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May 8, 2009 Special Board/ALUC Meeting

May 8, 2009 Special Board/ALUC Meeting. BOARD MEETING. REPORT FROM CITIZEN COMMITTEE: AIRPORT ADVISORY COMMITTEE: John Hawkins, First Vice-Chair, Advisory Committee. ITEM A: 2009 EMPLOYEE OPINION SURVEY BRIEFING: Presented by Diann Wilson, Director, Training & Organizational Development.

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May 8, 2009 Special Board/ALUC Meeting

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  1. May 8, 2009 Special Board/ALUC Meeting

  2. BOARD MEETING

  3. REPORT FROM CITIZEN COMMITTEE: AIRPORT ADVISORY COMMITTEE: John Hawkins, First Vice-Chair, Advisory Committee

  4. ITEM A:2009 EMPLOYEE OPINION SURVEY BRIEFING:Presented by Diann Wilson, Director, Training & Organizational Development

  5. ITEM #A 2009 Employee Opinion Survey Board Briefing Presented by Allen Analytics May 2009

  6. Presentation Overview Survey Objectives Methodology Survey Design Survey Administration/Response Results Overview Dimension/Item Trends Drivers of Engagement Summary of Observations

  7. Survey Objectives Provide current and valid picture of organization in 2009 Measure change from prior surveys conducted to evaluate impact of key initiatives Identify organizational strengths and opportunities for improving organization effectiveness Monitor any impact from the economic downturn on employee perceptions Gather employee feedback on how to address both short-term and long-term priorities.

  8. Started with 2006 Instrument Reviewed by Executive Team Minor additions and deletions Changes: Deleted Values Dimension Added some items: Executive Team on explaining economy and impact on SDCRAA Recognition Programs (Just Plane Thanks, Spirit of San) Quarterly Performance Reviews Survey Design

  9. Final Instrument 15 Dimension (Topic) Areas 80 Items 3 Demographics Length of Service Job Category Department (used to create divisions) 2 Open-ended questions ONE most important thing we all should do differently in the short-term? ONE most important thing we all should do differently in the long-term? Survey Design

  10. Dimensions (Categories) Measured Work Environment Employee Involvement Communications Customer Focus Performance Management Teamwork Supervision My Department Manager Executive Team Recognition Pay Benefits Career Development and Training Job Content and Satisfaction Organization Image and Commitment

  11. Survey Administration/Response Survey Administered in January 100% Internet Administration managed by SDCRAA Response Rate 270 Surveys Completed (out of 355 Employees) 76% Response Rate (Same as 2006) Good representation by division/department

  12. Results Overview 76% Response rate 76 Items comparable to 2006 Survey 22 Items Increased (29%) 52 Items Remained the Same (68%) 2 Items Decreased (3%) Note: Given the sample sizes differences of +/-9 points are statistically significant and constitutes a meaningful change.

  13. Executive OverviewImprovements Senior Leadership Executive Team perceived to be much more effective than in prior surveys Making changes to operate effectively (up 16 points) Behaving consistently with values (up 12 points) Communications a consistent message about the organization’s direction (up 15 points) Year over year largest increase of all categories measured Department Directors show similar improvements Behaving consistently with values (up 12 points) Explaining reasons behind decisions (up 13 points)

  14. Executive OverviewImprovements Work Environment Increases in the perception that: Employees have the resources they need Amount of work expected to do being reasonable Enough qualified staff to handle the workload Issue in 2006 Teamwork Employees report higher levels of cooperation Across departments Across divisions

  15. Recognition Fewer employees say coworkers take the time to recognize good performance at SDCRAA Slight declines in some programs Employee of the Quarter Employee of the Year Information on job opportunities Executive OverviewDecline

  16. Dimension OverviewSimilar pattern as in 2006 except Executive Team has moved out of bottom 3 dimensions

  17. Dimension OverviewSignificant upward movement in Work Environment, Department Director, and Executive Team

  18. Item IncreasesImprovements in communications, executive team, and work environment

  19. Item IncreasesImproved regarding resources, and improvement in various leadership levels.

  20. Item DecreasesRecognition among coworkers and information on job opportunities only areas of clear decline

  21. Drivers of Engagement Employee Engagement Derived by aggregating all items under Job Content & Satisfaction Job providing personal accomplishment, use of skills, overall job satisfaction Organization Image & Commitment Recommend organization to others, pride in working for SDCRAA All other items in the survey are “potential” drivers

  22. Employee Engagement - Average of all Items in Job Satisfaction and Organization Image/Commitment

  23. Summary Observations SDCRAA continues to show improvements in most areas. Positive comparisons to 2006 suggest opportunity to build on best practices within SDCRAA The survey process creates an important and significant opportunity for leadership visibility, improved communication, and accessibility.

  24. ITEM B:REPORT ON THE AUTHORITY’S FINANCIAL CONDITION:Presented by Vernon Evans, Vice President, Finance/Treasurer

  25. Presentation B San Diego County Regional Airport Authority The Authority’s Financial Update May 8, 2009 Presented by: Vernon D. Evans, CPA, CIA, CMA, CFE, CGFM Vice-President-Finance/Treasurer and CFO

  26. Financial Update Overview Current Financial Events Authority’s Revenues and Expenses Authority’s Investments Authority’s Debt

  27. Current Financial Events

  28. Current Financial Conditions The U.S. unemployment rate increased to 8.5% in March; California’s rate reached 11.2%. The stock market showed positive gains in last 2 months. March and April: Dow up 15.65%; S&P up 19%; Nasdaq up 25% YTD: Dow down 6.93%; S&P down 3.37%; Nasdaq up 8.89% First quarter earnings were weak, but better than expected. U.S. banks had surprisingly strong profits 30 year treasury yields increased ~50bps from a month ago. 30 year mortgage rates down to 4.62% (near all-time low). Chrysler announced it will file for Chapter 11 bankruptcy on April 30th.

