state laws for elected and advisory bodies. In addition, each
                        secretary or clerk has a range of administrative support duties which they
                        perform for executive or other staff. While the duties related to support of
                        the boards does require a commitment of labor, very small governments
                        like CMA and ACTIA should not require two such positions if they merge
                        into an integrated organization with a highly collaborative working
                        relationship. A single Board Secretary or Clerk of the Board should be
                        sufficient for a merged organization. ACTIA employs an Executive
                        Assistant in addition to the Clerk of the Board who provides general
                        administrative support to ACTIA staff. CMA’s Board Secretary also
                        provides support for the Executive Director and Chief Deputy and some
                        accommodation will have to be made to ensure that support continues
                        following any reorganization.

                                Recommendation 3: Consolidate Board Secretary and
                                Clerk of the Board duties as part of a plan to share
                                administrative services between the agencies.
                                Reallocate existing administrative support as necessary to
                                assist in this expanded work program.

                        Lobbyists
                        ACTIA and CMA each have contracts with lobbying firms at the state and
                        federal level, employing the same lobbyist at the state level. It is likely that
                        with keen competition for limited state and federal dollars, advocacy for
                        transportation in Alameda County would be most effective if done as a
                        single voice. Certainly an integration of all transportation strategic
                        interests would be more compelling than two organizations competing in
                        the same region as revenues become less available. Regardless, a



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                        minor reduction in lobbying costs could be realized in the short term; this
                        can be achieved through slight reductions in contract scopes, eliminating
                        redundant work such as periodic reports for each organization where a
                        single report for both would suffice. In the long term, a single lobby
                        services contract at the state level and a single contract at the federal
                        level which further the interests of a merged ACTIA and CMA
                        organization should reduce contract costs.

                                 Recommendation 4: Reduce the number of contracts
                                 for lobbyists at the time of contract renewal to allow
                                 both organizations to be served by a single lobbyist at
                                 each level of government.



                        Financial Services
                        Both ACTIA and CMA include an organizational unit that provides or
                        oversees the general financial and administrative services for the
                        organization. In both cases, the largest portion of the unit’s responsibility
                        is financial management and operations. These functions include
                        accounting, accounts receivable and payable, payroll, treasury
                        management, financial planning and reporting. Both organizations state
                        that finance and administrative staff are fully extended in terms of
                        workload. However, having similar functions in both agencies is a clear
                        opportunity for a merger. Further analysis will be needed to more
                        specifically assess the appropriate level of staffing to meet the
                        requirements of financial accountability, human resources administration,
                        and other responsibilities that must be met by the merged organization.
                        Any changes must recognize the overall workload may be slightly
                        reduced but is unlikely to require significantly fewer staff members to
                        meet the needs. The total number and the level of work associated with
                        each position will vary and ultimately be determined as part of the
                        development of an implementation plan.

                        Currently the CMA employs a Finance and Administration Director, an
                        Accounting Manager, a Senior Accountant and one Accountant. ACTIA
                        employs a Finance and Administration Manager, a Senior Accountant,
                        and some consulting staff who assist in entering invoices into the financial
                        software for payment. Staffing of the Finance and Administration units of
                        each organization is represented in Figure 9.




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                        FIGURE 9: ADMINISTRATIVE STAFFING OF THE AGENCY/AUTHORITY

                                ACCMA Administrative         ACTIA Administrative
                                Staff                        Staff

                                Finance & Administration        Finance & Administration
                                        10 FTE                           4 FTE

                                      Director (1)             Finance and Administration
                                                                   Manager (1)
                                                               Senior Accountant (1)
                                                               Clerk of Authority (1)
                                      Accounting               Executive Assistant (1)
                                        3 FTE

                              Accounting Manager (1)
                              Senior Accountant (1)
                              Accountant (1)


                                     Administration
                                        5 FTE

                              Administrative Manager (1)
                              Admin. Assistant III (2)
                              Admin. Assistant II (1)
                              Admin. Assistant I (1)


                                 Contract Management
                                        1 FTE

                              Contracts Administrator (1)




                        Management Partners recommends the finciancial and general
                        administrative functions of the two organizations be consolidated.
                        ACTIA’s enacting legislation mandates administrative salaries and
                        benefits not exceed 1% of revenue and a cap of 4.5% of revenues for
                        total administrative costs; this must be recognized in structuring a
                        combined organization.       We believe ACTIA’s Citizen’s Watchdog
                        Committee will require a straight-forward and transparent business model
                        and labor allocation reports to feel confident that the requirements of the
                        caps have been met, even though the organizational structure’s
                        underpinning may be different. This should be relatively straightforward
                        and achievable.

                                Recommendation 5: Consolidate the financial and
                                administrative services of the organizations. Adjust
                                staffing and consultant support as indicated further in this
                                report to accommodate the workload and provide
                                comparable financial planning and services currently
                                enjoyed by both organizations.




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                                 Recommendation 6: Eliminate one executive financial
                                 management position and assign the financial
                                 management responsibilities for both agencies to the
                                 remaining position.

                        Assigning all financial services functions to one senior financial
                        management position will create additional work that cannot be sustained
                        by that position. Both financial services executive incumbents have full
                        workloads extending beyond a typical work week. While many functions
                        are completely redundant and a single organization would eliminate the
                        parallel need, the volume of financial planning, budget oversight, and
                        other financial managerial tasks would increase. To offset the workload,
                        Management Partners recommends adding a Senior Management
                        Analyst position and allocating .5 FTE to financial reporting and analysis
                        functions in support of both organizations. The remaining .5 FTE would
                        be assigned to the contract management role as described below.

                                 Recommendation 7:         Add a Senior Management
                                 Analyst position to provide additional support to the
                                 consolidated financial services function. Allocate 0.5
                                 FTE of this position to assist with financial management
                                 and analysis duties as needed.

                        Accounts Payable
                        Currently both organizations support Accounts Payable functions through
                        a combination of existing staff and contract assistance through
                        consultants. Consultants are typically used to process invoices on the
                        capital projects, although CMA reports they have been absorbing that
                        responsibility to reduce consultant costs. ACTIA contracts with a half-
                        time consultant for that function. In the initial transition of Accounts
                        Payable functions, it is expected that the agencies will have to continue
                        using the consultant’s services to accommodate the workload, although
                        combining all financial functions should eventually reduce the overall
                        volume of financial transactions, allowing staff to absorb some or all of
                        this work. Periodic re-evaluation of this position should be done with more
                        workload transitioned to staff as capacity allows. Alternatively, as staff is
                        lost through routine attrition, workload can be shifted to consultants or
                        temporary staff to allow the agency more flexibility if project funding
                        becomes scarce.

                        Accounts Receivable
                        Both organizations have a minimal Accounts Receivable function and
                        transaction volume. An integrated single finance unit should be able to
                        support both without any changes.

                        Payroll
                        Both organizations contract payroll services to ADP. The service can be
                        combined under a single contract, resulting in small savings primarily
                        from a minor decrease in the number of paychecks produced each year.



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                                Recommendation 8: Combine payroll services into a
                                single contract with ADP or another service provider.

                        Accounting
                        Below the department head level, CMA employs three accounting
                        professionals, ACTIA one.       In both organizations the accounting
                        professionals also perform a variety of routine financial duties such as
                        processing invoices for payment, recording payroll information, and other
                        routine transactions. A merger of functions would not significantly reduce
                        the combined workload so the retention of accounting professionals will
                        be necessary. Ideally, current positions can be retained to allow the
                        retention of organizational history and to provide a measure of trust
                        between the organizations. Upon separation of any incumbent
                        accountant, the organization may choose to fill the position at a lower
                        level for more cost efficiency. Once a complete merger of the financial
                        services function is completed, a lower level of skill may be all that is
                        necessary for continued operations.

                                Recommendation 9: Preserve existing accountant
                                positions to support accounting and financial
                                transactions resulting from the integration of the
                                financial services between the two agencies. Re-
                                evaluate the accounting positions upon separation of any
                                accounting professional to match skills with workload
                                needs at the time.

                        Audit
                        Each of the agencies currently has an independent audit as required by
                        law. Combining the financial services into one organization will not
                        change the auditing requirements except by legislative changes such as a
                        re-enactment of the sales tax proposition that could allow for a complete
                        merger of the organizations and governing boards. Until that time, though,
                        the scope and work required by the audit firm will not be substantially
                        different. A modest savings may be had by combining audit contracts
                        with a single provider, assuming both boards are satisfied with that
                        option.




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                                 Recommendation 10: As part of an implementation
                                 plan, seek board direction regarding the costs and
                                 benefits of a single audit contract. Bid service to a
                                 single provider, if authorized.

                        Financial Management
                        Many of CMA’s funding sources are by their nature “pass-through”
                        revenues, which means the agency completes a body of work, submits a
                        claim to a grantor, and is reimbursed for its costs. As a result, the CMA
                        has mostly liquid funding and must carefully manage cash flow, although
                        some long term capital accounts do exist. Ideally, revenues and
                        expenditures flow through the organization at a constant rate. In reality,
                        cash does not consistently flow in this way and the agency must manage
                        some cash reserves to meet its cash flow needs. As a result, the CMA
                        has some revenues under management allowing it to leverage
                        investments and produce a modest return.

                        ACTIA, on the other hand, garners revenues on an ongoing basis. Those
                        funds are generally programmed for projects months to years later. As a
                        result, ACTIA manages a fairly large investment portfolio. Currently,
                        investment management is provided for ACTIA by two private firms
                        specializing in government investment programs. The investment options
                        are regulated by an investment policy adopted by the ACTIA Board.

                        In the short term, there is no need to change the financial management
                        program of each agency other than shift investments under the terms of
                        each organization’s investment policies to take advantage of market
                        conditions. On an ongoing basis, the investment policies should be
                        reconciled for simplicity with both agencies using the same policy.
                        Investments need not be co-mingled, indeed separation is beneficial in
                        providing the transparency required under Measure B.

                                 Recommendation 11: Develop a single investment
                                 policy at the earliest opportunity utilizing the current
                                 investment management practices.

                        Administrative Services
                        Administrative Services in the context of this section refers to the general
                        administrative support services necessary and common to modern
                        organizations. Such services include HR, IT, contract management, legal,
                        facilities and office equipment support.

                        Human Resources
                        In the past year, CMA has retained the services of a contract Human
                        Resources consultant. Both staff and managers have commented on the
                        value of the service and advice of the consultant on personnel issues,
                        management mentoring, payroll and benefit questions, and a number of
                        other personnel challenges. A consultant is on-site for several hours a
                        week to support both staff and managers. In an organizational


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                        assessment completed by Management Partners in 2007, this was an
                        area identified as needing greater attention and expertise. Personnel
                        problems are difficult for organizations of all sizes, distracting staff and
                        managers from their daily tasks. Only large organizations can generally
                        afford to have professional HR staff to help them control personnel brush-
                        fires. Both staff and managers report simmering problems have been
                        successfully defused through the assistance of the HR consultant.

                        ACTIA has had some employee relations issues in the past few years that
                        have occupied a great deal of time on the part of organization managers
                        and the board. In addition, the organization had to rely heavily on legal
                        staff for advice and support. When employee relations issues become
                        critical, legal support is more than prudent, but early intervention could
                        curtail the need for that and avoid such expensive costs. Effective
                        mentoring and coaching of managers on proper actions, general
                        employee counseling at whatever level, and even the existence and use
                        of solid, modern personnel policies and procedures contribute to
                        minimizing the chances of small personnel issues expanding into larger
                        ones. Sharing the services of the HR consultant currently in the CMA
                        should prove equally helpful to ACTIA. Given the small size of the ACTIA
                        staff, only a modest increase in consulting time should be required.

                                Recommendation 12: Expand the current contract
                                with CMA’s Human Resources consultant to provide
                                support for ACTIA.

                        Information Technology
                        ACTIA and the CMA operate a small fleet of server computers that
                        support the primary business systems of the organizations. The systems
                        include basic services such as e-mail, file and print sharing. Combining
                        those services are fairly straightforward, allowing the organizations to
                        reduce computer inventory. Savings will result from this effort by
                        requiring fewer replacement computers through the sharing of the
                        computer hardware supporting these technology services.

                        A more complicated technology challenge for merging organizations is
                        the merger of major business systems. Both organizations use the
                        FundWare financial system for routine accounting and financial
                        transactions. While merging data stored in the same system is usually
                        relatively simple, in this case there may be some slight challenges. The
                        FundWare software has recently been acquired by a competitor. Although
                        they provide some support for FundWare, other Management Partners
                        clients report the support is weak and the new company has
                        demonstrated a clear interest in transitioning FundWare customers to
                        their own product. They are providing some financial incentives to make
                        the transition palatable. The transition to new financial software, whether
                        to the competitor’s own product or a third party product, is not a part of
                        the organizational transition discussed here but an independent issue that
                        must eventually be resolved by both ACTIA and CMA. Management


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                        Partners recommends the change of software not be considered until
                        after the organizational transition is complete; however, it must be
                        recognized that as the new owner of FundWare asserts its own business
                        plans, the need to convert to a new software package may become an
                        element of the conversion.

                                 Recommendation 13: Merge e-mail, file and print
                                 sharing systems, shut down redundant computers and
                                 reduce replacement budgets.

                                 Recommendation 14: Merge financial systems to
                                 provide more seamless access and simpler support of
                                 the accounting information and financial transaction
                                 records of both organizations.

                        The other major business system operated by both organizations is a
                        project tracking and management application. The organizations use
                        different software packages. ACTIA has a product licensed to them and
                        loaded onto their own computer systems. The product in use at ACTIA
                        has been tested by the CMA who found it lacking some key features. The
                        CMA uses a software package provided by their consulting Project
                        Controls Team which is reportedly performing better, although a few CMA
                        staff members expressed some confidence issues associated with it as
                        well. The Project Controls Team houses the software on their own
                        systems. The CMA does not own a license to that software and its use is
                        contingent on continued employment of the Project Controls Team.

                        In the short term, there is no compelling reason to merge the project
                        tracking databases, but business prudence dictates that the project data
                        always be available to the CMA regardless of the organization providing
                        Project Controls support. Management Partners recommends the CMA
                        obtain a license for continued use of the project management software. It
                        is a common practice to outsource support of such software in this way,
                        but the organizations should have contractual requirements for the
                        delivery of the data contained in that system upon demand. The CMA
                        paid substantial labor fees in having its project data entered into this
                        software. That data is a strategic asset of the CMA and must be protected
                        as such.

                        On an ongoing basis, the project management practices and procedures
                        of the organizations should be merged to support effectiveness in project
                        delivery, cost efficiency, and transparency. Proper management oversight
                        by a single executive will demand such consistency. This will ultimately
                        require the merger of project management systems. There are a few
                        commercial products in this market sector other than those currently in
                        use. Following the efficient reorganization of project work of this
                        transition, a merger of project management data should be undertaken.
                        New software can be evaluated at that time.




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                                Recommendation 15: Merge project management data
                                from both agencies into a single software package.
                                Obtain any software licenses necessary to protect data
                                assets owned by the agencies.

                        Contract Management
                        Currently CMA employs a contract administration specialist who
                        specializes in procurement procedures, risk management and other
                        technical issues involved in the development and execution of contracts.
                        That person was trained in this function by the Chief Deputy Director of
                        ACTIA. CMA staff is currently at capacity with the workload generated by
                        the CMA contract monitoring and oversight. In fact, the Director of
                        Finance and Administration at the CMA oversees a number of bids and
                        contracts that could and should be managed by others.

                        ACTIA does not employ a contract administrator, relying on engineering
                        staff for project related contracts and general office staff for administrative
                        services, such as programs and grants, consulting services, routine office
                        contracts, benefit contracts, etc.       ACTIA’s Clerk of the Board is
                        responsible for oversight and administrative monitoring of many of the
                        contracts, but the Deputy Director and Finance and Administration
                        Manager also report considerable time allocated to this function.

                        There is an opportunity to reduce the burden on senior managers at both
                        agencies and the senior financial services executive, allowing all to focus
                        on the workload that will spring from this organizational transition as well
                        as ongoing transportation issues. To remedy the existing workload
                        challenge as well as that which would result following a merger,
                        Management Partners recommends 0.5 FTE of the proposed
                        Management Analyst position described in Recommendation 7 be
                        allocated in support of this work program.

                                Recommendation 16:      Assign 0.5 FTE of the
                                recommended Senior Management Analyst position to
                                provide contract and procurement support for both
                                agencies.

                        Legal Support
                        Both ACTIA and the CMA currently employ the same law firm to provide
                        general counsel services, board support, contract oversight, and
                        miscellaneous other services. ACTIA additionally retains a second firm to
                        represent them in cases where there could be conflicts of interest over
                        shared issues.

                        Legal staff reports that the fees currently paid by the combined
                        organizations are driven primarily by the ebb and flow of capital project
                        delivery and human resources issues. Support of the separate board
                        functions is somewhat redundant, but remains a smaller and consistent
                        portion of legal expenses. It is unlikely much savings can be gleaned from


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                        board assistance by attorneys as long as two to three governing boards
                        are required by the enabling legislation and statutory requirements. Upon
                        renewal of the sales tax measure, it may be possible to include language
                        in the measure to merge the boards, reducing the time spent in meetings
                        and review of legislative information, agency operations and projects.
                        However, through a merger or service sharing, even in the short term,
                        less time should be required for inter-agency coordination, redundant
                        review of contracts for common projects, and dispute resolution.

                        One of the primary drivers of legal costs is that issues and legal work vary
                        according to the specific needs of various projects. With a merger, legal
                        costs should go down once there is full integration of project management
                        and the number of capital projects decreases over time. However, in the
                        interim they will fluctuate in accordance with the number and challenges
                        of capital project delivery and the effectiveness of personnel management
                        within the organization. No changes are recommended at this time,
                        although a periodic re-bid of such service contracts is a best practice of
                        any governmental agency.

                        Project Delivery and Support

                        Project Controls Team
                        CMA and ACTIA both employ a Project Controls Team to meet some of
                        the project management and specialized expertise needs of their
                        respective projects and programs. An effective Project Controls Team
                        brings financial, scheduling, cost tracking and forecasting, and
                        interagency coordination services to an agency, reducing the burden on
                        existing staff and theoretically providing significantly enhanced oversight
                        of these issues to the Deputy Director of both agencies. The specific
                        tasks and duties of each Project Controls Team was beyond the scope of
                        this study; however, it appears that some of the workload assigned to
                        these teams are tasks in execution of specific projects and not just the
                        typical monitoring and control activities of a Project Controls Team.
                        Additionally, each agency actually employs a few consultants from the
                        Project Controls Team of the other agency for miscellaneous project
                        tasks.

