FINANCE COMMITTEE MEETING

Notes of January 10,2008

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Louise P. Hoblitzell - Chair Isaac Marks Carolyn Peoples Peter J, Basso Beverley Swaim-Staley Ronald L. Freeland Alison Williams Allen Garrnan Joyce Diepold Jay Ayd Geoff Kol berg Chris Thompson Deborah Donohue Gary Betzing Marcus Brown Dan McMullen David Chapin Dennis Simpson Peter Kessenich - PFM Jamie Traudt - Davenport & Co., Inc. Paul Shelton - McICennon Shelton & Henn LLP Ed Hanis - Counsel to the State Highway Administration (by phone)

Member Hoblitzell called the meeting to order at 9:30 am. No revisions were made to the notes of December 13,2007,

Police Incentive Program

Chief Brown brought before the committee a police incentive program. A total of seven incentive programs have been proposed. There will be no fiscal impact to the FY 2008 operating budget but there will be an increase in FY 2009 and will be included in the FY 2009 budget request when presented in May 2008.

ACTION: Member Peoples recommended approval of the program to the fun Authority, with Member Basso seconding.

Consultant Technical Services

Jay Ayd presented this task order (which is part of CATS contract) for recommendation for approval to maintain, enhance and upgrade Solomon (financial software system). Proposals were evaluated by an evaluation committee which recommends award to Nortel Government Solutions. Funds are available in the operating

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ACTION: Member Marlcs recommended approval of the task order to the full Authority, with Member Basso seconding.

ICC Cash Flow - Update

David Chapin presented the ICC Cash flow and stated that no changes have been made to the overall cost, and that the contracts are on track. Ed Harris described the appeal of the Sierra Club/Environmental Defense action to the U.S. Court of Appeals for Circuit. No scheduling order has been issued. the 4th
Series 2008 Revenue Bonds

David Chapin, Jamie Traudt and Peter Kessenich discussed the upcoming bond sale to be held in March 2008. The committee reviewed a preliminary term sheet and schedule. The amount of the bond sale will not exceed $765 million. Presented for recommendation for approval was Resolution 08-02 reclassifying the ICC as a Toll Facilities Project under the Trust Agreement.

Members Marks recommended approval of Resolution 08-02 to the full ACTION: Authority, with Member Basso seconding.
Presented next for recommendation for approval was Resolution 08-01 ratifying the declaration of the official intent of the Authority to reimburse expenditures to be incurred with respect to certain project from certain funds with the proceeds of taxexempt debt obligations.

Member Marks recommended approval of Resolution 08-01 to the full ACTION; Authority, with Member Basso seconding.
Resolution 08-03 was presented for recommendation for approval for the purpose of financing the acquisition, construction and equipping of certain transportation facilities, and to begin to prepare the transactional documents.

Member Marks recommended approval of Resolution 08-03 to tho full ACTION: Authority, with Member Basso seconding.
Finance Committee Notes January 10,2008 Page 2

Status of FY 2008 Budget by Divisions

Chris Thompson presented the operating budget by divisions for the month ending December 2007. Member Basso questioned as to why there seems to be a pattern of under-spending and would like a report showing the positive and negative variances of actual vs. budget. Chris also explained that pension costs may overrun in some areas because civilian pension was budgeted at 6.85% of salaries. We are being charged the new actuarial estimated rate of 8.86% set by the Department of Budget and Management.

FOLLOW-UP ITEM: regularly.

Reporting of variances in actual vs. budget to be submitted

The meeting adjourned at 11:15 a.m. The next scheduled meeting is February 14, 2008 at 9;30 a.m.

Finance Cornmittee Notes January 10,2008 Page 3

Mary 1an.d Tran po gati.0.n r Anth.orit y

FINANCE COMMITTEE MEETING
Notes of January 15,2008
Azrtho* Members: Louise P. Hoblitzell - Chnir, Richard C..MikeLewin A hse~tt: Jack Basso, Isaac M R F ~ S MdTA Afterr{less: Deborah Sharpless, David Chapin, Vdei.ie Smith,,Ali&on Williams, Christina Thompson, Joyce Die.polc1, Allen Gaiman, Sinela Tdandos, William O'Reilly, Geoffrey I(olberg, T l ~ o m ~ s , Cindy Taylor Gugel

Oktts'rs: Beverley Swaim-Staley - MDQT (viaphone)