  29. Current Financial Conditions April 29th FOMC Meeting No change in rates (currently fed funds at 0-0.25%) Stated there is a modest improvement in economic outlook As of April 28th, the Federal Reserve has purchased 25% of the expected $300 billion total of Treasury securities. Consumer Confidence Index improved once again in April to it highest level in the last 5 months. Deflation concerns again as Consumer Price Index fell 0.1% in March. Advanced Gross Domestic Product decreased 6.1% in the 1st quarter of 2009.

  30. Current Financial Events SDCRAA continues to be impacted by reduced enplanements and revenues

  31. FY08 Actuals FY09 Budget FY09 Reforecast FY09 Actuals 000s FY09 YTD Act vs FY08 YTD Act - 8.79% Mar Act vs Mar Refcst - 1.56% FY09 YTD Act vs FY09 YTD Refcst - 3.23% 31

  32. FY08 Actuals FY09 Budget FY09 Reforecast FY09 Actuals 000s FY09 YTD Act vs FY08 YTD Act - 7.20% Mar Act vs Mar Refcst - 1.53% FY09 YTD Act vs FY09 YTD Refcst - 1.17% 32

  33. FY08 Actuals FY09 Budget FY09 Reforecast FY09 Actuals FY09 YTD Act vs FY08 YTD Act - 11.68% Mar Act vs Mar Refcst -16.32% FY09 YTD Act vs FY09 YTD Refcst -6.13% 33

  34. FY08 Actuals FY09 Budget FY09 Reforecast FY09 Actuals $000s FY09 YTD Act vs FY08 YTD Act - 6.18% Mar Act vs Mar Refcst 8.22% FY09 YTD Act vs FY09 YTD Refcst - 4.47% 34

  35. Revenues and Expenses (Unaudited) For the nine months ended March 31, 2009

  36. Quarterly Operating Revenue(Unaudited) FY 2009

  37. Operating RevenuesFor the Nine MonthsEnded March 31, 2009(Unaudited)

  38. Quarterly Operating Expenses(Unaudited) FY 2009

  39. Operating ExpensesFor the Nine MonthsEnded March 31, 2009(Unaudited)

  40. Financial SummaryFor the Nine Months EndedMarch 31, 2009(Unaudited)

  41. Nonoperating Revenue and (Expenses)For the Nine Months EndedMarch 31, 2009(Unaudited)

  42. Authority’s Investments

  43. Total Portfolio Summary (1) Notes: (1) These values represent estimates and may not agree with actual figures recorded in the Financial Statements (2) Earned income represents accrued interest earnings and amortization.

  44. Investment Strategy November December January February March April Purchase securities to the extent possible due to the expectation of an additional rate cut in December; Move additional funds into LAIF to increase earnings. As the federal funds rate approaches 0%, investment options are limited. Bank CDs and callable agency securities are among the best choices. As securities are maturing or being called, the Authority is keeping the portfolio fully invested. Purchases of callable securities represent good value and safety. Investment choices are focused on an 18-month duration as rates in pooled funds continue to fall. This will lock in a higher yield until Fed funds rate increases in 2010. Kept portfolio fully invested by investing in a certificate of deposit and in one year agency callable securities to provide higher yield and security. Continue to keep cash balances to a minimum by reinvesting maturities into 18-20 month securities that provide diversity and security.

  45. The Reserve Primary Fund On September 16, 2008, the Reserve Primary Fund's Net Asset Value fell to $0.97, reducing the value of the Authority’s share from $12,157,575 to $11,809,250. Primary Fund Distribution Schedule: Initial distribution of $6,175,996.19 was received on October 31, 2008. Second distribution of $3,420,988.55 was received on December 3rd. Third distribution of $807,508.05 was received on February 20, 2009. Fourth distribution of $546,394.47 was received on April 17, 2009. To date, approximately 92% of the Authority’s funds have been collected. A balance of $858,000 remains to be collected when and if any additional distributions are made.

  46. Authority’s Debt

  47. Summary of Outstanding Commercial Paper April 27, 2009

  48. Financing Strategy “Alternative Minimum Tax (AMT) penalty” has been eliminated for a two year period. Adjusting plan of finance to leverage this opportunity. Synchronizing plan of finance with Terminal Development Program and Facilities Development Department cash flow projections for optimal financing timing and options Working closely with FAA for additional grant funding

  49. Build America Bonds (BABs) Part of federal stimulus plan, expiring 12/31/10 Provides a 35% interest rebate to issuers Potentially provides opportunity to issue a portion of Authority debt at lower total cost vs. issuing non-Alternative Minimum Tax (AMT) debt Limitations Non-callable No Amortization (Bullet Issues) Only governmental projects are eligible Finance is analyzing feasibility of utilizing BABs as part of total plan of finance for capital projects and Terminal Development Program

  50. Questions ?

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