                        There appear to be a number of redundant tasks assigned to consultants
                        and staff of both agencies. Staff reported that both agencies send a staff
                        member and a consultant to several meetings which counterpart staff and
                        consultants from the opposite agency attend. Consultants create a
                        separate report on these meetings for both agencies. In many cases, the
                        interests of one agency could be protected by the other at these
                        meetings, obviating the need for staff and consultants from the opposite
                        agency. This would free staff time for each agency and reduce consulting
                        costs.

                        In addition, reshuffling some of the project responsibilities and accepting
                        project reports from the opposite consulting team could reduce some



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                        additional redundant work. Some staff indicated that responsibilities for
                        many projects and meetings could be easily exchanged between the
                        agencies in an informal session trading one task for another. However,
                        other staff members perceive there is a fair degree of rivalry between the
                        agencies and the exchange should be facilitated. Even so, both believe
                        there is a high degree of professionalism in both organizations which
                        would transcend these issues.

                        Ultimately one Project Controls Team could offer some significant cost
                        savings. A competitive bid between the incumbents possibly including
                        third parties is an appropriate practice regardless of the merger of
                        agencies.

                                Recommendation 17: Conduct a facilitated exchange
                                of project and meeting responsibilities between the
                                agencies, rebalancing responsibilities to eliminate
                                redundancy within the Project Controls Team. Each
                                agency would become responsible for both its own
                                interests and the interests of their partner agency in all
                                activities exchanged. Reports created by the responsible
                                agency should be made available to the other to ensure
                                interests are protected.

                                Recommendation 18: Conduct a competitive bid for a
                                single Project Controls Team contract as soon as
                                practical    following the  merger    of   project
                                responsibilities.

                        Facilities
                        ACTIA and CMA currently occupy space one floor apart in the same
                        building, with ACTIA providing the board room. The agencies have leases
                        that co-terminate in 2013. At that point in time, it would be appropriate to
                        co-locate all functions in the organizations. Throughout the coming years,
                        staff should be moved up and down the stairs as appropriate for
                        integrated operations.

                        At the time of the lease expiration, space should be negotiated with the
                        current landlord or in another facility if one is available at an appropriate
                        rate, in order to locate all staff in the same space. Co-location is important
                        for cost savings, to minimize supervision challenges, and to cement the
                        merger of the two organizations.

                        Some support personnel currently have private office space. The logic
                        was to locate them close to the unit they support and the private offices
                        were the only available openings at the time. Although practical given the
                        availability of space and support needs, this is not typical practice for
                        either public or private sector office space and could be interpreted as
                        excessive in the public eye. Management Partners recommends
                        employing an office space consultant at the time of the co-location to



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                        design appropriate space for staff that meets the interests of support and
                        fiscal prudence.

                        Depending on the availability of space near the current board room in
                        which to locate both ACTIA and CMA staff, a new board room may have
                        to be constructed and equipped. Modest expenses should be anticipated
                        to achieve that objective.

                                 Recommendation 19: Locate all staff in the same office
                                 space at the termination of the current leases or earlier
                                 if subleases or other arrangements can be made.
                                 Employ an office consultant to configure spaces
                                 appropriate to the staff needs and appearance of
                                 appropriateness.



                        Transition Costs/Benefits Summary
                        In the course of developing the service sharing opportunities and
                        recommendations discussed in this report, Management Partners
                        developed a “Service Matrix” which is summarized in Table 8. The
                        Service Matrix is a list of business functions that might be affected by a
                        service consolidation or merger, the cost of transition, and the ongoing
                        cost changes.

                        The costs expressed are the raw costs and savings potential relative to
                        the current cost to both organizations. As discussed previously, the cost
                        savings should be approached as a potential for both organizations to
                        improve their cash position simply through the reduction of total costs.
                        Any attempt to charge fully burdened overhead rates to the other
                        organization will not result in the realization of full cost savings. The
                        transition plan must recognize the interest of not increasing the cost
                        burden of either CMA or ACTIA/ACTA; both benefiting from the savings
                        generated.

                        The transition process is recommended to occur in three general phases.
                        The sharing of services can begin in a shorter period of time in many
                        cases.      Management Partners recommends a transition period
                        appropriate to the challenges of each area be specifically addressed in
                        the    implementation       plan  phase.    Generally      these   are:

                            •    Phase I - Calendar Year 2010 Quarter 2 – Financial and
                                 administrative services integration
                            •    Phase II- Calendar 2010 Year Quarter 4 – Merger of executive
                                 management function
                            •    Phase III - Calendar Year 2011 Quarter 2 – Merger of programs
                                 and project delivery functions
                            •    Phase IV - Mid 2013 - Collocation of staff unless subleases can be
                                 found or other lease changes can be negotiated earlier


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                        In Phase I, the agencies would begin to merge administrative services. In
                        Phase II the executive management would be selected and begin to
                        direct the organizational structure. In Phase III the project and program
                        responsibilities are integrated under a single executive, and in Phase IV
                        the agencies are co-located.

                        The estimated cost impact of the consolidation program recommended in
                        this report is $642,000 in savings per year, with even greater savings
                        possibilities depending on the degree of success at controlling several
                        costs described in this report. To achieve this savings requires the
                        expenditure of $680,000 to $820,000 depending on how early in the year
                        costs can be reduced and the degree of support staff required to make
                        the transition. Management Partners’ estimate of transition costs are
                        based on a severance package policy that has been common in the
                        public sector. In the current economic downturn, many agencies are not
                        providing any severance packages beyond entitlements employees may
                        have already earned. Exact costs will depend on severance policies
                        recommended and approved by the boards and the number of positions
                        impacted, as determined by a subsequent implementation plan.

                        The transition costs are expected over a three year period including
                        approximately $220,000 the first year, $350,000 the second year, and
                        $110,000 in 2013. Additional costs may be required depending on how
                        early in the year the recommendations can be implemented and how
                        much temporary labor or consulting support is needed during the
                        transition. Regardless of the transition cost, in a 10 year period the
                        savings is expected to add up substantially. Figure 10 provides a graphic
                        representation of the accumulation of savings over that period.




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                            FIGURE 10: TEN YEAR PROJECTED RANGE OF SAVINGS


           $8,000,000
           $7,000,000
           $6,000,000
           $5,000,000
           $4,000,000
           $3,000,000
           $2,000,000
           $1,000,000
                   $0
           ‐$1,000,000
                            2009    2010    2011    2012    2013    2014      2015   2016     2017    2018
                                           Net Return On Investment ‐ High Cost / Low 
                                           Savings 


        A summary of the recommendations with associated transition costs, and possible
        savings is described in Table 8.

                            TABLE 8: SERVICE MATRIX - TRANSITION COSTS/BENEFITS SUMMARY

                            Phase I:         Financial and Administrative Services Integration

                            Target Date: Calendar Year 2010 Second Quarter

                                                                                     Annual Cost
  Service Area                          Recommendations                                Change
                                       Finance
 Accounts                Consolidate AP and AR functions.
 Payable (AP)/
 Accounts
 Receivable
 (AR)
 Accounting              Consolidate accounting services functions; retain
                         existing professional services positions.
 Financial               Integrate financial services functions; eliminate               (180,000)
 Services                one executive financial services position.
 Purchasing              Combine purchasing card program.
 Audit                   No changes required but a combination of audit
                         contracts may result in some saving.
 Financial                Add Senior Management Analyst to provide                         55,000
 Analysis                 general financial analytical support to both
                          agencies. Commit .5 FTE to this purpose.
 Payroll                 Combine payroll services into single contract with                (1,000)
                         ADP


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                                                                        Annual Cost
     Service Area                   Recommendations                       Change
                                      Human Resources
 General             Bid single contract for both organizations           10,000
 Support             for HR support
                                   Information Technology
 General IT          Merge IT support under one provider. Merge          (20,000)
 Support             redundant systems.
 Major               Combine computer servers and eliminate
 Hardware            replacement of redundant machines.
 Business            Merge financial and project management               (9,000)
 Software            systems.
 PCs and             Reduce of software licenses through elimination      (2,000)
 Software            of redundant licenses and related support.
                                       Support Services
 Board Support       Consolidate Board Secretary and Clerk of the        (85,000)
                     Board duties and responsibilities. Reallocate
                     existing administrative support as necessary.
 Executive           Maintain existing executive support; re-evaluate
 Support             workload and work program after subsequent
                     reorganization activities.
 Line Support        Maintain existing line support arrangements. Re-
                     evaluate workload after subsequent
                     reorganization activities.
                                Other Administrative Support
 Contract Mgmt       Allocate 0.5 FTE of proposed Senior                 55,000
                     Management Analyst in support of additional
                     contract administration.
                     Employ single lobbyist for both agencies.           (70,000-
 Lobbying
                                                                          90,000)
                                           Outreach
 Community           Expand CMA outreach efforts through ACTIA            85,000
 Outreach            staff and programs.
                     Conduct a website evaluation of CMA similar to
Website              the one ACTIA has done. Update style and
                     content. Possibly merge organizational websites.
      Subtotal                                                          (142,000-
                                                                         162,000)




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                                   Phase II:        Merger of Executive Management

                                   Target Date: Calendar Year 2010 Quarter 4
                                                                                            Annual
           Service                                                                            Cost
            Area                            Recommendations                                  Change

                                       Organizational Management

                                Eliminate one Executive Director position;                     (160,000)
                                existing Deputy Directors and section heads
  Organizational                remain pending determination by future
  Structure                     Executive Director.


        Subtotal                                                                               (160,000)


                                   Phase III:       Merger of Project and Program Delivery

                                   Target Date: Calendar Year 2011 Quarter 1



                                                                                      Annual
                                                                                      Cost
Service Area                   Recommendations                                        Change

                                            Organizational Management

                               Renegotiate or re-bid a single contract for legal      (40,000-60,000)        .
Legal
                               services to a consolidated or merged agency.

                                                   Project Delivery

                               Merge Project Controls Team responsibilities to        (200,000- $400,000)
Project Controls Team          eliminate redundancy. Eventually contract for single
                               Project Controls Team

Subtotal                                                                              (240,000- 460,000)




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                             Phase IV:    Consolidation of Workspace
                             Co-location of staff and supporting consultants into single
                             workplace

                             Target Date: No later than the termination of current leases in 2013,
                             earlier if subleases or other changes could be negotiated prior to
                             that date.

                                                                                     Annual
                                                                                      Cost
           Service Area                      Recommendations                         Change



Office Space and Utilities              Collocate the organizations                     (100,000)

Board Room                              Create a new Board room if
                                        necessary


Subtotal                                                                                (100,000)

Total All Phases                                                                        (643,000-
                                                                                         891,000)

                             Total transition costs are estimated at $680,000 to $820,000 and are not
                             reflected in the Total Annual Cost Change in this matrix. Effectively, then,
                             the transition costs may offset approximately one year of cost savings,
                             but again the transition costs can be expected to occur over a three year
                             period.


                             Alternative Organization Models
                             A complete merger of both the CMA and ACTIA Boards may not occur
                             until a re-authorization of the half-cent sales tax is considered by the
                             voters, presumably in 2012.          At that time, legislation could be
                             incorporated into the measure that would authorize administration of the
                             new program to be administered by a merged agency. At the same time
                             that this is under consideration by the voters, the CMA could develop and
                             present an amendment to member agencies of the joint powers authority
                             to allow for a merged agency with additional duties and responsibilities. A
                             new governing board structure would be developed and presented as part
                             of each of these efforts. In the meantime, integration of both agencies
                             could occur without a merger of the governing boards through a
                             contractual relationship between the two agencies.

                             For purposes of illustration and in consultation with the Executive
                             Directors of both the CMA and ACTIA, Management Partners has
                             developed three alternative function organizational charts which could



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                        result following integration of the two agencies. The purpose of the
                        illustrative charts is to demonstrate alternative ways that the various
                        organizational functions could be integrated, each recognizing different
                        goals and alignments.

                        Option 1 integrates the executive, finance and administration functions
                        early and sustains the current agency and authority programs and
                        projects separately.

                        FIGURE 11: OPTION 1 – ADMINISTRATIVE INTEGRATION      WITH   SEPARATE
                        PROGRAMS AND PROJECTS




                        Option 1 recognizes the benefits of integrating the finance and
                        administrative functions, but otherwise leaves the programs and project
                        delivery elements as separately operating operations. This option
                        recognizes the strong interest of not interrupting the current capital project
                        delivery operations of each agency; however, it does not allow for an
                        opportunity to re-align transportation planning and community outreach
                        activities in ways that might benefit both agencies and better serve the
                        public interest.




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                        Under Option 2, like with Option 1, the executive, finance and
                        administration functions are consolidated. Additionally, capital project
                        delivery now done separately by the two agencies would be consolidated
                        into one functional area for purposes of efficiency and effectiveness. It
                        also recognizes the importance of Programming (funding and pre-
                        development coordination) and the ongoing challenges which
                        continuously require high level attention to sustain the County’s success
                        in capturing funding for projects by consolidating those and related areas
                        into one functional section. The option also places Policy, Planning and
                        Public Affairs into one functional grouping to recognize the integrated
                        nature of these functions and importance of public outreach and
                        involvement for both agencies.

                        FIGURE 12: OPTION 2 – CONSOLIDATED ADMINISTRATIVE SERVICES,
                        PROGRAMMING SEPARATED, POLICY AND PLANNING ALIGNED AND
                        CONSOLIDATED CAPITAL PROJECT DELIVERY




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                        Under Option 3, finance and administration functions would be
                        consolidated. The remaining programs and projects would be reorganized
                        within two functional areas. A “super” division would be created which
                        combines the Programming and Capital Projects functions into one unit.
                        Policy, Planning and Public Affairs would remain as a separate major
                        function. This option recognizes the critical importance of staff in
                        Programming and staff in Capital Project delivery working closely and
                        collaboratively on a regular basis. This super division would likely be
                        further divided into major sections as programming and capital project
                        delivery represent significant and major areas of programs and
                        responsibility.

                        FIGURE 13: OPTION 3 – CONSOLIDATED ADMINISTRATIVE SERVICES, CAPITAL
                        PROJECT AND PROGRAMMING INTEGRATED, POLICY AND PLANNING ALIGNED




                        The actual organizational structure could be determined as part of the
                        implementation plan described in the next section of this report, but
                        ultimately it will be by the direction of the future Executive Director or an
                        integrated agency.




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                IMPLEMENTATION

                        The purpose of this engagement and project report was to identify service
                        sharing or consolidation opportunities between the CMA and ACTIA, and
                        determine if streamlining or efficiencies might be achieved if the two
                        agencies operated on a more integrated basis. Finally, the project was to
                        determine through a threshold analysis whether there was sufficient
                        information to allow policy makers to make a decision whether to move
                        forward with an implementation analysis and develop a plan for a possible
                        integration and potential consolidation. This report presents that analysis
                        and information and Management Partners recommends that if the
                        respective boards choose to move forward, the appropriate next step
                        would be to develop an implementation plan.

                        In the course of the assessment, Management Partners has developed
                        recommendations regarding the sharing of services with the goal of
                        ultimately merging the functions. In our experience with other local
                        governmental agency consolidations or mergers, the transition is most
                        successful when change moves forward at a deliberate pace, reducing
                        uncertainty and disruption to programs and projects. We have found that
                        delayed or partial integration or mergers:
                            • Negatively affect staff morale when job uncertainty extends
                                indefinitely, resulting in low productivity.
                            • Consume extra costs, but do not produce savings because slow
                                transitions become lost in day-to-day tasks, further extending the
                                time for completion and often resulting in further transition costs.

                        While deliberate and due course is recommended, there are several
                        organizational challenges which will need to be addressed in order for
                        service sharing or organizational integration to be successful.
                           • Despite the overlap of members on each governing board, staff
                               reports the organizational culture of the boards often appears
                               quite different. Therefore, the interests and policy approach of the
                               respective boards must be carefully considered during the
                               transition if integration moves forward.
                           • The general organizational culture of each organization is now
                               quite different and preservation of each agency’s strengths will
                               require close attention and strong leadership to ensure they are
                               inculcated into a combined organization.
                           • Both agencies support and manage significant projects and
                               programs; any hand-off of responsibilities will have to be carefully



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                                managed to minimize disruption of program services and project
                                schedules.

                        Each of the challenges to this project is manageable when proper care is
                        paid to each issue. Developing an even higher level of collaboration
                        between the boards is probably the simplest challenge. A facilitated
                        session or few sessions of the combined boards should be sufficient to
                        develop ground rules and collaborative processes which will allow the
                        boards to fulfill their separate missions without dominating a shared staff
                        to the detriment of the opposing mission. Eventually, legislative changes
                        may be desirable to combine the boards into a single body responsible for
                        the regional transportation missions.

                        This section of the report presents areas and issues that should be
                        understood before moving into an implementation plan, as well as
                        possible next steps.


                        Implementation Considerations
                        In this phase of a possible integration or consolidation of services,
                        implementation details and scoping would be developed more in depth
                        than in this threshold analysis. If the boards choose to move forward,
                        specific service areas would be identified for implementation over a
                        period of time, with target dates. The respective staff of each agency
                        would determine the scope and parameters and specifically identify the
                        detailed needs and steps that would have to occur, as well as associated
                        costs. The following represent key considerations that we believe are
                        important to be addressed when developing an implementation plan.
                             • Implementation should be phased, fluid and flexible during the
                                transition of the agencies, preserving the best of both
                                organizational cultures and minimizing the impact on project and
                                program delivery.
                             • Implementation should occur in a predictable manner to reduce
                                uncertainty for employees who may be impacted.
                             • Staff transitions and associated employee relations issues are
                                important. Careful attention to the interests and needs of all
                                employees should be on the critical path of any implementation
                                plan.
                             • Service sharing and choices about an organizational structure will
                                have employee/labor relations implications and costs.
                             • Any actions need to ensure that the spirit and morale of the
                                respective agencies is sustained and supported.
                             • Retention of professional engineering staff is critical to sustaining
                                project delivery schedules and commitments in the near term.
                             • The cost allocation for the service sharing plan must be agency
                                neutral. The plan will not be cost effective if additional overhead
                                costs are incurred by either organization at the fully burdened,
                                overhead rate.