Me~nyber FIoblitzelI cal'kd the meetingto order at 9 a m . No revisions were made
to the notes of Dece~nber Z1,200:8,

F.in~nce Conr~nittee Notes January 15,2003 Page 1 of 3

Deb Shaipless explained that revenue for the month of Docember declined $307,000 or -1.4% compared to Decen~ber, 2007 and $7.3 million 01- -5% behind fiscal year to date. Tom Gugel stated that monthly transactions are up 150,000 or 1.6% and d m 2,20 1,Q00 fiscal year to date. Memhe~~ tzell commenclcd Deb, Tom nnd s tnff for providing revcnu-esand Aobli transactions to get he^. for cpmpwison porposes.
Cash.Balances ahd Spending Deb Shaspless stated tltat capital spending for tha month of December was $89.3 mill i n cornpaved to projacted $95.2 n~illion.Due to the GARVEE boric1 proceeds, there o wad a $336.8 milllon increase in the visb hdauces. Based 0 1capital expenditt~~e 1 projectians, bond proceeds consistir1.gof thc Series 2008 GARVEEs and Series 2008 Revenue Bonds should support expenditures through July 2009.

Follorv up: Committee recommended that cash balances ahould compare to current nmnth actual spcnding to projectad spending and year to date actual spending vs projectecl,

Deb Sllmpless presented estimated rate ccovannilt charts f o FY 2009 based on ~ actual revenues through December. Sinca toll revenues me down nlraost 596, for calculatiitionpurposes it is expected to hold througliout the fiscal year. F r FY 2010 o through 2016, lnte covenant estimates presented weTe based on the Pro Fo~nln 2008-69 woclel which incorporates the latest projectio~ls inchding cnhmced~eve~~ues tlll-ough he cost recovery prngranl, Ii~corporating c o s recovcly program causes n cushion to the ~ grow significantly in FY 20 10 and 2011 even with flat to modest increases in traffic volume,

Cum~~i~tecrecomn~endec~tl~-nttheRnteCwenanti~~fu~atiancoi~tii~ueto

be reported monthly incorporating the cost recovery program, Pro Forms 2008-69.

Invwtment Report
Allen Gn~men exp'lained that due to the GARWE bond issue, investment holdings increased $376 million in December and as reported earlier spending from the capi-tlalaccounts totaled $89.3 millio~~.. Qeneral and Operating Rcserve accounts are The invested primarily in government agencies; .As of November30,200S all inveshnents and portfolios were inl'ine with investment policy I imi tntioirs.
Fullp : Committee recommended cuthuing7Fornlntt~nd bold any unusual or significant items.

Finance Camnit tee No tea h u a y 15,20Q9

Page 2 of 3

FinanciaIReport-It was recommended thntrepostinginfoimtion bemore current if possible, i.e. wvcnuc, clisbur~emmts outstanding deb-tshould be and only one month in meus since this information is included hl otller sections.
Budget vs. Actual It was idecoinmcndedthat this information be presented

q~~artcrl y,
At. this time discussion followed or1 the Cost Recovery Initiative. The meeting adjourned at 10:30 followed by tl~e Audit Committee. The nextmmnce Committee meeting is scheduled for Thursday, February 1.2,2009 at 9 om.

Finrmm C Q I ttee Notes ~I~~ Januwy 15,2009 Pilge 3 of 3

FINANCE COMMITTEE MEETING

Notes of February 14,2008
Attendees: Louise P. Hoblitzell, Chair Carolyn Peoples Jack Basso Isaac Marks Beverley Swaim-Staley ( i phone) va Ronald L,Freeland Curtis Esposito Joyce Diepold John Magness - Canton Railroad Marcus Brown Danielle Bradshaw-Lee Paul Shelton - McKennon Shelton & Henn U P David Greene Allen Garman Geoff Icolberg Alison Williams Chris Thompson Sam Triandos Joe Mason - Davenport & Co., Inc. David Chapin Peter Kessenich - PFM Karen Belinko - Real Property Consultants Gloria Dolan Deborah Donohue Cindy Taylor

Member Hoblitzell called the meeting to order at 9:30 am. No revisions were made to the notes of January 10,2008.

ACTION: The general consensus of the Finance Committee WQS recommend approval of the proposal to the full Authority.
Canton Railroad Assets Appraisal
David Greene and John Magness presented an update of the valuation of the Canton Railroad assets. An appraisal was conducted by Real Property Consultants and was composed of three separate binders. The report totals the asset value at over $20 million, based on an over-the-fence appraisal. John stated that he is working on a strategic plan and will review again with the full Authority.
Selection Panel for Independent Auditor

Ron Preeland asked for members to sit on an evaluation panel to select an independent auditor to begin in FY 2008. The timeline for the RFP is fast-paced and a contract start date is July 1, 2008. Member Marla agreed to serve on the panel.

