MINUTES OF REGULAR BOARD MEETING OF SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY JULY 24, 2014 The Regular Meeting of the Board of the Southeastern Pennsylvania Transportation Authority was held on Thursday, July 24, 2014 at 3:00 PM, in the Board Room of the Authority, with the Chairman in the Chair. Present Attending the meeting were the following Board members: Pasquale T. Deon, Sr., Chairman Thomas E. Babcock, Vice Chairman Beverly Coleman Rina Cutler Thomas Jay Ellis, Esquire Christopher H. Franklin Honorable Stewart J. Greenleaf Kevin L. Johnson, P.E. (via telephone) John I. Kane Daniel J. Kubik Kenneth E. Lawrence, Jr. Honorable Charles H. Martin Honorable Leslie S. Richards James C. Schwartzman, Esquire Cuyler H. Walker, Esquire Present from the staff: Joseph M. Casey, General Manager Jeffrey D. Knueppel, Deputy General Manager Richard G. Burnfield, Chief Financial Officer/Treasurer Gino J. Benedetti, Esquire, Deputy General Counsel Stephen A. Jobs, Controller Carol R. Looby, Secretary Kirn Scott Heinle, AGM, Customer Service Ronald G. Hopkins, AGM, Operations Francis E. Kelly, AGM, Government & Public Affairs Susan Van Buren, AGM, Human Resources Mr. Deon called the Regular Meeting of the Board to order. He said the Special Meeting, which was noticed, was cancelled. Mr. Deon announced that Kevin Johnson would be participating by phone. Mr. Johnson acknowledged his presence. Pledge of Allegiance was observed. Mr. Deon announced that the Board met in Executive Session just prior to the meeting to discuss legal matters. Minutes of Regular Board Meeting July 24, 2014 Mr. Deon stated that if there were speakers who wished to address agenda items they would be called before the Board voted on the i tern and asked that they limit their remarks to three minutes. He said speakers wishing to address i terns not on the agenda would be called after the regular business of the Board was completed. Approval of Minutes Mr. Deon entertained a motion regarding the Minutes of the June 26 Regular and Special Board meetings, which had been circulated. Mr. Ellis moved, Mr. Kubik seconded, and the Minutes were unanimously approved. Financial Report Mr. Burnfield stated that with the end of the fiscal year, his report would focus on year-end results. He reported that as a result of the harsh winter, with ridership declining 3.5 million trips in January and February, ridership and revenue for the year was slightly below budget. He reported that ridership for the year exceeded 330 million, the fifth highest ridership level in 25 years and that regional rail ridership exceeded 36 million trips. Mr. Burnf ield reported that the total operating expenses were below budget, with claims expenses significantly under budget as a result of the Authority's efforts to aggressively defend against fraudulent claims. He reported for the year, the Authority ended with a surplus of $129,000. Mr. Burnfield stated that during Mr. Deon's time as Chairman, the Authority has ended each and every year with a balanced budget. Mr. Deon entertained a motion to adopt the Financial Report. Mr. Ellis moved, Mr. Babcock seconded and it was unanimously adopted. The June Financial Report is received and filed and is attached to these Minutes as Exhibit "A." Mr. Deon then called for speakers wishing to address agenda items. There was no response. Mr. Deon then entertained a motion regarding the cancellation of the August Regular and Special Board meetings. Mr. Kane moved, Ms. Coleman seconded and the following resolution was unanimously adopted. 2 Minutes of Regular Board Meeting July 24, 2014 I . ELECTION NOT TO HOLD A REGULAR MEETING OF THE BOARD IN THE MONTH OF AUGUST 2014 AND CANCELLATION OF THE REGULAR AND SPECIAL MEETINGS OF THE BOARD SCHEDULED FOR AUGUST 28, 2014 "WHEREAS, under Section 3. 02 of the By-Laws the Board by resolution may elect not to hold a regular meeting in the month of July or August; and WHEREAS, the Board desires not to hold a regular meeting in the month of August 2014. NOW, THEREFORE, BE IT RESOLVED, that the Board will not hold a regular meeting in the month of August 2014. FURTHER RESOLVED, that the Board hereby cancels the regular and special meetings that are scheduled to be held on August 28, 2014." Consent Calendar Mr. Deon then presented the Consent Calendar, which consisted of: "Authorization to Renew Purchase of Stop Loss Insurance for Medical and Prescription Drug Benefits with HM Life Insurance Company;" "Adoption of the Five Year Strategic Business Plan for Fiscal Years 2015 to 2019;" "Authorization to Execute Consultant Amendment"; "Acquisition from Swarthmore College of Two Parcels of Property, Temporary Construction Easement and Permanent Access Rights in Connection with the Crum Creek Viaduct Bridge