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                              • Integration of finance and administrative services will require
                                specific performance measures to ensure that policies and
                                procedures regarding contracting and statutory or legislative
                                requirements are met.
                              • Integration of finance and administrative services may have
                                implications for the CMA cost allocation structure, which can be
                                managed but will require attention.

                        Management Partners recommends that if the boards of the respective
                        agencies chose to pursue an integration course, specific direction
                        regarding an overall implementation time period should be provided early
                        in the process. We further recommend that the implementation not be
                        unduly lengthy as this can be a distraction to both organizations, impact
                        employee morale through uncertainty about their own future and the
                        future leadership of an integrated organization. A lengthy integration path
                        can impact the leadership and work program of both organizations as
                        policies and procedures and policy priorities continue to be separate.
                        Once an overall integration period is determined, the development of
                        detailed implementation phases can follow.

                                 Recommendation        20:        Develop     a    phased
                                 implementation plan for presentation to the boards,
                                 providing the respective boards agree conceptually to
                                 an integration of services. The implementation plan
                                 would further scope the agreed upon service sharing
                                 opportunities and develop a specific plan for its
                                 implementation for presentation to the Executive Directors
                                 and the boards.       The implementation would also
                                 specifically address employee relations matters and
                                 specific costs associated with any proposed staff
                                 transitions.

                        Finally, Management Partners’ experience is that implementation of these
                        kinds of local government services is most successful and effective when
                        implemented by a third party, under the general direction of the executive
                        staff and policy makers. Ongoing operations and issues and the
                        associated workload do not allow existing staff to establish schedules and
                        monitor progress of such an implementation.

                                 Recommendation 21:            Designate a third party to
                                 oversee the general implementation of the integration
                                 by establishing schedules, monitoring progress and
                                 responding to issues as they emerge. The third party
                                 individual(s) or organization would report to both Executive
                                 Directors during the integration transition and period.




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                        Next Steps/Potential Schedule
                        If the CMA and ACTIA boards agree on the merits of an integrated
                        organization by the start of the new fiscal year and choose to proceed to
                        the development of an implementation plan, Management Partners
                        recommends the following next steps and potential implementation
                        schedule:

                        1. Early July 2009: Contract with firm to develop an implementation
                           plan
                        2. July to November 2009:            Meet with staff to develop the
                           implementation plan
                        3. December 2009: Present implementation plan to the respective
                           boards
                        4. Calendar Year 2010 Quarter 2 – Implement integration of financial
                           and administrative services functions
                        5. Calendar Year 2010 Quarter 4 – Complete executive management
                           merger
                        6. Calendar Year 2011 Quarter 2 – Merge program and project
                           delivery functions
                        7. Mid 2013 – Collocate staff (unless subleases can be found or other
                           lease changes can be negotiated earlier)




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                CONCLUSION

                        Both the CMA and ACTIA have a long and well respected standing at the
                        local, state and federal levels in the field of transportation planning,
                        capital project development and delivery and innovative transportation
                        programs. The staff and executive leadership have and continue to serve
                        Alameda County well, securing hundreds of millions of dollars in
                        transportation funding based on sound transportation planning and
                        programming, as well as implementing the second of two half-cent sales
                        tax measures with overwhelming support for the voters. The Bay Area
                        transportation network is complex, competitive and the residents of
                        Alameda County would benefit financially through the integration and
                        eventual merger of the CMA and ACTIA. Toward that end, this report
                        recommends that the respective boards of both agencies proceed to
                        develop an implementation plan as the next phase.




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ATTACHMENT A: SUMMARY OF RECOMMENDATIONS

Recommendation 1: Merge the staffs of ACTA/ACTIA and CMA into a single organization
under a single Executive Director.

Recommendation 2: Add 0.5 FTE position for support of the dual organization’s public outreach
and publication efforts.

Recommendation 3: Consolidate Board Secretary and Clerk of the Board duties as part of a
plan to share administrative services between the agencies.

Recommendation 4: Reduce the number of contracts for lobbyists at the time of contract
renewal to allow both organizations to be served by a single lobbyist at each level of
government.

Recommendation 5: Consolidate the financial and administrative services of the organizations.

Recommendation 6: Eliminate one executive financial management position and assign the
financial management responsibilities for both agencies to the remaining position.

Recommendation 7: Add a Senior Management Analyst position to provide additional support
to the consolidated financial services function.

Recommendation 8: Combine payroll services into a single contract with ADP or another service
provider.

Recommendation 9: Preserve existing accountant positions to support accounting and financial
transactions resulting from the integration of the financial services between the two agencies.

Recommendation 10: As part of an implementation plan, seek board direction regarding the
costs and benefits of a single audit contract.

Recommendation 11: Develop a single investment policy at the earliest opportunity utilizing the
current investment management practices.

Recommendation 12: Expand the current contract with CMA’s Human Resources consultant to
provide support for ACTIA.

Recommendation 13: Merge e-mail, file and print sharing systems, shut down redundant
computers and reduce replacement budgets.

Recommendation 14: Merge financial systems to provide more seamless access and simpler
support of the accounting information and financial transaction records of both organizations.

Recommendation 15:          Merge project management data from both agencies into a single
software package.

Recommendation 16: Assign 0.5 FTE of the recommended Senior Management Analyst
position to provide contract and procurement support for both agencies.


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Recommendation 17: Conduct a facilitated exchange of project and meeting responsibilities
between the agencies, rebalancing responsibilities to eliminate redundancy within the Project
Controls Team.

Recommendation 18: Conduct a competitive bid for a single Project Controls Team contract as
soon as practical following the merger of project responsibilities.

Recommendation 19: Locate all staff in the same office space at the termination of the current
leases or earlier if subleases or other arrangements can be made.

Recommendation 20: Develop a phased implementation plan for presentation to the boards,
providing the respective boards agree conceptually to an integration of services.

Recommendation 21: Designate a third party to oversee the general implementation of the
integration by establishing schedules, monitoring progress and responding to issues as they
emerge.




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ATTACHMENT B: LIST OF PROGRAMS, PLANS AND PROJECTS

                    Alameda County Congestion Management Agency (CMA)



     Agency                                     Programs/Plans

      CMA
               Countywide Transportation Plan (updated every four years)
               Congestion Management Program (updated every two years; monitored
               annually)
               MTC Local Streets and Roads Program (federal STP)
               MTC Lifeline Funding Program (various federal and state funding sources)
               MTC Transportation for Livable Communities (TLC) Program (various funding
               sources)
               MTC Regional Bicycle/Pedestrian Program (various federal funding sources)
               TDA Article 3 Bicycle/Pedestrian Program
               State Transportation Improvement Program (STIP) – every two years plus
               ongoing monitoring and support of applicants
               Transportation Fund for Clean Air (TFCA) -- annually
               At Risk Monitoring for federal, state, TFCA, CMA TIP, exchange and TLC
               funded projects -- ongoing
               CMA Exchange Program -- 16 projects
               CMA Transportation Improvement Program (TIP) – 51 active projects
               Altamont Commuter Express rail service (SJRRC lead)1
               I-80 Central Rail Corridor Study
               East Bay Bus Rapid Transit Enhancement Plan
               Countywide Bicycle Plan (updated every four years)
               Community Based Transportation Plans (5 plans total)
               Central County Freeway Study, including PID and follow-up PSRs1
               Countywide Model and Land Use Analysis Program
               SB 375 Implementation Program with MTC/ABAG
               Guaranteed Ride Home (GRH) Program
               Transit Oriented Development (TOD) Program
               Transportation and Land Use Program (T Plus)
               Truck Parking Facilities Plan
               Truck Travel Demand Model

1
    Indicates project or program common to CMA and ACTA/ACTIA

Note: The CMA is the lead on all programs, plans and projects listed in Attachment B unless
otherwise stated.




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     Agency                                        Projects

      CMA
               SMART Corridors, Webster Street, Alameda
               I-80 Gilman Roundabout Environmental and PSR
               I-880 Marina Interchange Improvements
               Grand MacArthur Corridor Transit Enhancements
               I-580 San Leandro/ Oakland Soundwall
               I-80 Integrated Corridor Mobility (ICM) Project1
               I-880 23rd/29th Operational Improvements
               I-880 SB HOV Lane Extension - Marina to Hegenberger
               San Pablo Rapid Bus Stop Improvements1
               Telegraph Corridor Rapid Bus1
               SMART Corridors – Incident Management
               SMART Corridors - Operations and Management
               SMART Corridors – WiFi Bus
               Transportation Management Center (TMC) – Oakland/CMA
               I-580 Center-to-Center Project, Tri Valley
               I-580 Corridor Mitigation
               I-580 Corridor ROW for Transit1
               I-580 EB HOT Lane Design and Construction
               I-580 EB HOV Design and Construction (CMA/Caltrans)
               I-580 Westbound Auxiliary Lanes - 3 segments (CMA Lead on two segments) 1
               I-580 Traffic Management Program
               I-580 WB HOV Lane Design and Environmental Documentation
               I-580 WB Ramp Metering Project
               I-580 WB HOT Lane Design and Construction
               I-680 Southbound HOV Lane Design and Construction (CMA/Caltrans)
               I-680 SB HOT Design and Construction1
               I-880/I-680 Cross Connector PSR1
               Rte 84 (Dumbarton) HOV Lane (CMA/Caltrans)
               I-880 ICM Project Design
               Ardenwood Park & Ride Lot1

1
    Indicates project or program common to CMA and ACTA/ACTIA

Note: The CMA is the lead on all programs, plans and projects listed in Attachment B unless
otherwise stated.




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ATTACHMENT C: LIST OF PROGRAMS AND PROJECTS

      Alameda County Transportation Improvement Authority (ACTIA)/Alameda County
                           Transportation Authority (ACTA)



                                ACTIA Pass-Through Programs
 Bicycle and Pedestrian Safety
 o Pass-through Fund Programs


  Local Streets and Roads
 o Pass-through Fund Programs
 Mass Transit
 o Pass-through Fund Programs


 Paratransit
 o Pass-through Fund Programs


 Transit Center Development
 o Technical Assistance Program



                                      Grant Project Name



 I-580 Undercrossing, Alamo Canal Trail

 Union Pacific (Oakland Subdivision) Railroad Corridor Improvement Plan

 Bike Racks for New Buses

 Aquatic Park Connection Streetscape Improvement Project - Phase 1 Bike & Ped
 Improvements

 Alameda-Oakland Estuary Crossing Feasibility Study

 Buchanan Bicycle/Pedestrian Path

 Ashby BART Station/Ed Roberts Campus Pedestrian and Bicycle Access and Safety Project

 Travel Choice - Berkeley




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                                     Grant Project Name



 Iron Horse Trail Feasibility & Engineering Study

 MacArthur Transit Hub Streetscape Improvement Project

 Pleasanton Pedestrian & Bicycle Master Plan

 Bay Trail Slough Bridge


 Bicycle Safety Education Classes

 Safe Routes to School (SR2S) Alameda County Partnership

 East Bay Greenway Environmental Review and Implementation Strategy 2

 Lakeshore/Lake Park Avenue Complete Streets Project, Ped and Bike Access

 Alamo Canal Regional Trail - Interstate 580 Undercrossing

 Iron Horse Trail Feasibility Study - Dublin BART to Santa Rita Road

 Irvington Area Pedestrian Improvements

 Albany Pedestrian Master Plan and Update to the Albany Bicycle Master Plan

 Newark Pedestrian and Bicycle Master Plan

 Alameda Countywide Bicycle Plan Update

 Safe Routes to Schools Alameda County Partnership

 Bicycle Safety Education Program

 Tri-City Senior Walk Clubs

 TravelChoice New Residents


 Ardenwood Express Bus Park and Ride Improvements



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                                        Grant Project Name



 Express Bus Connectivity - Major Hubs

 LAVTA Bus Rapid Transit


 Tri-Valley Taxi Study for Seniors and Disabled


 Ashby BART Station/Ed Roberts Campus

 Tri-City Travel Training Pilot Project 2

 Dimond-Fruitvale Senior Shuttle and East Oakland Senior Shuttle Expansion

 North Alameda County Group Trip Program

 Outreach and Travel Training Project of North Alameda County

 Tri-Valley Travel Training Program

 East Bay Paratransit Rider Care Specialist


 Interactive Voice Response (IVR)/Web-based Scheduling Software

 New Freedom Fund Grant Match

 EBP Mobile Data Terminal/Automatic Vehicle Locator Project

 Central County Taxi Program Expansion and "Guaranteed Ride Home" for Travel Training
 Participants

 Countywide Mobility Coordination 2

 Driving Growth through Transportation: Special Transportation Services for Individuals with
 Dementia

 BORP North County Youth/Adults with Disabilities Group Trip Project

 Mobility Matters!

 Albany Senior Center Community Shuttle Bus



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                                       Grant Project Name



    94608 Area Demand Response Shuttle Service for Seniors and/or People with Disabilities

    VIP Rides Program

    Hayward Round About - Paratransit Shuttle Service

    GRIP - Grocery Return Improvement Program

    TAXI - UP & GO Project!

    Downtown Route

    Rider Assessment Service

    Paratransit Vehicle Donation Program and Dial-a-Ride Scholarship

    LAVTA Livermore Senior Housing Shuttle

    Learn BART! A Picture Guide to Riding BART

    Volunteers Assisting Same Day Transportation and Escorts



2
    Indicates ACTIA serves in a lead role; in all others ACTIA serves in an oversight role.




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                                           Projects

ACTA
I-880/Mission Boulevard (Route 262) Interchange Reconstruction 3
Mission/Warren/Truck Transfer Grade Separation Project
I-880 to Mission Boulevard East-West Connector3
Route 238/Mission-Foothill-Jackson Corridor Improvement
I-580/Redwood Road Interchange 3
Central Alameda County Freeway System Operational Analysis
Castro Valley Local Area Traffic Circulation Improvement
Right of Way Post-Certifications Close-out and Property Transfer Management Project 3
ACTIA
Altamont Commuter Express Rail
BART Warm Springs Extension
BART Oakland Airport Connector
Downtown Oakland Streetscape Improvements – Latham Square Segment
Downtown Oakland Streetscape Improvements – Telegraph Avenue Segment
Downtown Oakland Streetscape Improvements – Old Oakland Streetscape Segment
Downtown Oakland Streetscape Improvements – Broadway Segment
Fruitvale Transit Village Project
Fruitvale BART Station Parking Garage
Union City Intermodal Station
Telegraph Avenue Corridor Bus Rapid Transit
San Pablo Corridor Rapid Bus
Telegraph Avenue Corridor Rapid Bus
I-680 Sunol Express Lane
Iron Horse Transit Route
I-880/Broadway-Jackson Interchange Improvement 3
I-880/Washington Avenue Interchange Improvement
I-580/Castro Valley Interchange Improvements 3
Lewelling/East Lewelling Boulevard Widening
I-580 West Bound-Auxiliary Lane (Fallon Road to Tassajara Road)
I-580 West Bound Auxiliary Lane (Airway Boulevard to Fallon Road)
I-580 East Bound Auxiliary Lane (El Charro Road to Airway Boulevard)
Route 92/Clawiter-Whitesell Interchange and Reliever Route
Oakland Local Streets Improvements Project
Hesperian Boulevard/Lewelling Boulevard Intersection Improvement – Phase 1 (San Leandro
Segments)


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                                            Projects

Hesperian Boulevard/Lewelling Boulevard Intersection Improvement – Phase 2 (County
Segments)
Westgate Parkway Extension – Phase 1 (Williams Street to Timothy Drive)
Westgate Parkway Extension – Phase 2 (Timothy Drive – Davis Street Connection)

East 14th Street/Hesperian Boulevard/150th Street Intersection Improvements

Newark Local Streets Improvements Project
I-238 Widening 3
680/I-880 Cross Connector Studies
Isabel Avenue – Route 84/I-580 Interchange
Route 84 Expressway 3
Dumbarton Rail Corridor
I-580 Corridor/BART to Livermore Studies
Vasco Road Safety Improvement Project
I-80 Integrated Corridor Mobility Project

3
 Indicates ACTA/ACTIA is lead sponsor of this project; ACTA/ACTIA serves as a co-sponsor in
all other projects.




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           ATTACHMENT D: PEER AGENCY INFORMATION

                                                                                                                                                    Administrative Services (Public or Private Agency Assistance)


                                                                    # of Capital
                                                     Total #        Projects by                                        Half Cents        Benefit
               Agency             Total # Staff    Admin. Staff    Agency Itself      Budget          Admin Cost       Sales Tax?     Administration     Payroll    Accounting      Legal Services        IT             HR
            ACCMA                       25             10               29*          $54 million       $5 million          No           In-house         Contract    In-house          Contract         Contract       Contract
                                                                                                                                                          (ADP)                                         (Novni)
            ACTIA                         9               4             44*          $196 million      $4 million            Yes         In-house        Contract     In-house         Contract         Contract      In-house
                                                                                                                                                          (ADP)                                        (Lanlogic)
            Contra Costa                 19               6              10          $152 million      $3 million            Yes         In-house        Contract     Public           Contract         Contract       Contract
            Transportation                                                                                                                                (ADP)      (County)                          (Endsight)      (Nolte)
            Authority                                                                                                                                                                                                     &
                                                                                                                                                                                                                      In-house

            San Francisco                33               6              28          $235 million      $8 million            Yes       Public (City      Contract    Public (City   Public (City and    Contract      In-house
            Transportation                                                                                                             and County         (ADP)     and County)        County)           (SPTJ
            Authority                                                                                                                  administers                       &                 &           Consulting)
                                                                                                                                      dental benefit)                 Contract           Contract
                                                                                                                                                                      (Ajilon)

            San Mateo County              8               1              1**          $3 million           N/A                No      Public (County)     Public       Public       Public (County)       Public        Public
            C/CAG                                                                                                                                       (County)     (County)                           (County)      (County)

            Santa Clara Valley         2,186             57           16***          $372 million      $41 million          Yes****      In-house        In-house     In-house         In-house         In-house      In-house
            Transportation
            Authority

            All Budget figures contain operating budget and capital project budgets including carryovers from prior years

            *ACTIA figure includes eight ACTA projects and one in close-out phases, ACTIA and ACCMA share responsibilities in six projects
            **San Mateo County C/CAG has one capital project. However, San Mateo County Transportation Authority (SMCTA) is responsible for most of the capital projects in the County and administering the half-cent sales tax
            program.
            ***Total number of project seems low considering the size of the agency, but the projects listing appears to be more on a macro level.
            ****VTA has two 1/2-cent sales tax programs and one pending:
             A. The 1976 half-cent Sales Tax was approved by County voters in 1976 to fund VTA's transit operations and transportation improvements.
             B. In November 2000, the voters in Santa Clara County approved Measure A, a 30-year half-cent sales tax devoted to specified public transit capital improvement projects and operations.
             C. Pending tax is the 1/8 cent tax passed by the voters in 2008 to fund operations and maintenance for BART to Silicon Valley.