Series 2008 Toll Revenue Bonds

David Chapin presented draft documents pertaining to the sale of bonds. The issuance amount has been adjusted from $712 million to $685 million. David asked the Committee for approval on the method of sale - retail/competitive or competitive. The documents presented were based on a competitive sale. Alison Williams stated that the sale will take place on March 12 and that a conference call with the Members to approve the best bidder will be needed on that day. March 25 will be the pre-closing with the closing on March 26. D vid stated at once bonds are issued we will definitely have to t" raise the o"

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The general codhnsus o the Finance Committee was granted to f ACTION: recommend a competitive sale to the fill Authority.
Deborah Donohue presented Resolution 08-05 for approval. This resolution would approve the draft documents and bond structure and would delegate authority to the Executive Secretary to finalize and distribute the documents.

Members Peoples recommended approval of Resolution 08-05 to the full ACTION: A uthority, wwith Member Marks seconding.
Ron Freeland asked Peter Kessenich to give the Committee an update on the financial market, Peter stated in a few words, "it's a mess." Discussion followed and Member Hoblitzell asked Peter to send e-mail updates to the Members for the next couple of weeks on the status of the market,

Finance Committee Notes February 14,2008 Page 2

ICC Cash Flow Update

David Chapin gave an overview of the Monthly Budget & Cash Flow Report for the month ending December 31,2007. Nothing was out of the ordinary to report; no changes have been made and everything is on track. There was no update to report on the legal issues.
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Financial Report

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Alison Williams stated that the January 2008 operating budget spending guideline is 50% and that the actual percentage of the budget spent is 44%. The ETL capital percentage spent is 79%; the other CTP spending is 50% and the ICC spending is 74%. Issues with seasonality and contracts (procurement) are causes for cash flow delays. Alison reported that bond insurers FGIC's and Ambac's ratings were recently downgraded. FGIC insured the Series 1992 toll revenue bonds, and Arnbac insured the WMATA parking garage bonds and the BWI parking garage bonds. The appropriate disclosures have been made,

Status of FY 2008 Budget bv Divisions

Chris Thompson presented the operating budget by divisions for the month ending January 31,2008. Currently, 46% of the operating budget has been spent, excluding equipment and 44% has been spent, including equipment. Chris noted though that only 7 months of the payroll has been posted. Variances averaging plus or minus 5% were reported to the Committee. Ron stated that he is holding quarterly budget review meetings and that it looks as though the Authority will be able to hold to the costcontained budget.

I~nvestment Group Report

Member Hoblitzell explained to the Committee that an investment group has been meeting to review issues regarding the Authority's management process, led by Allen Garman, Issues discussed included: communication with the State Treasurer's Office, policy limits and target allocations, money market fund re-investment, custodial agreements, dealer trade allocation, total return performance, outsourcing investment management, and investment policy revisions. Allen proposed that the Trust Agreement be amended so that the maturity limitation for the Operating Account be changed from one year to extend for five years. This change could be made at this point because of the size of the upcoming bond sale.

Member Basso recommended approval o the change to the Trust f ACTION: Agreement to the full Authority, with Mernher Peoples seconding,

Finance Committee Notes February 14,2008 Page 3

The meeting adjourned at 11:10 am. Staff remained for a work session to discuss the toll revenue study.

Finance Comlnittee Notes February 14,2008 Page 4

FINANCE COMMITTEE MEETING

Notes of March 17,2008
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Louise P. Hoblitzell, Chair Jack Basso Isaac Marks Mike Lewin (via phone) Beverley Swaim-Staley (via phone) Ronald L. Freeland Allen Garman Alison Williams Curt Esposito Geoff Kolberg Sam Triandos Randy Brown Joyce Diepold Richard Jarmillo Dennis Simpson Suhair Alkatib David Chapin Chris Thompson Melinda Peters - SHA Betty Conners - SIX4 Jamie Traudt -Davenport & Co. Deborah Donohue Cindy Taylor Member Hoblitzell called the meeting to order at 9:30 a.m. in the Finance Division, 2400 Broening Highway. Member Basso made minor corrections to the notes of February 14,2008.

