F/ETCA Board Approves Construction Contracts for Northbound State Route 241 Channelizers Project

The F/ETCA Board unanimously approved a contract with Peterson-Chase Engineering Services for northbound State Route (SR) 241 channelizers construction and inspection replacement services for $1,043,392. The channelizers will be installed on an approximately one-mile segment on the existing northbound 241 Toll Road and is an interim condition that is anticipated to remain in place until the 241/91 Express Connector Project construction begins.

The channelizers will help improve traffic operations and enhance safety by preventing vehicles from trying to cut in front of the queue that forms in the evening peak hours on the two SR 241 lanes that merge onto the eastbound 
SR 91. 

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F/ETCA Board Authorizes 241/91 Express Connector Contract Amendments

The F/ETCA Board unanimously voted to authorize current contract amendments with WKE, LSA and Michael Baker to fund several beneficial design refinements that will enhance project performance and support avoidance of cost escalation. This work will aide in continuing to advance the project to construction with the goal of being open to traffic in late 2025.

The 241/91 Express Connector Project is a regionally significant median-to-median tolled facility that is included in the Agency’s Capital Improvement Plan (CIP). The project can provide significant travel time savings for all users on SRs 241 and 91.

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Annual Investment Portfolio Review Shows Investment Returns Exceeded Benchmarks for Fiscal Year 2021

The annual investment review, conducted by the Agencies’ investment advisor, Chandler Asset Management, detailed the Agencies’ strong and robust investment portfolios for Fiscal Year 2021 (FY21). Highlights include:

• The Agencies’ combined $1.59 billion portfolio earned $19 million in interest.
• Portfolio returns exceeded assigned benchmarks, despite the challenging economic and financial market environment.
• The stable value of the securities held in the Agencies’ portfolios continues to adhere to the primary tenets of safety, liquidity and return.
• The total market value plus accrued interest of the Foothill/Eastern portfolio is $771,628,976 and the total market value plus accrued interest of the San Joaquin Hills portfolio is $817,789,470.

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Boards Adopt FY22 Internal Audit Plan

The Boards adopted the FY22 internal audit plan, which was developed based on input solicited from the Joint Finance and Investment and Joint Toll Operations Committees.

Some of the activities in the FY22 audit plan include:

• Support external financial statement audit (in progress)
• Independent review of budget allocation percentages
• Member agency development impact fee audits
• Review of Toll Operations contract for road maintenance and customer service
• Audit of selected PCI (payment card industry) controls and support annual PCI assessment
• Customer service system access and security assessment
• Time and materials contracts invoice review

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F/ETCA Board Votes to Amend Oso Bridge Project Cooperative Agreement to Finalize Project Close-Out

The F/ETCA Board unanimously voted to amend the Oso Bridge Project Cooperative Agreement to provide $189,000 in additional funding necessary to facilitate project close-out activities pursuant to construction administration service supplied by the County of Orange.

The Oso Bridge Project opened to traffic on January 13, 2021. During the last eight months, project close-out activities have been advanced, including procurement and installation of additional guard railing, ramp lighting and a crash cushion. Due to the pandemic, the construction contractor encountered delays procuring punch-list related construction materials and completion of the punch-list took longer than anticipated. It is anticipated that all remaining items will be completed during August 2021. After all items are complete, the Caltrans encroachment permit will be finalized and closed.

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Boards Authorize CEO to Submit Formal Responses to June Grand Jury Report

Both Boards authorized the CEO to submit formal responses to the Orange County Grand Jury’s June 21, 2021, report findings and recommendations.

The Grand Jury’s report contains six findings and three recommendations. Highlights of the report acknowledge:

• The Toll Roads are a regional success and provide an essential service
• TCA delivered and operates excellent roads
• Recognized TCA’s toll collection system and process management
• TCA is financially stable and took actions to reduce future interest payments by taking advantage of low interest rates
• TCA used innovative financing to build The Toll Roads
• Development Impact Fees (DIFs) assist with defraying construction costs and are not taxes
• To some extent, South County owes its success to The Toll Roads that were built in the absence of government funding

The Grand Jury’s findings and recommendations are centered around TCA’s CIP, debt management, revenue and cash management, and structure.

TCA’s responses to the Grand Jury’s findings and recommendations include:

• The Grand Jury’s report did not account for the Agencies’ FY22 CIP which identifies timing and funding for TCA’s projects, including the 241/91 Express Connector, SR 73 Catalina View Widening, SR 241 Loma Segment Widening and post-2035 conceptual projects.
• The TCA’s are  already actively taking steps to decrease debt.
  • F/ETCA has saved more than $600 million in recent bond refundings without extending repayment dates.
  • SJHTCA and F/ETCA are reviewing near term opportunities for paying down callable bonds.
• Merging the SJHTCA and F/ETCA would be extremely expensive and would likely extend current bond maturity dates.
• Both Agencies are already in the process of developing plans for their respective financial futures, which focus on debt management and funding the Agencies’ CIP without adding burden to limited state and Measure M resources.

The responses will be finalized and submitted by September 20, 2021, as set forth by the Grand Jury.