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                                Page 140
                                        Attachment E




ALAMEDA COUNTY CONGESTION MANAGEMENT
AGENCY/ALAMEDA COUNTY TRANSPORTATION IMPROVEMENT
AUTHORITY – MERGER IMPLEMENTATION PLAN



January 2010




                                       Page 141
                                                         January 11, 2010


Mr. Dennis Fay, Executive Director, ACCMA
Ms. Christine Monsen, Executive Director, ACTIA
1333 Broadway, Suites 220 and 300
Oakland, CA 94612

Dear Mr. Fay and Ms. Monsen:

We are pleased to submit the Merger Implementation Plan to consolidate financial and
administrative services for the Alameda County Congestion Management Agency (CMA) and
the Alameda County Transportation Improvement Authority (ACTIA). Management Partners
developed the Merger Implementation Plan to provide the steps and general timing for the
actions needed to merge the staff and business activities of the separate transportation
agencies into a new single organization. The Merger Action Plan provides a course and plan to
guide the CMA and ACTIA staff, as well as the Board of Directors, to strategically and
successfully merge the agencies.




                                                         Sincerely,




                                                         Gerald E. Newfarmer
                                                         President and CEO




2107 North First Street, Suite 470   www.managementpartners.com                   408 437 5400
San Jose, CA 95131                                                                Fax 453 6191
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                         TABLE OF CONTENTS

                         EXECUTIVE SUMMARY...........................................................................1 
                         PROJECT APPROACH ............................................................................6 
                            INTERVIEWS.............................................................................................6 
                            DOCUMENT REVIEW .................................................................................7 
                            AD HOC COMMITTEE ................................................................................7 
                            MERGER ACTION PLAN TABLE ..................................................................8 
                         MERGER ACTION PLAN .........................................................................9 
                            ORGANIZATION OF THE PLAN ..................................................................10 
                            AGENCY FORMATION .............................................................................13 
                            HUMAN RESOURCES ..............................................................................18 
                            FINANCIAL SERVICES .............................................................................23 
                            GENERAL ADMINISTRATION ....................................................................28 
                            PROGRAMS AND PLANNING ....................................................................31 
                            PROGRAMMING ......................................................................................32 
                            CAPITAL PROJECTS ...............................................................................33 
                            FUTURE ACTIONS ..................................................................................35 
                            MERGER TIMELINE .................................................................................36 
                         ALTERNATIVE FUNCTIONAL ORGANIZATIONAL MODELS .............37 
                         CONCLUSION.........................................................................................48 
                         ATTACHMENT A – TRANSITION COST AND POST TRANSITION
                         SAVINGS SUMMARY .............................................................................49 
                         ATTACHMENT B – MERGER TIMELINE...............................................52 
                         ATTACHMENT C – POSSIBLE LEGAL STRUCTURES MEMO ...........53 




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                         Figures

                         Figure 1: Option 1 – Administrative Integration with Separate Programs
                         and Projects.............................................................................................39 
                         Figure 2: Option 2 – Consolidated Administrative Services, Programming
                         Separated, Policy and Planning Aligned and Consolidated Capital Project
                         Delivery....................................................................................................40 
                         Figure 3: Option 3 – Consolidated Administrative Services, Capital
                         Project and Programming Integrated, Integrated Policy and Planning ....41 
                         Figure 4: Option 4 – Consolidated Administrative Services,
                         Programming, Planning and Policy Separated, and Consolidated Project
                         Delivery....................................................................................................43 
                         Figure 4: Option 5 – Human Resources Separated, Finance and
                         Administration Consolidated, Programming Separated, Integrated Policy
                         and Planning and Consolidated Capital Project Delivery ........................45 
                         Figure 6: Option 6 – Finance Separated, Human Resources and
                         Administration Consolidated, Programming, Planning and Policy
                         Separated, and Consolidated Capital Project Delivery............................46 




                         Tables

                         Table 1: Threshold Analysis Investment...................................................2 
                         Table 2: Major Merger Action Plan Milestones .........................................4 
                         Table 3: Major Merger Milestones .........................................................12 




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                EXECUTIVE SUMMARY

                         In January 2009 the Alameda County Transportation Improvement
                         Authority (ACTIA) and the Alameda County Congestion Management
                         Agency (CMA) initiated a study to identify service sharing and/or
                         consolidation opportunities between the two agencies. The study
                         examined whether mission critical responsibilities could be delivered in a
                         more streamlined and cost effective manner if the two agencies operated
                         on a more integrated basis. Another project objective was to determine if
                         there was sufficient information to allow policy makers to make a decision
                         about whether to move forward with an implementation analysis and
                         develop a plan for a possible integration and potential consolidation. A
                         final report delivered to both agencies in July 2009 concluded that there
                         were in fact attractive opportunities for a range of service sharing and
                         integration efforts. The greatest opportunities for consolidation and
                         efficiency improvement were in the areas of financial services,
                         administrative services and capital project delivery.

                         In May 2009 Management Partners made a presentation to the ACTIA
                         and the CMA Boards of Directors during a joint meeting. The presentation
                         described the opportunities for service sharing and potential merger of
                         operations, opportunities for cost efficiencies and estimated annual
                         savings. The presentation pointed out that the ten-year return on
                         investment was very good, with up-front costs relatively minor considering
                         the long term goals and benefits. The joint meeting also surfaced the
                         potential for possibly blending the Boards of Directors into one Board
                         either as part of the merged agency process or during the next
                         reauthorization of the sales tax effort.

                         That engagement was designed as a threshold analysis or a high level
                         examination of opportunities for service sharing and/or consolidation to
                         determine whether they would be compelling enough to move forward
                         with an implementation analysis and plan. In that report, Management
                         Partners stated that significant costs could be saved and benefits could
                         be achieved through service sharing.

                         In the threshold analysis study, the transition was envisioned as a project
                         with four phases. Each phase identified specific transition costs and
                         yearly savings that should result from the completion of the phase. The
                         phases were identified as:

                             •   Phase I – Integration of financial and administrative services
                             •   Phase II – Merger of executive management function



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                                  •   Phase III – Merger of program and project delivery functions
                                  •   Phase IV – Collocation of staff (unless subleases can be found or
                                      other lease changes can be negotiated earlier)

                         Table 1 shows the estimated savings for each phase identified in the
                         threshold analysis.

                         TABLE 1: THRESHOLD ANALYSIS INVESTMENT


                            Project      One Time Transition       Ongoing Annual
                            Phase           Cost Range                Savings
                            I           $220,000 to $270,000    $151,000 to $171,000

                            II          $230,000                $160,000

                            III         $120,000 to $210,000    $280,000 to $460,000

                            IV          $110,000                $100,000

                            Total       $680,000 to $820,000    $643,000 to $891,000


                         A summary of the recommendations with associated transition costs and
                         possible savings was presented in the July 2009 report. The summary
                         can be found as Attachment A to this Merger Implementation Plan.

                         The presentation to the Joint Board(s) of Directors of the CMA and ACTIA
                         in late May as well as the July 2009 report recommended the
                         development of an implementation plan as the next step in a potential
                         consolidation or merger. The implementation plan would further scope the
                         agreed upon service sharing opportunities and develop a detailed plan for
                         presentation to the executive directors and the respective Boards of
                         Directors.

                         The joint Boards agreed with this recommendation and directed staff to
                         take the next step and develop a full merger implementation plan for their
                         consideration. The Boards also established an Ad Hoc Committee with
                         members from each Board of Directors to oversee and provide general
                         direction during the development of the merger implementation plan.

                         Management Partners developed the Merger Action Plan (transmitted
                         separately in electronic form) to provide the steps and general timing for
                         the actions needed to merge the staff and business activities of the
                         separate transportation agencies into a new single organization.
                         Throughout the development of the plan, Management Partners received
                         general comments from the Ad Hoc Committee of Board members. The
                         executive directors of both agencies and legal counsel were also involved
                         in the review and development of the action plan.




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                         The plan is based on this general oversight and review, as well as
                         Management Partners’ efforts to define the appropriate action steps,
                         coupled with timing and logistical considerations. The Merger
                         Implementation Plan has been reduced to two major phases with the
                         consolidation of the independent organizations into a single operating
                         entity in the first phase and office space consolidation in the second. The
                         plan identifies several keys steps occurring at particular times. The
                         completion of these steps by the indicated timeline will be necessary to
                         reach the goal dates. If the Boards of Directors of ACTIA and CMA make
                         choices other than those anticipated in the plan, they may have an effect
                         on the timing or ultimate outcome.

                         Several fundamental assumptions evolved as the design of the plan
                         emerged. They are important for understanding the context of the
                         proposed merger.

                         1. With any major organizational change there is uncertainty in the
                            process. A complex merger such as this almost guarantees that a
                            precise course of action may not proceed exactly as predicted.
                            However, the Boards have clearly indicated their interest in the capital
                            projects and other activities of the agencies proceeding smoothly and
                            in a timely manner during the transition. The plan is intended to
                            minimize a negative impact on the continued successful
                            implementation of the capital projects for which each agency is
                            responsible.

                         2. A joint powers authority (JPA) is proposed to be formed as the service
                            organization, employing staff and executing the services required of
                            ACTIA and CMA. To enable a successful transition of the agencies,
                            their staff, programs and projects, the JPA should be developed and
                            approved by the member agencies and Boards of Directors by late
                            July 2010, with the JPA going into start-up operations by September
                            1, 2010.

                         3. The ACTIA and CMA Boards are presumed to continue to exist for a
                            period of time because of statutory references to each Agency, but
                            will modify their organizational documents, with the requisite
                            approvals, so that their Boards are the same as the Board for the new
                            JPA. ACTIA and CMA will be members of the new JPA and it will
                            fulfill their purposes, projects and programs. The Alameda County
                            Transportation Agency (ACTA) may also join the new JPA or it may
                            remain separate and contract with the new JPA as it does with ACTIA
                            now. The Action Plan will not be significantly affected if this occurs.

                         4. The Citizen’s Watchdog Committee for ACTIA would continue under
                            the new proposed JPA, serving in the same or similar role as they do
                            currently.




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                         5. Under the new JPA, only three positions are initially proposed to be
                            consolidated in the new agency:
                                   Executive director
                                   Finance and administration director
                                   Clerk of the Board(s)

                             Current employees of ACTIA and CMA would transition to the JPA
                             effective March 1, 2011 or earlier depending on the reconciliation of
                             the benefit structure.

                         6. The organizational structure of the JPA will be defined by the new
                            executive director. No specific structure is assumed other than the
                            need for a Finance and Administration Division and one or more
                            operational divisions.

                         7. The plan includes transition costs. These are one-time costs for
                            external goods or external services required to combine systems and
                            business processes, as indicated in Management Partners’ earlier
                            threshold analysis report. Personnel transition costs are not indicated,
                            as those costs will ultimately be defined and decided by the agency
                            boards.

                         8. The salary and benefit structures of ACTIA and CMA are different and
                            the reconciliation under a new JPA will require careful attention. The
                            cost impact of the compensation elements of the transition cannot be
                            determined until options are developed and approved by the Board(s)
                            of Directors.

                         Major milestones as described in the Merger Action Plan are included in
                         Table 2.

                         TABLE 2: MAJOR MERGER ACTION PLAN MILESTONES

                  Event                                                             Target Date
                  Approval by Boards to proceed with a merged                  January 28, 2010
                  agency and new JPA
                  JPA structure developed and approved by                      February 25, 2010
                  respective Boards
                  JPA approved by member agencies and Boards of                July 31, 2010
                  Directors
                  Selection of Clerk of the Board                              August 31, 2010
                  New JPA operations begin                                     September 1, 2010
                  Selection of new executive director, if open                 September 23,
                  recruitment directed                                         2010
                  New executive director begins                                November 1, 2010
                  Selection of finance and administration director for         December 1, 2010
                  merged agency
                  Employees transition to JPA                                  January-March,
                                                                               2011
                  Single accounting system begun                               July 1, 2011
                  Complete integration of operations                           January 18, 2012



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                  Consolidation of office space                               November 2014
                         The Merger Action Plan steps have been grouped into the following major
                         services areas, each of which contains a series of discrete subcategories:

                                 Agency Formation
                                 Human Resources
                                 Finance - Accounting, Purchasing and Budgeting
                                 General Administration
                                 Programs and Planning
                                 Programming and Grant Management
                                 Capital Project Delivery
                                 Future Actions

                         As stated in the July 2009 report, mergers or consolidations require a
                         commitment to long-term goals. Once the project has begun, the process
                         should move deliberately in accordance with an agreed upon
                         implementation plan and schedule. The Merger Action Plan described in
                         this report provides a course and plan to guide CMA and ACTIA staff and
                         Boards of Directors to strategically and successfully merge the agencies.

                         Attachment B provides a more extensive timeline of significant events and
                         milestones expected to occur during the merger project.




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                PROJECT APPROACH

                         Management Partners identified consolidation and service sharing
                         opportunities in the July 2009 report on the subject. The threshold
                         analysis focused on determining commonalities associated with each
                         agency’s organizational structure, operational practices, business policies
                         and processes, and resources supporting the respective missions, goals
                         and strategic directions. Using that information as a foundation,
                         Management Partners began this project by collecting information in
                         support of a thorough understanding of the management, operations,
                         staffing, organizational culture, and the use of resources in both the CMA
                         and ACTIA organizations. We used standard analytical and management
                         assessment techniques in this effort, which included interviews,
                         documents, and a review of business and administration practices of
                         each agency. We analyzed data provided by the respective finance and
                         administrative functions, human resources services as well as operational
                         systems, roles and responsibilities. We then mapped the actions that are
                         necessary to achieve a merger of the operations of the agencies.


                         Interviews
                         Management Partners conducted in-depth interviews with executive,
                         senior and mid-management staff from both ACTIA and the CMA.
                         Interviews were designed to gain an understanding of the scope of
                         program and project delivery commitments and obligations, the
                         organizational structure, staffing levels, and administrative and financial
                         services functions needed to meet the needs of each agency, as well as
                         the implications for a merged agency. The lead contract legal counsel for
                         both agencies was also interviewed and consulted with extensively.
                         Those interviewed included:

                             •   ACTIA Executive Director
                             •   CMA Executive Director
                             •   ACTIA and CMA Legal Counsel
                             •   Chief Deputy Director, CMA
                             •   Deputy Director, ACTIA
                             •   ACTIA Finance and Administration Manager
                             •   CMA Finance and Administration Director
                             •   CMA Accounting Manager
                             •   ACTIA Senior Accountant
                             •   CMA Contracts Administrator



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                             •   CMA Executive Assistant and Board Secretary
                             •   ACTIA Clerk of the Authority
                             •   Human Resources Consultant


                         Document Review
                         Information was obtained regarding organization structure, staffing levels,
                         business processes and services, administrative tasks, human resources
                         and budgets. Management Partners reviewed budget data and project
                         lists, organizational charts and other management systems, and
                         procedures and business information that may influence operational
                         effectiveness and successful project and program delivery, including:

                             •   CMA Budget Summary FY 2010
                             •   ACTA/ACTIA Budget Summary FY 2010
                             •   ACTIA/CMA Job Descriptions
                             •   Organizational Charts
                             •   CMA Cost Allocation Goals
                             •   CMA Employee Census 2009
                             •   CMA Staff Monthly Cash Flow Report FY 2010
                             •   CMA Salary and Benefit Resolution
                             •   ACTIA Salary and Benefit Resolution
                             •   CMA Policies and Procedures Manual Section 1 – Employee
                                 Handbook
                             •   ACTIA Revised Human Resources Manual, September 2008
                             •   CMA Summary of Post-Retirement Health Benefits Options
                             •   CMA Benefit Information Summary 2009
                             •   CMA Employee Performance Appraisal Process and Forms
                             •   ACTIA Employee Performance Evaluation Forms
                             •   Contract Management Policies and Procedures
                             •   List of contracts for both ACTIA and CMA


                         Ad Hoc Committee
                         At their joint meeting in May 2009 the Board of Directors of ACTIA and
                         the CMA agreed to establish an Ad Hoc Committee to review and provide
                         general guidance during the development of the Merger Implementation
                         Plan. The Committee met five times to consider a range of topics and
                         issues which included:
                             • Schedule for the development of the Merger Implementation Plan
                             • Communication strategies
                             • Recruitment options and timing for an executive director of the
                                 merged agency
                             • Alternative functional organizational models
                             • Alternative legal structures of a merged agency, including the
                                 establishment of a new joint powers authority (JPA)



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                             •   Merger timelines and milestones
                             •   Composition options for the merged Board of Directors
                             •   Alternative titles for the merged agency
                             •   Employee relations and transitions

                         The Ad Hoc Committee also reviewed and provided comments about this
                         Merger Implementation Plan draft project report.


                         Merger Action Plan Table
                         The results of Management Partners’ analysis have been distilled into an
                         action plan consisting of the action steps and the recommended timeline
                         for completing each major category of action. We have titled this
                         document the “Merger Action Plan” (Plan) which has been transmitted
                         electronically in a format which will allow changes to the Plan as the
                         merger is implemented .

                         Throughout the development of the plan, Management Partners received
                         general comments from an Ad Hoc committee of Board members from
                         the respective Boards of Directors established to oversee development of
                         the implementation action plan. The existing executive directors of both
                         agencies were also involved in the review and development of the action
                         plan. The plan, as presented, is based on this general oversight and
                         review, as well as Management Partners’ own efforts to define the
                         appropriate action steps, coupled with timing and logistical
                         considerations.

                         The plan identifies several key steps occurring at particular times. The
                         completion of these steps at the times indicated will be necessary to
                         complete the plan by the goal dates. Other circumstances or merger
                         issues may require the Boards or staff of ACTIA and CMA to make
                         choices other than those anticipated in the plan, which may have an
                         effect on the timing or ultimate outcome.