ICC Cash Flow Report

Melinda Peters reviewed the most recent cash flow chart and noted the reduction in estimated expenditures during Fiscal Year 2008. She indicated that this was due to a lower rate of expenditures by the contractor for Contract A as well as lower expenditures on right-of-way costs. The overall project cost estimates are the same.

Review of Bond Sale

Jamie Traudt explained that the bond sale was very successful, especially considering the volatility of the bond market, and that the issue was uninsured. Five bids were received, Merrill Lynch & Co. as the winning bidder with an interest cost under 5%. Jamie also stated that it would cost approximately $1.1million for the premium for the .-. . - - -- . . . . surety~o..fUnn~-the-debt. serViCeTeSeTV~fUnd.;~-.. . .- . . - . . . .. .- .
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ACTION: Member Basso recommended the acquisition of a surety for the debt service reserve fund in the amount of $1.1 million to the full Authority, with Member Marks seconding.
Review of Rating: Agencies9 Reports Jamie Traudt stated that the rating agency reports for the Authority's toll revenue bonds were favorable. Major concerns were liquidity, operating cost growth outpacing revenue growth, and no transfer of funds to MDOT.

Traffic Volume Report

Randy Brown presented a summary of raw traffic data with graphs and statistics by axles for EY 2007 and FY 2008. According to Stantec, traffic is on track. The national traffic trend is now flat,

POLL0 W-UPITEM,. Member Lewin requested a study of previous trafic volumes during recessionaryperiods.
FOLLOW-UP ITEM: Member Hoblitzell requested that Stantec attend the Finance Cornminee either in April or May.

FOLLOW-UP ITEM: Member Hob1itzell requested that the traffic volume report be provided on a monthly basis.

Toll Rate Adjustment

Ron Freeland stated that Curt Esposito has done work on the toll rate adjustment study and will present to the Committee in April. Long Range Capital Needs Study (''LRCNS")
Dennis Simpson and Richard Jmmillo presented the LRCNS as information. This program has been reduced significantly. Discussion followed as to the inflation factor as to why the Authority uses the standard 3% and not current construction costs. It Finance Committee Notes March 17,2008 Page 2

should be noted that a toll rate adjustment is needed for projects in the current capital program.

Member Hoblitzcll requested a report on the cashJlows for FOLLOW-UP ITEM: all facilities (unfruuledfor FY 2008 - FY 2013 is $1.3 billion).

HQ Facilities Management Contract No. 10431234

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Ron Freeland presented this contract for recommended approval to exercise the first of two, one-year renewal options to Manekin LLC for the management of the Point Breeze facility in a reduced amount of $4,079,746. The scope of work would eliminate the tenant services provisions.

Member Basso recommended approval to thefulZAuthority with ACTION: Member Marks seconding.

FOLLOW-UP ITEM: where staf is located.

Financial Report

Member Hoblitzell requested ufacilities map showing

Alison Williams stated that the budget spending guideline for February was 58%. Expenditures for the month were $105,792,963. Capital disbursements through the month were $341.7 million.

FY 2008 Budget by Divisions

Chris Thompson explained that as of February 2gth,54% of the budget has been spent excluding equipment with a target of 58%. Note that 51% was spent including equipment.
Investment Report

Allen Garman presented the investment summary for the month of February. The market is continuing to deteriorate. Allen explained that he believes the time has come to decide whether the Authority should proceed with the RFP for an investment manager, or leave things as they are. Allen stated that communication lines have opened with SHA, Capital Planning, Treasurer's Office, etc. PFM has provided consultation regarding investment decisions. Discussion followed and it was decided to go ahead and put the RFP out for investment management services. Beverley Swaim-Staley concurred with the approach.

Z~OLLOW- ITEM: UP April.

Review of the Investment Policy to be on the agenda for

Finance Committee Notes March 17,2008 Page 3

The meeting adjourned at 11:50 a.m. The next scheduled meeting is April 10, 2008 at 9:30 am,