Replacement Project in the Borough of Swarthmore, Delaware County;" "Acquisition from Pennsylvania Department of Transportation of Three Parcels of Property in Connection with the Levittown Intermodal Improvement Project in Bucks County, Pennsylvania;" "Sale of a Parcel of Property to Villanova University and Granting of Perpetual Easements to SEPTA for Use in the Development of a Parking Lot in Radnor Township, Delaware County;" "Lease from Frankford Properties, Inc. of Property Located at 4676 Frankford Avenue, Philadelphia for the Placement of Temporary Stairs During Construction of Improvements at Margaret-Orthodox Station;" 3 Minutes of Regular Board Meeting July 24, 2014 "Finding of Special Opportunity Approving Use of a Request for Proposal for Joint Development of a Facility at the 69th Street Transportation Center in Upper Darby Township, Delaware County;" "Acquisition from Arbors Commercial LP of a Parcel of Property with Improvements to be Used as a Parking Lot at Colmar Station in Hatfield Township, in Montgomery County;" "Reimbursement Agreement Between SEPTA and the City of Philadelphia Relating to the Reconstruction of the Willow Grove Avenue Bridge Over the Chestnut Hill West Line;" "Reimbursement Agreement Between SEPTA and the Borough of Ambler Relating to Various Streetscape Improvements in the Vicinity of Ambler Passenger Station;" "Authorization to Enter into an Agreement with Amtrak for the Design and Construction of ADA Improvements at Paoli Passenger Station;" "Authorization to Award Contracts for Various Procurements;" "Award of Various Contracts for Sole Source Procurements;" and "Authorization to Execute a Change Order and an Amendment." Mr. Deon stated that all of the items on the Consent Calendar were reviewed by the appropriate Board Committees in public session. Mr. Deon entertained a motion to adopt the resolutions. Mr. Ellis moved, Ms. Coleman seconded and the following resolutions were unanimously adopted with Mr. Kubik abstaining on Item III.B.8 .. II.A. AUTHORIZATION TO RENEW PURCHASE OF STOP LOSS INSURANCE FOR MEDICAL AND PRESCRIPTION DRUG BENEFITS WITH HM LIFE INSURANCE COMPANY "WHEREAS, effective August 1, 2012 SEPTA entered into a self-insured formal arrangement with Independence Blue Cross (" IBC") for medical coverage covering approximately 9,400 employees and retirees; and WHEREAS, in order to provide budgeting protection from large dollar value claims, on July 25, 2013 the Board authorized SEPTA to renew the purchase of "Stop Loss Insurance" from HM Life Insurance Company (formerly Highmark Insurance Company) ("HM"), 4 Minutes of Regular Board Meeting July 24, 2014 which included a "Specific Deductible" of $500,000 or higher per person; and WHEREAS, the Stop Loss Insurance coverage was for a one-year period expiring on July 31, 2014, at an estimated premium of $1,951,440; and WHEREAS, SEPTA' s broker (Innovative Risk Solutions, Inc.) solicited proposals for renewal of Stop Loss Insurance from 19 carriers in the marketplace, with only HM and Sun Life of Canada submitting quotations; and WHEREAS, of the quotations received, HM provided the best rate to SEPTA for a $500,000 Specific Deductible Policy at a cost of $18 .17 per employee per month for an estimated amount of $2, 025, 156 (covering an estimated 9, 288 employees), with actual numbers depending on the number of monthly covered employees; and WHEREAS, the claim reimbursement will change as IBC is now switching SEPTA's medical claims to the HM claims platform, whereby SEPTA will now fund only up to the $500, 000 specific deductible, with HM paying the excess to the provider for the remainder of the year; and WHEREAS, IBC and HM are integrated companies, thereby affording to SEPTA numerous benefits, including the avoidance of having to pay stop loss coordination fees to IBC of $2 per month per employee; and WHEREAS, with the concurrence of the Stop Loss Committee of the Board, staff requested the General Manager recommend that the Board authorize SEPTA to purchase Stop Loss Insurance from HM under the terms that are set forth in the pertinent staff summary; and WHEREAS, the General Manager made the recommendation to the Board. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to purchase Stop Loss Insurance coverage from HM Life Insurance Company, with a $500,000 Specific Deductible, under the terms that are set forth above and more fully described in the pertinent staff summary. FURTHER RESOLVED, that the coverage will cover both medical and prescription drug claims incurred over the one-year period of August 1, 2014 through July 31, 2015 at an estimated annual premium of $2,025,156. FURTHER RESOLVED, that the Board hereby authorizes the proper officers of SEPTA to execute all documents, in form approved