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                MERGER ACTION PLAN

                         The implementation phase has required forethought and planning
                         as the agencies anticipate moving forward with a merger. Each
                         service area must be carefully transitioned through use of a step-
                         by-step plan in coordination with staff from both agencies.
                         Although Management Partners and agency staff have committed
                         a fair amount of time to this effort, course corrections should be
                         expected. This is especially true because the agencies are
                         completing many of the projects and programs that define their
                         roles today. The demands of new and as yet unidentified missions
                         still are variable. To make the smoothest possible transition to a
                         merged organization, Management Partners recommends
                         assigning staff to specific plan tasks and regularly meeting to
                         discuss progress against transition goals and timelines.

                         Management Partners has prepared the draft merger action plan
                         and a suggested overall timeline to assist the agencies in
                         beginning this transition planning. The plan covers the following
                         broad service areas:

                         •   Agency Formation
                         •   Human Resources
                         •   Finance - Accounting, Purchasing and Budgeting
                         •   General Administration
                         •   Programs and Planning
                         •   Programming and Grant Management
                         •   Capital Project Delivery
                         •   Future Actions

                         Each action area includes discrete subcategories that will require
                         action during the transition and merger of the agencies. The plan
                         describes the key implementation action steps, lead responsibility
                         for completing the action, additional involved parties or agencies
                         affected, the completion goal date for each action step, as well as
                         the transition cost, if applicable. The plan will also be provided
                         electronically so that it can serve as a blueprint for action
                         throughout the transition. The plans are intended to be “living
                         documents” that will be regularly modified and updated as the
                         transition moves forward.

                         Attachment B is a summary timeline for the transition process.
                         Management Partners estimates that the primary tasks to



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                         accomplish the merger should take approximately 12 months,
                         following a decision to do so. After about a year, the agencies will
                         be operating as a single entity, although follow-up activity after the
                         transition is expected to continue for at least another year to
                         minimize disruption of transportation, planning, program and
                         capital project delivery operations. During that year many of the
                         issues regarding the mission, and revenue and staff allocation
                         should be clarified so that implementation will be well underway.


                         Organization of the Plan
                         The plan consists of a table for each of the service areas listed
                         above. Each of the broad service areas has groups of tasks that
                         are required to complete the merger in a particular sub-specialty,
                         which is titled “Discrete Subcategory.” Each of these
                         subcategories has a series of action steps with an estimate of time
                         to accomplish the task and a completion goal date. The personnel
                         responsible for completing the task are also indicated, as well as
                         other involved parties. A transition cost estimate from the earlier
                         Threshold Analysis is indicated at each step where appropriate,
                         although personnel related transition costs are not included, as
                         the Boards have not yet defined personnel transition policies.

                         Context of the Plan
                         The plan defines a set of activities that will occur under a fairly
                         tight timeline so that a target date of March 1, 2011 for
                         consolidation of all independent activities into a nominally merged
                         organization can be met. In the early months following the
                         transition, existing employees in planning, program oversight,
                         public outreach, and capital project delivery functions may
                         continue operating much as they have in the past to minimize the
                         disruption of projects and programs already in progress.

                         As the work program evolves in subsequent months, the new
                         executive director and senior managers should assign new and
                         developing projects and programs across the current
                         organizational boundaries based on availability, skills and
                         capacity. In that time period, project and program management
                         policies and procedures can be integrated by the new executive
                         director to more effectively serve the combined organization.

                         The Merger Action Plan does not specifically address the role of
                         the Board of the new JPA, except relative to actions that must be
                         taken in support of the merger. At the first routine Board and
                         executive retreat following the merger, it may be appropriate to
                         dedicate some time to combining or redefining Board
                         subcommittees. Similarly, no discussion is provided regarding the
                         role of citizen committees as that is the policy purview of the
                         existing and future Board(s) of Directors. The Citizen’s Watchdog



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                         Committee is required by enabling legislation and must remain in
                         place. The newly merged Board of Directors may define other
                         advisory committees or amend the roles of existing committees
                         following the formation of the JPA. It will be critical that the new
                         JPA inform those committees of changes in the organization and
                         provide the support needed by the committees to fulfill their roles.

                         Varying or Overlapping Timelines
                         ACTIA and CMA are similar organizations in many ways and the
                         directors and staff of both have intentionally adopted parallel
                         services and similar policies and procedures where possible. This
                         will serve as an advantage relative to many merging organizations
                         whose organizational culture, business processes and systems,
                         and sometimes core missions can be radically different.

                         Regardless, there are also slightly different business needs. In
                         some cases, such as significantly different employee
                         compensation packages, different choices were made by the
                         agencies. A single compensation plan will have to be developed
                         to ensure fairness in the newly unified employee pool and to
                         minimize administrative problems. These, and other issues, will
                         require resolution or accommodation to allow operations to
                         continue smoothly.

                         The critical tasks are included in the plan with timelines that
                         enable the major service areas to be functional when needed. In
                         the discussion below, several tasks are included that are not
                         intended for completion by the merger date. These tasks are
                         intentionally programmed for later to allow projects that are in
                         progress to be completed and other organizational changes to
                         settle in.

                         In a few cases, new issues may surface and force changes in the
                         timelines presented. For example, staff believes that it is feasible
                         for the legal structure of the new JPA to be defined and approved
                         by the necessary member agencies and respective Boards of
                         Directors during a five-month time period. However, Board
                         members or member agencies may require changes that could
                         extend the timeframe. Similarly, the respective agencies may
                         request changes or require clarifications that may affect ratification
                         or legal structure.

                         Delays in the successful recruitment of an executive director may
                         interfere with the target merger date. However, as long as there is
                         a general consensus that the merger should proceed, the
                         technical tasks can and should proceed while some of these
                         delays are sorted out. This will allow the merger to be completed
                         fairly soon after any obstacles are resolved.




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                         To coordinate the project activities and ensure timely completion
                         of the component tasks, Management Partners recommends that
                         a project manager be assigned to oversee the transition. Ideally
                         this should occur immediately following the January 28, 2010
                         meeting, assuming the consensus on the viability of the merger is
                         established by that date.

                         The project manager’s role will be:
                         • Coordinate the completion plan tasks by the responsible party
                         • Adjust the plan to address new issues
                         • Facilitate the resolution of obstacles

                         Major Milestones
                         In developing the plan, Management Partners identified several key
                         events that mark the progression of the merger project. Times for these
                         events were defined to meet targeted goals considered reasonable and
                         feasible to support the merger of the two agencies. The targeted goals
                         were also reviewed by the Ad Hoc Committee assigned to this project.
                         Each of these events is a critical milestone. The timely completion of
                         each will indicate successful progress toward completion of the overall
                         merger.

                         The major events in the plan are described in Table 3.

                         TABLE 3: MAJOR MERGER MILESTONES


                                       Event                   Target Date          Phase
                            Management Partner’s report        January 28, 2010     I
                            accepted and direction to
                            proceed by respective Boards
                            JPA structure developed and        February 25, 2010    I
                            approved by respective Boards
                            JPA approved by member             July 31, 2010        I
                            agencies and Boards of Directors
                            Selection of Clerk of the Board    August 31, 2010      I
                            New JPA operations begin           September 1, 2010    I
                            Selection of new executive         September 23, 2010   I
                            director, if open recruitment
                            directed
                            Selection of finance and           December 1, 2010     I
                            administration director for
                            merged agency
                            New executive director begins      November 1, 2010     I
                            Employees transition to JPA        January - March,     I
                                                               2011
                            Single accounting system begun     July 1, 2011         II




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                            Complete integration of          January 18, 2012          II
                            operations
                            Consolidation of office space    November 2014             II



                         Summary of Transition Costs
                         In the 2009 Threshold Analysis, Management Partners described a four-
                         phased approach to the merger of the agencies. Transition costs were
                         estimated at $680,000 with eventual operational cost savings of $670,500
                         or more per year following completion of the merger. Based on the input
                         of the Ad Hoc Committee, this implementation plan was constructed in a
                         timeframe that effectively combines the first two phases described in the
                         earlier report into a single phase.

                         Transition costs for the current Phase 1 consists of all activity prior to the
                         end of the 2011 fiscal year and covers all tasks for merging the separate
                         organizations into a single operating entity. That is estimated to be
                         approximately $570,000. Once the merger is complete an estimated
                         reduction in yearly operating costs of $570,000 is expected.

                         Phase 2 of the current plan corresponds to the fourth phase in the
                         Threshold Analysis report.       It consists of activities that will be
                         implemented following the end of fiscal year 2011. The transition costs
                         include moving and remodeling expenses from the consolidation of office
                         space. Ongoing savings can be expected as a result of consolidating staff
                         in one space and slightly smaller total space requirements.

                         Management Partners estimated that a space reduction as a result of
                         consolidation of staff and consultants will be possible. It is likely that
                         cannot occur until the expiration of current office leases in March 2014.
                         Transition costs consist of an estimated $110,000 in moving and other
                         office expenses related to the space consolidation with an ultimate
                         reduction of as much as $100,000 annually depending on the market for
                         office space at the time.

                         Following the independent audit of FY 2011 fiscal year by separate audit
                         firms, the merged agency can engage a single audit firm. Some minor
                         additional savings should result from a competitive bid of these services.


                         Agency Formation
                         This action area describes the discrete, key actions necessary to initiate
                         and implement the actual merger of the ACTIA and CMA into a new
                         agency. There are three major actions that are on the critical path to
                         consolidation or merger of the agencies, while two other components are
                         considered important to its overall success. Each is described below.




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                         Legal Structure
                         The first action required following a decision to merge the agencies by
                         each agency’s Board of Directors is the establishment and approval of the
                         legal structure necessary to embody the merged agencies. If the joint
                         Boards agree to move forward with the merger, Item 1.1 of the plan
                         describes the actions, steps and timelines associated with the formation
                         of a JPA to be responsible for the duties and responsibilities of both the
                         ACTIA and CMA. In a memo dated September 14, 2009 (Attachment C,
                         ACTIA and CMA legal counsel recommended (and Management Partners
                         agreed) that the most effective approach to a merger:

                                 “is to have the Board of Supervisors, all cities, BART and
                                 AC Transit agree to form a new joint powers authority
                                 which would have the powers of a congestion
                                 management agency and of ACTIA and possibly additional
                                 powers regarding AB32 and SB 375 requirements. The
                                 existing Boards of ACTIA and ACCMA would agree to join
                                 this new JPA and delegate to it their authority and their
                                 assets, and future income. ACTIA and ACCMA would also
                                 agree to change the composition and voting allocation of
                                 their Boards to match the composition and voting of the
                                 new JPA in order to avoid any confusion during the period
                                 that they would continue to exist.”

                         The action plan schedule calls for a fairly aggressive timeline in which the
                         proposed JPA legal structure and authorities would be authorized in
                         February 2010 and approval from the member agencies obtained during
                         the next five months. At the end of July 2010, the action plan proposes
                         that ACTIA and CMA approve contracts between a new JPA and existing
                         agencies for transition and services.

                         This timeline would require concentrated staff time to facilitate the
                         process and attend City Council and other agency public meetings to
                         explain and recommend approval of the new authority. This would come
                         at the same time that the respective agencies are planning for a Vehicle
                         Registration Fee ballot measure, reauthorization of the sales tax measure
                         and work on the Countywide Transportation Plan. The executive directors
                         of each agency stated that all these efforts will be staff and time intensive
                         during 2010; however, there may be opportunity for concurrent actions
                         among member agencies regarding the new ballot fee proposal and
                         approval of a new JPA. Cessation of the CMA and ACTIA as separate
                         operating entities, however, would not occur until the first quarter of 2011
                         to allow time for employee transitions to the new JPA and other
                         administrative matters to settle.

                         Timeframe: Spring-Summer 2010

                         Executive Director
                         A critically important task in the action plan is the recruitment and
                         selection of an executive director to lead the agency through the merger



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                         and provide leadership to unify the staff team carrying out the work of the
                         new organization. In approaching this effort, consideration needs to be
                         given to the goals and challenges of leading the consolidated agency
                         through the transition period and beyond. The individual selected for this
                         position will need to possess the skills, aptitude and experience to:




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                             •   Build a united agency from two agencies that have been working
                                 separately, although collaboratively, for almost 20 years.
                             •   Establish and communicate a cohesive agency mission.
                             •   Blend the staff of the two agencies into a productive and
                                 cooperative team.
                             •   Establish an organizational culture that blends the best of each
                                 existing agency into the merged organization.

                         Creating a newly merged agency will require significant focus and
                         continuity over a period of years. Therefore, it will be important that
                         whoever is selected for the position be committed to the agency for
                         several years.

                         Almost immediately following selection, the executive director of the
                         consolidated agency will be faced with challenging decisions, including:
                            • Selecting and implementing an organization structure for the
                                merged agency.
                            • Selecting senior members of his/her staff to lead various functions
                                from either incumbents or through open recruitment processes.
                            • Establishing a process to reconcile differences in policies and
                                procedures, salary levels and benefits between the two current
                                agencies.
                            • Overseeing the half-cent sales tax reauthorization process which
                                will already be well underway.
                            • Developing a long-term sustainable agency budget to support new
                                policy initiatives, such as climate action change, as well as
                                continued aggressive implementation of the capital projects.

                         Item 1.2 of the action plan describes the specific steps and proposed
                         timeline in support of this objective. The process proposes a selection
                         process decision (either a direct appointment of an existing executive
                         director or recruitment of a new one by an outside firm) by the joint
                         Board(s) of Directors in late February 2010. As the proposed JPA, if
                         approved, will not come into existence until late July 2010, the start date
                         for the new executive director is proposed to be in the fall of 2010. The
                         new executive director would want to be assured that there is, in fact, a
                         new agency to lead before committing to the position. The action plan
                         schedule, therefore, contemplates that the existing executive directors
                         would continue in their positions until the fall of 2010 as well.

                         Timeframe: Spring-Fall 2010.

                         Organization Structure
                         Management Partners believes it is premature, given the status of the
                         merger process, to formally designate an organization structure to be
                         implemented in the event the Boards agree to merge the staff of the two
                         agencies. Operational demands, staffing and timing could significantly
                         influence the future structure. It also may be appropriate to have an


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                         interim organizational structure during the transition to a merged agency.
                         Further, we recommend that the ultimate organizational structure of a
                         merged agency should be determined by the future executive director.
                         The reason for allowing the executive director to determine the structure
                         is that he or she will be responsible for ensuring that the Board’s goals
                         are achieved. Therefore, the person needs to be able to organize in a
                         way that best enables them and their staff to achieve the desired
                         outcomes. A subsequent section of this report entitled Alternative
                         Organizational Models describes six alternatives developed for illustrative
                         purposes to provide assurance that there are organization structures that
                         can viably support a merged agency.

                         Item 1.4 of the action plan describes the general approach and timeline
                         recommended to develop an organization structure for the merged staff
                         and organization. Actual implementation is not contemplated until the
                         spring of 2011 to allow the executive director sufficient time to understand
                         the work program of the entire agency, staffing levels and the interests,
                         skills and responsibilities of all staff before making a definitive
                         determination. It is possible that an organizational structure could be
                         implemented earlier, depending on transitions and the demands on the
                         new executive director.

                         Timeframe: Spring 2011

                         Organizational Development
                         Management Partners included this element in the Agency Formation
                         action area to reinforce the importance of organizational development
                         initiatives as the merged agency transitions and is formally implemented.
                         The action steps are intended to support the following objectives:
                              • Establishment of an organizational vision and values statement,
                                  and expectations for working together by the newly merged staff
                              • Creation of a vision and mission statement by the Board for the
                                  new agency and priorities for the first year
                              • Establishment of a set of expectations regarding accountability
                                  and performance by the management team
                              • Creation of a five-year strategic plan for the newly merged agency

                         Management Partners’ experience is that the overall success of the
                         merged agency will be dependent in great measure on the priority given
                         to this work and the leadership provided for its implementation. The action
                         plan proposes this work begin in 2011 and continue throughout the year.

                         Timeframe: Calendar Year 2011

                         Communications Plan
                         Action area 1 also sets forth a schedule for the development of a
                         communications plan regarding the merger of the two agencies, if
                         authorized to move forward. The component was included in recognition
                         of the importance of proactively developing and implementing a
                         communications plan with stakeholders, the media and member



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                         jurisdictions regarding the merits of the proposed merger, its objectives
                         and timelines. The plan should also address and clarify the roles of each
                         agency and the proposed merged agency with respect to the proposed
                         Vehicle Registration Fee and any sales tax reauthorization efforts.

                         Timeframe: Spring 2010


                         Human Resources
                         In order to maximize the effectiveness and efficiency of a merged
                         organization, and to ensure high employee morale and productivity, all
                         human resources policies, procedures and systems of the existing two
                         agencies must be reviewed, revised if appropriate, and integrated using
                         best practices as a guideline. These policies, procedures and systems
                         include human resource systems such as recruitment and testing,
                         employee relations and employee benefits; compensation policies and
                         salary levels; employee benefits; and policies covering work rules such as
                         conflicts of interest, computer/internet usage, employment of relatives and
                         respect in the workplace. In addition to integrating policies, procedures
                         and systems, employee transition issues must be addressed for any
                         existing employees who may not be joining the new agency.

                         Personnel Transitions
                         Upon merger of the existing agencies, three positions common to both of
                         the existing agencies are proposed to be consolidated. These positions
                         are the executive director, finance director and clerk of the Board(s).
                         Salary levels will need to be established for each of these positions and
                         recruitment process will need to be initiated. The Board and the
                         executive directors will decide what form these recruitment processes will
                         take, depending upon the position, e.g., direct appointment to the
                         position, internal recruitments open only to current employees of the
                         existing agencies or open recruitments.

                         The Merger Action Plan recommends that the executive director be
                         selected by September 23, 2010 and report for duty on or about
                         November 1, 2010. The recruitment process for the finance director
                         would run parallel to but slightly behind the recruitment process for the
                         executive director with selection on or before November 1, 2010 and
                         report for duty on or about December 1, 2010. Once the executive
                         director is selected, a list of final candidates for the finance director
                         position should have been assembled. Upon selection, but prior to
                         his/her actual start date, the executive director can review this list of final
                         candidates and make a selection for the new finance director. The
                         recruitment process for the Agency clerk of the Board should be a shorter
                         process and the selection can be made by the existing executive directors
                         late in August 2010.

                         During the course of these processes, the human resources (HR)
                         consultant, in consultation with legal counsel, will recommend a transition



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                         policy for those incumbents of the three positions who are not selected for
                         the new agency.        For those positions reporting to the executive
                         director(s), and with assistance from the HR consultant, transitions for the
                         out-placed individuals will be negotiated.

                         If it is determined that a new position of financial analyst or senior
                         management analyst is needed to support financial analysis or contract
                         management, the HR consultant and new finance director would develop
                         a job specification, recommend a salary level for the position to the Board
                         and then initiate a recruitment of the position. This decision, however, will
                         not be made until the new executive director reports and reviews the
                         organizational structure of the new agency.

                         Timeframe: Spring-Fall 2010

                         Human Resource Programs
                         There are no major issues in terms of consistency in the way the two
                         existing agencies manage basic HR programs. However, each HR
                         program needs to be reviewed carefully by the HR consultant for
                         compliance with best practices as well as federal and state law. Process
                         changes are needed in two areas, processing personnel actions and
                         timekeeping. Three other areas, overtime, leave of absence and
                         accommodations for disabled employees, need to be reviewed to ensure
                         compliance with federal and state law. Policies and procedures for all HR
                         programs should be in writing and included in a newly consolidated HR
                         manual.

                         Process Changes
                         The following processes will need to be addressed at a minimum:

                         •   Processing personnel actions. Both of the existing agencies process
                             personnel actions through a contract with ADP. Each agency;
                             however, maintains different processes with respect to documentation
                             which will need to be reconciled.
                         •   Timekeeping. Both the CMA and ACTIA process timekeeping and
                             payroll through ADP, however leave accruals and usage are managed
                             differently. For the CMA, records of leave accrued and used are
                             maintained electronically through ADP and earning statements
                             produced by ADP for CMA include leave balances. ACTIA manually
                             tracks leave accruals and leave usage. Management Partners
                             strongly recommends that the merged agency maintain an electronic
                             method of managing its leave accrual and usage through the contract
                             payroll system.


                         Compliance Review
                         The following areas are highlighted for attention by the newly merged
                         agency:




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                         •   Fair Labor Standards Act (FLSA). The HR consultant should conduct
                             an audit of all positions to verify the current determinations as to
                             whether each position covered by or exempt from FLSA overtime
                             regulations is legally defensible. There is nothing to indicate that the
                             existing determinations are not accurate and defensible but those
                             determinations have not been reviewed recently and the law is
                             extremely complex. Any errors in this arena result in back pay liability
                             and, potentially in penalties.
                         •   Leaves of absence. Due to the small number of employees, ACTIA is
                             currently not covered by most legislation governing leaves of
                             absence. However, the CMA is covered by these laws and all
                             employees in the merged agency will be covered. Existing written
                             policies and procedures will need to be reviewed and in some cases
                             new ones developed to ensure compliance with the Family and
                             Medical Leave Act (FMLA), the California Family Rights Act (CFRA)
                             and all other existing leave legislation such as those covering
                             pregnancy and care for family members. Managers and supervisors
                             also need to be trained about their responsibility in complying with
                             these laws.
                         •   Accommodations for disabled employees. Written policies and
                             procedures need to be developed to ensure compliance with the
                             Americans with Disabilities Act (ADA) and all managers and
                             supervisors need to be trained on their responsibility in complying with
                             the law in this area.

                         The process changes should be initiated by the HR consultant and
                         approved by the executive director by December 2010. They should be
                         implemented in January 2011. The compliance review could be initiated
                         by the HR consultant as early as April 2010 and completed by July 2010.
                         Any required changes should be implemented by January 2011.

                         Timeframe: Spring-Winter 2010

                         Salaries
                         The salary structures for the two existing agencies are inconsistent.
                         While Management Partners was not tasked with in-depth class and
                         compensation reviews, salary levels for positions with seemingly similar
                         duties are set at different levels. These discrepancies need to be
                         addressed prior to the two agencies merging. These discrepancies may
                         be due, in part, to the fact that the two agencies have used different
                         consulting firms to conduct compensation surveys.

                         With one new HR consultant serving the two agencies and, in the future,
                         the merged agency, this issue should be resolved. Generally, the CMA
                         salaries are higher than the ACTIA salaries. It would not be appropriate
                         to arbitrarily raise salaries to the CMA level, nor to automatically lower
                         salaries to the ACTIA level. Rather, a comprehensive compensation
                         survey needs to be conducted to set all salaries for the new agency
                         relative to the market. The survey should be conducted in three phases.




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                         •   The survey to set compensation levels for the executive director,
                             finance director and agency clerk of the Board should be initiated in
                             February 2010, and completed for the agency clerk and executive
                             director by April 1, 2010. Recommended salary levels for these
                             positions could be completed, reviewed and approved by April 30,
                             2010. The survey to determine the compensation for the finance
                             director may be delayed, depending upon the recruitment process
                             selected for the position.
                         •   The survey for all other positions, excluding senior management
                             positions, could be initiated as early as July 2010 with the collection of
                             data for existing positions that are common in the transportation
                             planning and capital project delivery industry and likely to continue in
                             the consolidated organization, as well as support and administrative
                             staff. Completion of the study should wait until after the new Executive
                             Director is on board and has an opportunity to review the information
                             and organizational structure related to these positions. Final review
                             and approval for these positions could occur in either December 2010
                             or January 2011.
                         •   The survey to set compensation levels for the remaining senior
                             management positions will be dependent on the new Executive
                             Director’s intentions with respect to organizational structure. Some
                             analysis could be initiated in November 2010, while some may be
                             delayed. There may also be a need for some interim compensation
                             analysis and adjustments while the organizational structure is being
                             determined.

                         New salary levels for the merged agency should be implemented effective
                         March 1, 2011.

                         It is possible that the survey will result in changed salary levels for some
                         classifications. The new executive director will need to determine how to
                         address those employees potentially impacted by salary reductions.
                         Options include “y-rating” employees (which provides an opportunity for
                         employees to retain their current salary at a fixed level over time until
                         such time as comparable positions catch up) or offering such employees
                         appointments to the new agency at the lower salary levels. Whatever
                         policy is selected, it should be applied consistently to all employees who
                         may be so affected.

                         Timeframe: Spring-Winter 2010

                         Benefits
                         As with salary levels, there are differences in the benefits offered to
                         employees by the two existing agencies. These differences must be
                         reconciled. For vested benefits such as retirement or retiree health,
                         current employees would retain their current, promised benefits, while
                         future employees will be covered by any new benefit offering. Both
                         agencies already have such tiered plans for retirement and retiree health
                         so this approach will not be novel nor unmanageable. For other benefits,
                         the merged agency may choose to adopt some benefits currently offered



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                         by the CMA and some benefits offered by ACTIA, or may choose to offer
                         different benefits from those currently offered by either agency. The
                         areas in which discrepancies exist in the benefits offered by the existing
                         agency are:
                           • Vacation Accruals. The number of days accrued, the schedule for
                               increasing accruals, maximum accrual limits and options to cash out
                               unused vacation differ between the two agencies.
                           • Management Leave. The CMA automatically credits additional leave
                               to all FLSA-exempt employees on a schedule based on seniority
                               regardless of the number of hours worked in a week by the
                               employee. For ACTIA, granting of such leave is at the discretion of
                               the executive director in the event that a FLSA-exempt works more
                               than 8 hours in a day or more than 40 hours in a week.
                           • Sick Leave. Accrual levels are identical but the maximum accrual
                               level differs and the value of unused sick leave upon retirement
                               varies.
                           • Bereavement Leave. ACCMA grants additional leave for
                               bereavement purposes. ACTIA allows employees to charge up to
                               five days to sick leave for bereavement purposes.
                           • Holidays. The number and designation of paid holidays differs
                               between the two agencies.
                           • Health Benefits. The CMA pays a set amount for health coverage
                               and fully pays premiums for dental, vision, basic life, long-term care
                               and long-term disability coverage. ACTIA utilizes a cafeteria plan
                               with a set contribution per month which employees may apply
                               toward health, dental, vision, life insurance, long-term care and
                               long-term disability coverage. CMA employees who opt out of
                               health coverage are paid an amount equal to 50% of the Kaiser
                               family monthly premium. ACTIA has no individual opt-out benefit
                               but rather places any unused cafeteria plan amounts into a deferred
                               compensation pool which is distributed to all deferred compensation
                               participants.
                           • Pre-Tax Savings Accounts. The CMA offers accounts for dependent
                               care, excess medical expenses and parking. ACTIA offers an
                               account for dependent care.
                           • Transit Subsidy. The CMA provides commuter checks of $188 per
                               month ($120 for commute and $68 for BART parking). ACTIA
                               provides parking or commuter checks for transit up to the cost of
                               parking.
                           • Tuition Assistance. The CMA pays 50% of the tuition fee up to $500
                               while ACTIA pays 90% of the tuition fee with an annual limit of
                               $5,000.
                           • Medical and Dental Reimbursement. The CMA pays up to $982 per
                               year for co-pays and other non-covered expenses. ACTIA’s
                               cafeteria benefit plan offers reimbursement for co-pays up to the
                               total limit for the cafeteria plan.

                         Again, the survey may result in reducing benefit levels and/or increasing
                         employee payments for such benefits. As noted above, for vested
                         benefits such as retirement or retiree health, current employees would



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                         retain their current, promised benefits, while future employees would be
                         covered by any new benefit offerings. Any other benefits that are
                         reduced may be implemented for current employees as a condition of
                         employment or may be phased in as determined by the executive director
                         and the Board.

                         Timeframe: Spring-Fall 2010

                         Human Resource Policies and Procedures
                         Each of the existing agencies has a set of written policies and procedures
                         covering terms and conditions of employment such as equal employment
                         opportunity (EEO), probationary periods, outside employment, overtime,
                         workplace attire, safety, leaves of absence and employee conduct. There
                         are some differences in the agencies’ policies about specific topics and
                         each agency has certain policies that the other agency does not have.

                         The human resources consultant will need to review the current policies
                         and procedures of both agencies and, utilizing best practices, develop a
                         single set of policies/procedures for the merged agency. The review
                         process would likely take about six months. New policies and procedures
                         should be reviewed and approved by the executive director by the end of
                         November 2010 and incorporated into a new HR manual by February
                         2011.

                         Timeframe: Spring-Winter 2010


                         Financial Services
                         For efficient support of a combined organization that also meets the
                         mandates required of the current organizations, a single finance unit must
                         be formed. That unit will operate with consolidated policies and
                         procedures.

                         General Financial Services
                         One of the benefits of the merger is the consolidation of the financial
                         functions of the two agencies into a single organizational unit. The
                         primary change to the agencies will be in placing administrative functions
                         under a single finance and administration director or manager.

                         One of the earliest tasks in the merger process is the recruitment and
                         selection of that person. A recruiter should be selected shortly after a
                         selection process is chosen for the new executive director, should the
                         Board(s) decide to proceed with an open recruitment for that position.
                         Recruitment would proceed in parallel but slightly behind the new
                         executive director.

                         By the time the executive director is selected, the finance and
                         administration director recruitment should have produced a small list of
                         final candidates. If an executive director is selected from outside the



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                         existing agencies, he or she should be willing to attend final interviews of
                         the candidates and select from this pool. That selection may occur even if
                         the new executive director has not officially begun his or her duties.

                         Once the new finance and administration director is on board, he or she
                         can assume responsibility for the final completion of all financial and
                         administrative services tasks. General financial operations will include
                         the consolidation of any financial service policies and procedures,
                         acquiring a single set of banking services, and contracting the
                         consolidation of financial records into a single financial management
                         system.

                         The target date for the cessation of independent operations is set for
                         January 3, 2011. Half of the fiscal year for both agencies will have
                         passed by that time. There is a consensus among the existing financial
                         directors that it would not be practical to restate the financials for half of
                         the year as a combined organization. The finance and administration
                         director will likely prefer to keep the books for ACTIA and CMA separate
                         for the remainder of FY 2011. On July 1, 2011, a single set of books for
                         the new JPA would then begin.

                         Timeframe: Fall 2010

                         Cost Allocation and Budget
                         Fiscal year 2012 (the second year of the full merger) will provide
                         challenges and opportunities with respect to financial planning for the new
                         JPA. Many of these issues will begin to surface regardless of whether the
                         agencies are merged. Inflation and potentially continuing limited sales
                         tax revenues will provide some pressure with respect to ACTIA’s
                         administrative costs cap.        Additionally, during and after the merger,
                         several changes in the agencies’ business environment may become
                         significant issues for financial planning. These include:

                             •   Completion of many of the CMA’s current capital projects with a
                                 reduction in reimbursements, which may require the identification
                                 of new revenue sources or a reorganization of activities.
                             •   Uncertainties regarding the ongoing level of involvement of the
                                 CMA in the administration of the new “HOT lane” and the level of
                                 revenues expected to be derived from the project, which is
                                 currently under review.
                             •   General capital project needs and available funding programs due
                                 to the continuing changing transportation funding environment in
                                 the state.
                             •   The CMA’s leadership role in responding to AB 375 requirements
                                 which require:
                                         Creation of regional targets for greenhouse gas emissions
                                         reductions tied to land use
                                         Regional planning agencies to create a plan to meet those
                                         targets




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                                         Regional transportation funding decisions be consistent
                                         with the new plan
                             •   Reauthorization or an extension of the current half/cent sales tax
                                 measure
                             •   Authorization of a Vehicle Registration Fee for transportation
                                 projects within Alameda County.

                         The consolidation of the agencies will offer opportunities for
                         administrative cost reductions and efficiencies in the form of operating
                         cost reductions described in this report and our previous Threshold
                         Analysis Report. Budget management, however, will be a key challenge
                         of the merged agency not only as it absorbs the missions of the
                         predecessors, but as it embraces the changes described above and
                         others that may emerge over time.

                         Like many government programs, revenues dedicated for one function
                         are prohibited for use in another function. Development of a budget model
                         that provides this protection and is transparent to the Board, oversight
                         committees, and the general public is critical. Also, to allow the merged
                         agency to continue operations, even dedicated funding sources must pay
                         a fair share of the total organizational overhead costs up to the statutory
                         limits of the funding sources. The rates charged by the new agency must
                         include appropriate overhead for all of its activities, which is standard
                         practice among local government for the administration of programs and
                         projects. Without recognizing the legitimate cost to support project and
                         program staff, the existing agencies or the merged organization will find it
                         difficult to function.

                         To address these competing interests, a cost allocation plan must be
                         developed. A cost allocation plan is a method of identifying both the
                         direct costs of providing a service and a portion of the indirect
                         organizational costs that support that service. The total cost of providing a
                         service is expressed as the sum of both direct and indirect costs. The
                         State of California Administrative Manual describes this as follows:

                                 “Cost allocation procedures distribute accumulated indirect costs
                                 to the programs that benefit from the accumulated costs on the
                                 basis of percentages that represent a reasonable and equitable
                                 allocation base.”

                         Direct service costs, such as raw employee labor costs, consulting
                         services provided, and other goods and materials consumed in delivery of
                         a service are generally clear. What is included as a legitimate indirect
                         cost is an opinion of the financial experts or policy makers of the service
                         provider and the funding agency. The opinions are frequently at odds but
                         recognition of the validity of reasonable overhead costs is now assumed
                         by all levels of government.

                         The CMA has been heavily reliant on its cost allocation plan to remain
                         viable for many years as its mission grew from primarily a planning



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                         organization into a significant project delivery organization. In the CMA’s
                         model, different labor rates are defined for work on projects whose
                         funding organizations have different restrictions. ACTIA’s focus on sales
                         tax measure projects and programs have not traditionally required a cost
                         allocation plan. Although with its severe restriction on internal staff
                         spending, it absorbs much of what would be considered overhead
                         through contractual services or consulting organizations. In the current
                         fiscal year, ACTIA has begun a process to fully allocate direct costs to
                         programs and, where applicable, to individual capital projects. Indirect
                         cost overhead rates are under development which will be allocated to
                         programs and projects according to funding agreements. This change
                         brings ACTIA into conformance with state and federal guidelines on cost
                         allocation.

                         The formation of a merged agency will require the creation of a cost
                         allocation plan for the combined agency. For its administrative budget, the
                         merged agency should assume the 4.5% of sales tax revenue
                         (administrative cost limitation from the ACTIA expenditure plan), CMA
                         agency fees, and any ACTA contribution as base revenue. Those
                         revenues are exclusive of project derived revenues. The CMA’s cost
                         allocation model is adaptable to the needs of the combined organization
                         but it will require some changes that apply to all employees. These
                         include:
                                 • A full reimbursement rate calculated and approved for work
                                     performed by any staff on projects allowing full reimbursement.
                                 • A Regional Measure 2 rate will have to be calculated for any
                                     project work under that program.
                                 • Current ACTIA staff or any successors will be subject to the
                                     ACTIA Expenditure Plan requirement where indirect salaries
                                     and benefits cost must be below 1% of “Net Sales Tax
                                     Proceeds”. Staff charges to individual projects will be booked
                                     according to existing project funding agreements.
                                 • Current CMA staff or their successors are allocated to ACTIA
                                     projects under the same rules as currently exist or as modified
                                     by legislative action.

                         Development of the cost allocation plan would logically occur during the
                         development of the 2012 fiscal year budget. During the merged agency’s
                         first year of operation budget and accounting would remain separate.

                         Timeframe: Fall-Winter 2011

                         Accounting
                         The merger of accounting operations will primarily occur at the end of FY
                         2011 for the reasons described previously. Prior to the merger,
                         accounting practices and procedures will be reviewed and common
                         practices developed. Generally, the accounting function should be
                         streamlined just by virtue of having a single organization providing that
                         service. The CMA does a fair amount of work on ACTIA projects. Like any




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                         other grantee, the CMA traditionally has to prepare and submit an invoice
                         with a substantial amount of supporting documentation.

                         The collection and presentation of the supporting documentation requires
                         a significant amount of labor. Although the supporting documentation will
                         still have to be maintained, under a merged organization, it would be
                         available for audit purposes in a single filing system without the need for
                         collection, copying, and secondary review. Obviously, proper controls
                         must be established that will allow the JPA to meet audit requirements,
                         Measure B mandates, and any other Board interests.

                         Timeframe: Fall – Winter 2010

                         Accounts Payable and Receivable
                         The agencies currently process accounts payable and receivable with a
                         combination of internal staff and consulting support. The labor needs are
                         not expected to change dramatically in the short term so continuation of
                         roughly the same practices is expected. Differences in policies and
                         procedures must be reconciled. As capital projects are completed in the
                         early months of the JPA, the labor requirements may lessen allowing a
                         reduction in consultant support unless emerging conditions such as the
                         “HOT lane” operations, AB375 activities, reauthorization of Measure B,
                         authorization of a Vehicle Registration Fee, or other capital funding drive
                         new project development.

                         Timeframe: Summer 2010

                         Purchasing
                         Both CMA and ACTIA are subject to the state public works contracting
                         mandates. In addition, Measure B funds are subject to additional
                         mandates under the measure. A consolidated purchasing program will
                         need to be developed to meet these requirements.

                         Timeframe: Summer 2010

                         Payroll
                         ADP, one of the largest providers of payroll services, does so for both
                         ACTIA and the CMA. A single contract for both organizations is easily
                         obtained. A brief review of current payroll processes by both agencies
                         with respect to time reporting and the processing of payroll does not
                         reflect generally accepted best practices with respect to the processing of
                         payroll at the close of a pay period. Management Partners recommends
                         that the new JPA review time reporting practices to ensure that generally
                         accepted practices are implemented following the merger. The merger
                         may also provide an opportunity to transition to a biweekly payroll, which
                         is significantly easier to manage and provides a much better system and
                         approach to ensure compliance with FLSA and overtime requirements.

                         Timeframe: Summer-Winter 2010




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                         Treasury Management
                         Both ACTIA and the CMA have programs in place to produce some
                         income from capital funds dedicated to projects estimated to be
                         constructed in the future. The investment policies will have to be
                         reconciled and approved by the Boards. Two or three investment
                         management firms should be contracted for this service to spread the
                         risk. Several investment programs should be chosen within each
                         investment firm.

                         Timeframe: Fall 2010

                         Financial Reporting
                         One of the key tools for project and line managers is the availability of
                         accurate financial reports that compare general and project budgets to
                         actual spending, reporting expenditures charged under each account,
                         transaction histories, and other general information. Some financial
                         reporting such as revenue projections can be highly technical, requiring
                         the direct attention of advanced financial staff. However, many financial
                         reports are straightforward and can usually be produced directly by the
                         financial system, even by line staff. In the case of ACTIA and the CMA,
                         the financial systems are not programmed to provide many of the basic
                         financial reports that meet the needs of project and program managers.
                         Much of the duty to provide that information rests with senior accounting
                         staff and even the finance and administration directors themselves.

                         Improved financial reporting has been identified by staff as a need in both
                         ACTIA and the CMA. Management Partners has recommended the
                         addition of a management analyst to provide assistance in contract
                         management and oversight. In addition, this person should have enough
                         labor capacity to produce financial reports and provide other support
                         services that would enable the finance and administration director to
                         provide the financial planning and effective financial oversight for the
                         merged organization.

                         During the consolidation of financial services, the agencies will require
                         some support from the provider of their financial management system.
                         The agencies currently use the same software package, but the data
                         must be combined into a single system at some point. That service is best
                         provided by either the manufacturer of the software or a qualified
                         consultant. While that person (or team) is onsite, any needs for specific
                         financial reports should be identified and contracted for development.

                         Timeframe: Winter 2010


                         General Administration
                         The purpose of this action area is to describe the steps necessary to
                         transition existing administrative and support activities into a unified team



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                         able to support a merged agency. Detail about each area is provided
                         below.

                         Board Support
                         The key activities required to support either a merged Board of Directors
                         or the existing Boards of Directors must be identified and a transition plan
                         must be developed to select a single Clerk of the Board(s) for the new,
                         merged agency.

                         Timeframe: Summer 2010




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                         General Support
                         A redistribution of roles and responsibilities for some general
                         administrative and support staff will likely occur as a result of the merger.
                         A transition plan to support the most effective use of existing support staff
                         of both agencies in the new organization must be developed and
                         implemented.

                         Timeframe: Fall-Winter 2010

                         Legal Services
                         A new scope of legal services to meet the needs of a consolidated
                         agency must be developed.

                         Timeframe: Late Fall 2010

                         Lobbyists
                         A new scope of services and contract(s) which consolidates lobbyist
                         services to support the legislative and policy objectives of the new
                         merged agency must be negotiated and executed.

                         Timeframe: Spring-Summer 2010

                         Contract Management
                         Contract management will need additional support to carry out the
                         function for a merged agency, which may be obtained either through
                         redistribution of duties of existing support staff or may require the addition
                         of a 0.5 FTE. Contracting policies and procedures of the existing
                         agencies will also need to be integrated and consolidated under the
                         existing Contracts Administrator.

                         Timeframe: Spring-Fall 2010

                         Information Technology
                         As with the financial software, email and other general purpose systems
                         for the agencies are the same. The combined organization will still be
                         small enough that there should not a substantial cost to combine the
                         computer systems. The best of the redundant systems can be identified
                         and used as the new home of consolidated services and data. To
                         accomplish this, a network connection has to be established between the
                         two offices and some computer reconfiguration work performed. Such
                         services are best provided by either of the existing information technology
                         support organizations with that organization taking over responsibility for
                         supporting the JPA until the systems are stable and staff time is available
                         to rebid those services.

                         The project management systems are most likely to be the most
                         challenging technology to consolidate. The agencies have similar, but
                         different systems. To avoid disruption of capital projects that are in
                         progress, we do not recommend consolidation initially. As capital



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                         program delivery is merged, a single system should be used for future
                         projects. Data in the old system may or may not be of sufficient value to
                         justify moving into the single system but may appropriately continue on
                         the old software until its end of life.

                         The consolidation of IT systems can begin at any convenient time after
                         approval of the merger of the agencies. The Merger Action Plan indicates
                         a timeframe of spring through summer of 2010 although the work can be
                         completed anytime in that time period depending on the workload of staff
                         and service providers. The transition is expected to require a few weeks
                         of work spread over a two to three month period.

                         Timeframe: Spring-Fall 2010

                         Facilities
                         Following the merger, office space allocations will need to be reviewed to
                         support the consolidated organization and options determined for
                         efficiency and more cost effective use of space. Significant cost savings
                         may not be achievable until existing leases for the space of both agencies
                         expire by March 2014.

                         Timeframe: Spring-Winter 2010


                         Programs and Planning
                         The overarching goal of this action area is to integrate the program
                         management, planning and public outreach activities of the consolidated
                         organization.

                         Public Outreach
                         Much of the work in this area will occur as part of the organizational
                         structure analysis described elsewhere in this report. Public Outreach
                         was identified because the staff of both agencies agreed that there were
                         opportunities for expanding and strengthening the public outreach
                         activities early in the merger process. The CMA, in particular, agreed it
                         would be beneficial to take advantage of ACTIA’s existing skills and
                         programs in the area of public outreach to meet the needs of the CMA in
                         this area. Clearly, a consolidated agency will need to determine priorities
                         for its integrated programs, as well as establish an identity for the new
                         JPA, including a new website. Action Area 5 describes the general steps
                         necessary for implementing these objectives.

                         Timeframe: Spring-Fall 2010

                         Planning
                         Transportation planning is a core mission and legislative mandate of a
                         congestion management agency, in this case the CMA. As a “self-help”
                         sales tax project agency, ACTIA must identify a system of transportation
                         improvements for approval by the County electorate which reflects not
                         only local interests, but also benefits the County in the aggregate based



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                         on an agreed upon Transportation Improvement Plan countywide. These
                         planning efforts need to be well integrated in a merged agency. In a
                         merged agency, the planning function should play a major role in
                         developing data and information in order to reach consensus regarding
                         County-wide transportation improvements and potentially an extension of
                         the current sales tax measure. The CMA’s planning professionals can
                         also leverage the skills and resources available in the public outreach
                         efforts of ACTIA. Such collaboration can help improve the transportation
                         improvement plan’s ability to address regional needs and support the
                         development of a new transportation improvement sales tax measure
                         whose projects better address regional needs as well as emerging
                         mandates under recent climate change legislation.

                         Timeframe: Spring 2011

                         Programs
                         Both ACTIA and the CMA manage transportation programs that
                         encourage the use of public transportation and provide transportation
                         services to underserved populations in the county. A single business
                         model for programs directly administered by the combined agency as well
                         as policies and procedures for programs the agencies currently contract
                         to others will be required. The integration of these business processes is
                         not expected to be controversial or difficult to accomplish.

                         Timeframe: Spring 2011


                         Programming
                         The Programming action area addresses the critically important function
                         of developing and allocating funding (grants, ongoing revenues, and one-
                         time revenues) to transportation improvement projects. The combined
                         agency will have responsibility to ensure the projects are designed,
                         constructed and supported by their member agencies. The management
                         of grants received by the respective organizations or awarded by the
                         organizations is also included in this action area.

                         Programming
                         Both ACTIA and the CMA will carry large and varied funding and revenue
                         sources into the new JPA. It is the nature of transportation improvement
                         projects to require funding from a range of sources and both agencies
                         have been collaborative, creative and resourceful through the years in
                         seeking and combining resources when necessary to get a project
                         underway and constructed.

                         The JPA or merged agency will require that both agencies integrate their
                         programming efforts to ensure they reflect the policies and objectives of
                         the Board(s) and the consensus of the County and member agencies with
                         respect to programs and priorities. As a consolidated agency, differences




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                         in approach and strategy will have to be reconciled, requiring the
                         leadership of the executive director and senior management staff.

                         Competing interests of programs, projects and funding sources will need
                         to surface early and be addressed as the merged agency moves into the
                         development of a new Countywide Transportation Plan, a reauthorization
                         of the half-cent sales tax measure and potentially a voter approved
                         surcharge on vehicle license fees. Even at this early stage in the
                         development of next generation transportation improvements, the staff of
                         both agencies also understand the importance of a strong partnership to
                         address complex climate change mandates and land use in the face of
                         competing local land use interests and scarce resources.

                         Timeframe: Spring 2010-Summer 2011

                         Grant Receipt Management
                         This service area also addresses the need to consider consolidation of
                         grant awards and grant receipts policies, procedures and administration
                         to improve effectiveness and efficiency. To do so will require an analysis
                         of current financial and administrative procedures and staff resources,
                         including the need for the continued use of consultants for this purpose in
                         the future.

                         Timeframe: Winter 2010


                         Capital Projects
                         Capital project delivery includes the responsibilities in both agencies for
                         transportation improvement projects under design or construction. Both
                         agencies employ a typical support service for capital project delivery
                         called a “Projects Control Team.” The Projects Control Teams provide a
                         variety of services including oversight of budget and project progress,
                         process recommendations, technical support, and even acting as adjunct
                         staff where the labor capacity of the organizations themselves are not
                         adequate to keep up with all of the project work required.

                         With many capital projects well underway, Management Partners does
                         not recommend that integration of this function begin until after other
                         administrative and program operations are consolidated. There are some
                         significant differences in project management style, philosophy and
                         strategies. ACTIA has contracted almost all direct project work to their
                         Projects Control Team and other consultants to comply with the
                         administration cost caps required of the agency and general funding
                         philosophy. The CMA has tried to balance the costs and benefits of
                         internal staff for control and oversight with the flexibility of consultants. To
                         accomplish the integration of the capital project delivery function,
                         Management Partners has recommended a three step process. In the
                         first “Pilot” phase, one or two candidate projects can be identified where
                         staff or consultants for one assume full responsibility for the interests of



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                         both agencies. Based on lessons learned, subsequent projects and even
                         responsibilities for existing projects can be assigned during an
                         “Integration” phase.

                         In a consolidated agency, the two project approaches must coexist and
                         eventually be reconciled to some degree. Both compliance with ACTIA
                         administrative costs restrictions and the need to generate revenue to
                         sustain the CMA capital improvement project management staff will have
                         to be considered. In the third project phase, common policies and
                         procedures will be developed.

                         Capital projects will be completed during the course of the merger of the
                         agencies and the workload and work program will require adjustment.
                         Mission changes such as AB375 compliance coupled with the evolution of
                         funding sources will most likely dictate changes in the capital program
                         delivery models. The future of the CMA’s involvement in HOT lane
                         administration will also have an impact on the type and volume of work
                         performed by the project group.

                         Projects currently underway are assigned to staff and consultants who
                         carry significant knowledge of the project history and technical details. To
                         minimize the impact on projects already underway, ACTIA and CMA
                         capital project delivery staff and Management Partners agree that a pilot
                         project should be the first step in integrating project delivery functions. A
                         pilot project should be chosen from the projects slated to begin around
                         the time the pilot will begin. Project delivery managers can assess the
                         interests and processes of each of the current organizations and begin to
                         develop combined protocols.

                         By May 2011, staff should have mutually identified a project for which
                         staff from one of the current agencies is assigned total responsibility. This
                         person will manage the interests of the combined organization. Following
                         the progression of the project for several months, managers can identify
                         issues to be addressed. During the same period, consolidated project
                         management protocols can be developed and the new executive director
                         can provide his or her direction on organizational structure, policies and
                         procedures.

                         Immediately following will be a period of swapping tasks and
                         responsibilities for the remaining active projects and completely
                         integrating project staff into new projects by November 2011. During this
                         latter phase, the organization should shift to a single project control
                         system as described in the Information Technology section above.

                         Timeframe: Calendar year 2011




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                         Future Actions
                         The Future Actions area includes a mix of odd project tasks that must be
                         accomplished well after the complete integration of the organizations.

                         Consolidation of Facilities
                         The office space leases for ACTIA and ACCMA will expire in November
                         2013 and March 2014 respectively. Staff should attempt to renegotiate a
                         lease prior to that time to allow staff to collocate and potentially reduce
                         the rent. The consolidation of the Projects Control Team and other
                         consulting services may allow some reduction in space needs. However,
                         the landlord may be unwilling to negotiate changes at this point. Staff
                         should begin negotiations for consolidated space no later than spring of
                         2012, whether in the current building or at another location that is
                         appropriate to the future staffing needs.

                         Timeframe: Fall-Winter 2013-2014

                         Cash Flow Management
                         The CMA’s funding model requires a source of cash to allow it to pay its
                         project costs and internal costs until project milestones are reached and
                         outlays are reimbursed. The CMA is often waiting for reimbursement of
                         several million dollars in outlays, outstripping its modest budget and cash
                         reserves. The CMA Board has authorized borrowing without interest from
                         the CMA’s Transportation Improvement Program (CMA-TIP) fund to
                         manage the cash flow. However, TIP fund projects are being started and
                         completion of many is expected within the next few years. Reductions in
                         the balance will prevent the continuing use of the TIP fund for this
                         purpose. Another cash management resource must be identified or a line
                         of credit established by roughly February 2012. Staff is well aware of this
                         objective and working to develop recommendations for consideration.

                         Timeframe: Winter 2011-2012

                         Independent Auditor
                         During the transition it will be wise to minimize the number of
                         unnecessary changes to allow staff to accomplish those that are
                         mandatory. In FY 2011, the existing agencies will probably maintain
                         separate financial records and the existing independent auditors can best
                         perform the end of year audits. Their familiarity with each agency will
                         enable them to have a perspective on issues arising from the merger.
                         Once the accounting program is consolidated, a single auditor will be
                         required. In September 2011 one of the existing auditors or a new auditor
                         should be contracted for ongoing audit services.

                         Timeframe: Summer 2011




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                         Merger Timeline
                         Attachment B provides a timeline of significant events and milestones in
                         the merger project. The overlap of these significant tasks is clearly visible.
                         A more detailed version of this is available electronically in Microsoft
                         Project format and will be provided as part of this project. This will allow
                         the merger team to change assumptions and goal dates as the merger
                         progresses and is implemented.




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                ALTERNATIVE FUNCTIONAL ORGANIZATIONAL MODELS

                         Management Partners identified six options for organizing the basic
                         functions of the two agencies. We recognize that there are a number of
                         other combinations that could be developed, depending on the emphasis
                         placed on the various functions and the skills and abilities of the
                         management staff who will lead a consolidated organization. In
                         considering the merger, it is important to have assurance that a workable
                         organizational structure can be fashioned. That is the purpose of this
                         section of the report.

                         Six alternative organizational structures are presented. The six illustrate
                         that the functions carried out by the two agencies can successfully be
                         blended into a unified structure capable of carrying out the policies,
                         programs and projects of a consolidated agency. Structures may vary
                         considerably among similar agencies, depending on the service
                         population, capital projects and whether the agency also operates a
                         transit system.

                         With the exception of Option 1, we believe the alternative models could all
                         function reasonably well, although different objectives are achieved with
                         each model. We do not recommend Option 1, as it does not achieve the
                         efficiencies or the potential for integration of the policy, programming and
                         planning functions envisioned by a merged agency. However, we present
                         this alternative as a point of comparison and for completeness of our
                         analysis.

                         Aside from basic administrative efficiencies, the future executive director
                         will want to consider following objectives when developing an
                         organizational structure:
                             • Strengthen the relationship between policy, legislation and
                                planning to present a unified position before regional, state and
                                federal agencies.
                             • Streamline regulatory compliance and monitoring of grant
                                recipients and pass-through agencies.
                             • Develop a consensus for a countywide transportation model that
                                will serve as the basis and vision for the reauthorization of the
                                half-cent sales tax measure in the next two to five years.
                             • Position the merged agency to be a leader and collaborative
                                partner with local governments in the county with respect to
                                sustainability and climate change planning and regulatory
                                compliance.




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                         Six organizational models are presented below for illustrative purposes.
                             • Option 1: Consolidated administrative services with separate
                                programs and projects
                             • Option 2:        Consolidated administrative services, separate
                                programming, aligned policy and planning and consolidated
                                capital project delivery
                             • Option 3: Consolidated administrative services, integrated capital
                                project and programming, integrated policy and planning
                             • Option 4: Consolidated administrative services; separate
                                programming, planning and policy; and consolidated project
                                delivery
                             • Option 5: Separate human resources, consolidated finance and
                                administration, separate programming, integrated policy and
                                planning, and consolidated capital project delivery
                             • Option 6: Separate finance, consolidated human resources and
                                administration; separate programming, planning and policy; and
                                consolidated capital project delivery

                         Each of the models is described below in more detail.




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                         Option 1
                         Option 1 integrates the finance and administrative functions, but
                         otherwise leaves each agency’s programs and project delivery elements
                         as separately operating entities. This option recognizes the strong
                         interest of not interrupting the current capital project delivery operations of
                         each agency; however, it does not allow for an opportunity to realign
                         transportation planning and community outreach activities in ways that
                         might benefit both agencies and better serve the public interest.

                         FIGURE 1: ADMINISTRATIVE INTEGRATION WITH SEPARATE PROGRAMS AND
                         PROJECTS (OPTION 1)




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                         Option 2
                         With Option 2, as in Option 1, the executive, finance and administration
                         functions are consolidated. Additionally, capital project delivery, now
                         handled separately by the two agencies, would be consolidated into one
                         functional area for purposes of efficiency and effectiveness. Option 2
                         recognizes the importance of programming (funding and pre-development
                         coordination).     It also recognizes the ongoing challenges that
                         continuously require high level attention to sustain success in capturing
                         funding for projects by consolidating those and related areas into one
                         functional section. The option also places policy, planning and public
                         affairs into one functional grouping to recognize the integrated nature of
                         these functions and importance of public outreach and involvement for
                         both agencies.

                         FIGURE 2: CONSOLIDATED ADMINISTRATIVE SERVICES, SEPARATE
                         PROGRAMMING, ALIGNED POLICY AND PLANNING AND CONSOLIDATED
                         CAPITAL PROJECT DELIVERY (OPTION 2)




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                         Option 3
                         With Option 3, finance and administration functions would be
                         consolidated. The remaining programs and projects would be reorganized
                         into two functional areas. A division that combines the programming and
                         capital projects functions into one unit would be created. Policy, planning
                         and public affairs would remain as a separate major function. This option
                         recognizes the critical importance of programming staff and staff in capital
                         project delivery working closely and collaboratively on a regular basis.
                         This division would likely be further divided into major sections as
                         programming and capital project delivery represent significant and major
                         areas of programs and responsibility.

                         FIGURE 3: CONSOLIDATED ADMINISTRATIVE SERVICES, INTEGRATED
                         CAPITAL PROJECT AND PROGRAMMING AND INTEGRATED POLICY AND
                         PLANNING (OPTION 3)


                                           Alameda County Congestion               Alameda County Transportation
                                           Management Agency Board                  Improvement Authority Board




                                   Executive Assistant/
                                  Board Secretary/Clerk           Executive Director                   Legal Counsel
                                      of the Board




                             Programming and Capital              Policy, Planning, and
                                                                                                    Finance and Administration
                                    Projects                          Public Affairs



                            Functions                          Functions                           Functions
                            Capital Project Delivery           Community Outreach                  Accounting
                            Exchange Program                   Legislative Analysis                Accounts Payable/
                            Grant Programs                     Media                                 Receivable
                            Intelligent Transportation         Policy Development                  Benefits
                             Systems                           Programs                            Budget
                            Pre-Project Development            Public Affairs                      Contract Management
                            Programming                        Publications                        Facility Management
                                                               Transportation Planning             Financial Reporting and
                                                                                                     Compliance
                                                                                                   General Administrative
                                                                                                      Support
                                                                                                   Human Resources
                                                                                                   Information Technology
                                                                                                   Payroll




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                         Option 4
                         As with Options 1, 2 and 3, Option 4 consolidates the finance and
                         administrative functions. It is similar to Option 2 which consolidates
                         capital project delivery into one functional area and maintains
                         programming (funding and pre-development coordination) as a key and
                         critical focus of the agency. Option 4 differs from Option 2 by separating
                         out policy and public affairs from planning and having the former function
                         (policy and public affairs) report directly to the executive director. Policy,
                         legislative oversight and public affairs functions often maintain an adjunct
                         and close relationship to the Office of the Executive Director as those
                         areas of responsibility are constantly changing and are of consistent
                         concern to both the executive staff and the policy board. Option 4 also
                         recognizes the expanding role of congestion management agencies in
                         sustainability and climate change initiatives directed at reducing
                         greenhouse emissions through transportation planning.




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                         FIGURE 4: CONSOLIDATED ADMINISTRATIVE SERVICES; SEPARATE
                         PROGRAMMING, PLANNING AND POLICY; AND CONSOLIDATED PROJECT
                         DELIVERY (OPTION 4)




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                         Options 5 and 6
                         Options 5 and 6 are similar to Option 2. In Option 5, the human
                         resources function is designated as an administrative function reporting
                         directly to the executive director, separate from finance and
                         administration. This option recognizes human resources as a distinct
                         administrative function carried out by professional human resources
                         expertise (either in-house, consultants, or a combination). With a direct
                         report to the executive director, additional, needed capacity for employee
                         relations, recruitment and retention, and salary and benefits
                         administration would also become available.

                         Option 6 further separates general administrative functions (facility
                         management, information technology, and general administrative support)
                         from the financial function and combines it with human resources,
                         creating an administration function reporting directly to the executive
                         director. This option results in the finance director operating more as a
                         chief financial officer for the merged agency, without additional general
                         administrative or human resources responsibilities.




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                         FIGURE 5: SEPARATE HUMAN RESOURCES, CONSOLIDATED FINANCE AND
                         ADMINISTRATION, SEPARATE PROGRAMMING, INTEGRATED POLICY AND
                         PLANNING AND CONSOLIDATED CAPITAL PROJECT DELIVERY (OPTION 5)




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                         FIGURE 6: SEPARATE FINANCE; CONSOLIDATED HUMAN RESOURCES AND
                         ADMINISTRATION; SEPARATE PROGRAMMING, PLANNING AND POLICY, AND
                         CONSOLIDATED CAPITAL PROJECT DELIVERY (OPTION 6)




                         The six alternative models illustrate that there are a range of functional
                         organizational models to implement the merger of the staff of the two
                         agencies. Once the executive director is appointed, that individual should
                         submit a plan for staffing the organization within a proposed budget to be
                         approved by the Board(s). The staffing levels will be determined based
                         on organizational structure determined by the executive director to best
                         meet the skills and abilities of the merged staff and the policy interests of
                         the Board.

                         As demonstrated in this analysis, there are is no shortage of viable
                         organizational models which can be used. The Boards can be assured
                         that a suitable organizational structure can be fashioned for a combined
                         agency. The exact arrangement could be any of those described above



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                         or some combination. From an organizational standpoint, there are no
                         fatal flaws associated with developing a combined organization.

                         At this time the most important factor in reaching the goal of merging the
                         agencies is consistent leadership from the Boards and from the executive
                         management team toward this objective. Absent this commitment, it will
                         be difficult to have productive discussions about the best organizational
                         structure for a merged agency.




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                CONCLUSION

                         The July 2009 threshold analysis indicated that a complete merger or
                         integration of the CMA and ACTIA would position a united agency to
                         deliver programs and projects more effectively in the highly competitive
                         and challenging economic environment that now exists. It would also
                         represent a significant step in support of local government’s efforts to
                         streamline business operations in the face of severe resource constraints
                         and complex and expanding policy mandates. While already considered
                         successful in their fields in the State of California, a merged agency would
                         provide a united face to regional, state and federal agencies, and elected
                         officials, allowing even greater influence and efficient operations on behalf
                         of Alameda County.




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ATTACHMENT A – TRANSITION COST AND POST TRANSITION SAVINGS SUMMARY

                                                  Phase 1 Organizational Merger
                                                                                One-Time
   Service Area                           Recommendations                    Transition Cost   Annual Cost Change
                                                        Financial Services
Accounts                        ACTIA contract with CMA for AP
Payable/Accounts                and AR function. CMA to provide                                    0.00 - (50,000.00)
Receivable                      support as needed.
                                ACTIA contract with CMA for
                                accounting services. ACCMA will
Accounting                                                                                                      0.00
                                require additional accounting
                                position to manage the workload.
                                With integration of Finance and
Financial                       Administration functions by ACTIA
Management
                                                                                  110,000.00            (180,787.00)
                                into ACCMA, eliminate 1
                                Finance/Admin Manager position.
                                Allocate .5 FTE of proposed
                                Management Analyst to provide
                                                                                                          55,000.00
                                needed financial analysis capacity
                                to
                                Combine ACTIA under CMA
Purchasing                                                                                                    100.00
                                purchasing card program.

Audit                            No Change                                                                      0.00

                                Combine payroll services into
Payroll                                                                                                   (1,000.00)
                                single contract with ADP




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                                                  Phase 1 Organizational Merger
                                                                                  One-Time
   Service Area                           Recommendations                      Transition Cost   Annual Cost Change

                                                      Organizational Management

                                Eliminate one Executive Director
                                position; existing Deputy Directors
Organizational
Structure
                                and section heads remain pending                   230,000.00             (160,000.00)
                                determination by future Executive
                                Director.

                                Combine project delivery
                                responsibility into a new division.
                                Divisions constructed to preserve
                                the strengths of each current
                                organization.

                                 Combine legal services into
Legal                                                                              120,000.00     (40,000.00-60,000.00)
                                single contract

                                                            Project Delivery

Project Controls                Contract for single Project Controls                                      (200,000.00 -
Team                            Team                                                                      $400,000.00)


Subtotal                                                                           570,000.00             (551,829.00)




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                                                       Phase 2 Space Consolidation
                                                                                One-Time
    Service Area                           Recommendations                   Transition Cost   Annual Cost Change
                                                                Facilities

 Office Space and
 Utilities
                                 Collocate the organizations                      75,000.00            (100,000.00)


                                  Create a new Board room if
 Board Room                                                                       35,000.00
                                 necessary

 Subtotal                                                                       110,000.00            (100,000.00)

Total                                                                           680,000.00            (651,829.00)




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ATTACHMENT B – MERGER TIMELINE




  1   Direction to merge two agencies               1/28/2010    1/28/2010

  2   Develop and approve new JPA legal structure   1/28/2010    2/25/2010


      County, Cities, and Agencies approve JPA
  3                                                 2/26/2010    7/15/2010
      structure
  4   Executive Director Recruitment, if directed    4/1/2010    9/30/2010

  5   Selection of Clerk of the Board                4/1/2010    8/31/2010

  6   Finance Director Recruitment                  4/30/2010    10/29/2010

  7   Financial Services Integration                11/1/2010    10/31/2011

  8   Contract Management Consolidation             11/1/2010    12/30/2010

  9   Lobbyist Contract Consolidation               2/26/2010    5/27/2010

 10   General Administrative Services Integration    9/1/2010    12/31/2010

 11   Legal Services Contract Consolidation         10/1/2010    12/29/2010

    Development of new benefit structure for
 12                                                  4/1/2010    1/28/2011
    merged agency
      Development of new compensation structure
 13                                                  3/2/2010    12/1/2010
      for line employees
 14   New JPA and Board begin operations             9/1/2010     9/1/2010

    Board Secretary/Clerk of the Board
 15                                                 8/31/2010    9/30/2010
    Consolidation
      Boards to adopt any cleanup legislation
 16                                                 10/28/2010   10/28/2010
      following approval process

      New Executive Director of ACCMA and ACTIA
 17                                                 11/1/2010    11/1/2010
      begins

      Separation of Executive Directors of ACCMA
 18                                                 11/1/2010    11/15/2010
      and ACTIA

 19   Transition of employees to new JPA             1/3/2011     3/1/2011


 20
      Cessation of ACCMA and ACTIA as separate       3/2/2011     3/2/2011
      operating entities
      Project Delivery and Capital Project
 21                                                  9/1/2010     5/3/2012
      Management Integration




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ATTACHMENT C – POSSIBLE LEGAL STRUCTURES MEMO


                                           MEMORANDUM

                                           September 14, 2009

TO:         ACTIA/ACCMA Ad Hoc Committee on Merger

FROM:       R. Zachary Wasserman

RE:         Possible Legal Structures for a Merger


         Executive Summary: This memo outlines the potential legal structures which could
accomplish a merger of staff between the Alameda County Transportation Improvement
Authority (“ACTIA”) and the Alameda County Congestion Management Agency (“ACCMA”)
while the Boards of the two Agencies remain separate. There are basically two ways to
accomplish this merger of staff into a single organization. One is for one Agency to contract
with the other for all services, much like ACTA now contracts with ACTIA. The other is to
create a new Joint Powers Agency (“JPA”) between ACTIA and ACCMA which would employ
all staff and provide services to the two Boards (recommended by Management Partners). The
elements of each approach are described below. There is a separate section regarding how
ACTA might be treated under either approach. There is also a brief section on how to
accomplish a full legal merger of the two Agencies now.

         Management Partners’ Recommendation: The Executive Directors of each Agency,
legal counsel and Management Partners met to discuss the alternative approaches to a merger of
the staff and organization. Management Partners recommends that the Ad Hoc Committee
support the formation of a new JPA to accomplish the merger objective and the blending of the
staff from the two agencies into a unified organization. The consultants recommend this
approach because it provides the best opportunity to integrate the staff and operations into a
“third party” organization that would be perceived by the staff of each Agency as fairly neutral,
representing a truly new, merged organization. The benefits of the JPA cited by Management
Partners include:

        •       Reducing the perception that one Agency is being subsumed by the other as both
                would be merged into a new Agency created by the JPA.
        •       Provides a more effective platform to reconcile salary and benefits as well as
                administrative policies and procedures as the new JPA would be a new
                organization.
        •       Greater opportunity to create a unified vision for the integration of staff to support
                both ACCMA and ACTIA programs and projects.
        •       Establishes a Board composition now (of the new JPA) that could serve as a
                model for the integration of the separate policy bodies, should that occur in the
                future.



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        The Contract Approach: Under this approach, one Agency would contract with the
other for services and that Agency would have no employees. Although this could work with
either Agency being the employing Agency, there is some logic for ACCMA being the
employing Agency since it is not a sunset Agency and it has more employees.

        All staff and most, if not all, administrative consultants (including project control teams)
would be employed by one Agency. Except for those positions which would be consolidated or
eliminated, employees of the non-employing Agency would be offered jobs at the other Agency.
In general, the benefits of the employing Agency, with some potential adjustments, would be the
benefits for all employees, but seniority and accrued vacation and sick leave could be credited. If
benefits at the employing agency were going to be reduced without offsetting increases, it would
probably require employee approval. Salary differences among comparable positions would
have to be reviewed and adjustments would be likely. The non-employing Agency would
contract to pay for its share of the services of the staff and consultants employed by the other
Agency, as well as space and related costs of operation. The contract would set out the method
of allocating costs through an agreed upon cost allocation plan. Presumably staff costs would be
allocated on the basis of time slips, administrative contracts would also be allocated on the basis
of time spent on each agency’s projects, and fixed costs (rent, supplies, etc.) would be allocated
on the basis of space used and/or respective budgets.

        The contract could specify what policies of the non-employing Agency would be applied
by staff of the employing Agency in various circumstances, to the extent the Agencies retain
separate policies. Some examples of potential differences are the LBE and SLBE policies
adopted by each Agency, policies regarding sponsor agreements for ACTIA, and deficiency plan
requirements imposed by ACCMA. In some instances the Boards may decide to reconcile these
policies as part of the staff merger process.

         The hiring of the Executive Director, which would be formally done by the “employing”
Agency, could be approved by both Boards. Providing for the possibility of terminating the
Executive Director is a potentially more difficult issue, with one solution being if either Board
voted for termination, the ED would be terminated. As under the current procedure, the
Executive Director would hire, supervise and fire all other employees. Employees could have
titles for both agencies: Executive Director of ACTIA and ACCMA and Director of Finance for
ACTIA and ACCMA, for example.

        A New JPA approach: Under this alternative approach, ACTIA and ACCMA would
enter into a Joint Powers Agreement and establish a separate Joint Powers Agency (“JPA”). The
new JPA would employ staff and contract with each Agency to provide services. The JPA
would effectively act as a vehicle for contracting with staff and would not have a policy role with
respect to ACTIA and ACCMA decisions. Based on Management Partners’ experience, this is a
fairly common approach taken when local agencies wish to band together to obtain services and
share costs. The Joint Powers Agreement would have most of the elements described above for
the contract approach. The ACTIA Board and the ACCMA Board would each still exist and
continue to meet. The new JPA Board would not need to meet on a regular basis.




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        While there are several scenarios for Board membership for the new JPA, one approach
would be to create a Board that would be the same as the Board ultimately envisioned for a full
legal merger of ACTIA and ACCMA. Other approaches would be to have all members of both
Boards be on the new JPA Board (probably too large and unworkable), to have the Chair and
Vice Chair of each Agency constitute the Board (on the assumption that the new JPA would
really only be an employing entity and the directives would continue to come from the separate
Agency Boards), or to appoint a subset of each Board, much like the existing policy committees
established by each Agency.

        There are two distinct advantages for creating a new JPA now. One is that it takes
advantage of the momentum to merge the staff to resolve the issue of what the Board of the fully
merged Agencies would look like. The second is that it provides for a more comprehensive
approach to reconciling benefits, positions and salaries between the two Agencies because the
new JPA could establish its own policies regarding these matters without any requirement to
follow the current structure and benefits of either Agency. All employees of both Agencies,
except those few whose positions are consolidated or eliminated, would be offered employment
by the new JPA, with the specific benefits, salaries and positions determined by the new JPA
Board and the Executive Director of the new JPA. This would allow for greater freedom in
changing the benefit package offered employees, because the new JPA would be a new employer
and would not be bound by any of the benefits offered by the existing Agencies, recognizing that
in order to keep employees the new package cannot be drastically different from existing
benefits.

       Depending upon the make-up of the JPA Board, it could make the decision on hiring the
Executive Director, or the decision could be ratified by the two existing Boards.

        Full Legal Merger. It is possible to enact a full legal merger now. This would require
ACCMA to amend its current Joint Powers Agreement, which would require approval by a
majority of the Board of Supervisors and by a majority of the cities representing a majority of the
population. It would also require ACTIA to amend the Expenditure Plan, which requires
approval by two-thirds of the ACTIA Board following a 45 day notice period to all jurisdictions
within the County. This change to ACTIA’s Board would also require approval by a majority of
the Board of Supervisors (which actually created ACTIA by resolution). If ACTA also desired
to be part of this full legal merger, this would require an amendment to the 1986 Expenditure
Plan, which requires a 45 day review period, including review by MTC, approval by a majority
of the Board of Supervisors and approval by a majority of the cities representing a majority of
the population in the incorporated areas of the County.

      All contracts and all obligations of each Agency would need to be transferred to the new
merged entity. The details of those actions are beyond the scope of this memo.

       ACTA. If the contract approach is taken, then ACTA would simply contract with the
“employing” Agency. If the new JPA approach is taken, then ACTA could either contract with
the new JPA as it does with ACTIA or it could be a member of the new JPA. In order to become
a member of the new JPA for purposes of providing services, a majority of the ACTA Board
would have to approve joining the new JPA (note that this is different from the full merger



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scenario where the ACTA Expenditure Plan would be amended like the ACTIA Expenditure
Plan to essentially eliminate the ACTA Board).




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