Finance Committee Notes March 17,2008 Page 4

FINANCE COMMITTEE MEETING

Notes of April 10,2008

Louise P. Hoblitzell, Chair Jack Basso Isaac Marks Mike Lewin Beverley Swaim-Staley Ronald L. Freeland Jamie Traudt - Davenport & Co. (via phone) Peter Kessenich - PFM (via phone) Allen Garrnan Alison Williams Joyce Diepold Chris Thompson Geoff Kolberg Major William O'Rei lly Curt Esposito David Chapin Simela Triandos Jackie Seneschal Louis Luglio - Stantec Deborah Donohue Cindy Taylor

ih Member Hoblitzell called the meeting to order at 9:35 a.m, w t a moment of silence f o r Maintenance Worker at JFK who was killed while performing his duties yesterday, April 9,2008. Mr. Freeland gave an update to the committee on the surviving family and what will be done to help the f a m i l y .
Beverley Swaim-Staley gave an overview of the items passed during the legislative session affecting the Authority. The positive outcome was the transfer of moneys from the General Fund in FY 2009, payment of the balance of the General Fund moneys in three years for the Intercounty Connector, and the increase in the debt limit to increase. No corrections were made to the note: of March 17,2008.

ICC Cash Flow

David Chapin reviewed the most recent cash flow chart and noted that the recent spending reduction allowed the reduction in the bond sale. The overall project cost estimates are the same.

TIETA Loan
David Chapin described the status of the proposed TIFIA loan. The term sheet was approved by FHWA and Ron Freeland in March of 2007. The terms of the secured loan agreement need to be negotiated within the next two months wherein the TIFIA loan rate would be fixed. The main advantage of using a TFIA loan rather than Toll Revenue Bonds is the possibility of a lower interest rate, but this cannot be guaranteed.

Draft Underwriters RFP

Alison Williams explained that the previous underwriter contract expired on March 15,2008 and presented the first draft of an RFP to have either a 3-year contract with 2 one-year renewal options or a 5-year contract, and to either have a negotiated or competitive sale for the upcoming GARVEE Bond sale. Staff and financial advisors did research on which method would be best, and recommended a competitive sale.

General consensus o the Committee was to procure a contract for three f ACTION: years with 2 one-year options and to go with a competitive sale for the GARVEE Bonds in the first quarter of Fiscal Year 2009.
Committee requested that the RFP be brought back next FOLLOW-UP ITEM: month without the focus on the GARVEE Bonds.

Toll Rate Adjustment Studv

Curt Esposito gave an update on the toll rate adjustments work group. The Authority's main toll income is from the Central Region. Notice of enhancement initiatives ahead of time would help the commercial vehicles incorporate the increases into new rates.

Traffic & Revenue Update

Louis Luglio 01 Stantec gave a Powerpoint presentation on traffic trends, Nationally, traffic was down in December 2007. The growth curve has been relatively flat since 2004. During the recession periods of 1989 - 91 and 2001, traffic declined. If current trends follow a similar pattern, traffic would not be expected to return to projected levels until 2014. Year-to-date growth in total traffic is 1.08%. Due to the costs of diesel fuel, 5-axle truck traffic has declined. Member Hoblitzell emphasized the

Finance Committee Notes April 10,2008 Page 2

need to consider all options in responding to decreases in traffic levels and revenues, including cutting back pn the operating and capital budgets, increasing tolls, and reviewing ratings policies.

FOLLOW- UP ITEM:

Committee requested to track traffic month to month.

Financial Auditor Evaluation Joyce Diepold requested approval from the Committee to recommend the award of the Financial Audit Services contract to Clifton Gunderson LLP. Joyce, Greg Brown, Chris Egner, Chris Thompson and Member Marks served on the evaluation panel.
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Member Basso recommended approval to the full Authority, with Member Marks seconding.
Review of Investment Policy

Allen Garman presented the investment policy and recommended minor revisions. Discussion followed regarding some of the changes and Member Marlts suggested that il the Authority use the State Treasurer's policy as a "guide." Allen wl review the recommended changes with Deb Donohue and Fred Rappe.

FOLLOW U P Member Hoblitzell requested that the policy be brought back before the Committee in May,with recommended changes.
Investment Report
Allen stated that the economy may already be in recession. As of March 3 1, 2008, the market value of Authority Trust Funds and ICC-related accounts was $1.18 billion, a $494 million increase due to the $573 million toll revenue bond issuance in March.

The meeting adjourned at 11:45 a.m., in order for the Committee members to meet without staff. The next meeting is scheduled for Thursday, May 8,2008 at 9:30 a.m. in Suite 160 at the 2310 Point Breeze complex.

Finance Committee Notes April 10,2008 Page 3

FINANCE COMMITTEE MEETING

Notes of May 8,2008
Attendees:

Louise P. Hoblitzell, Chair Isaac Marks Mike Lewin Ronald L. Freeland Allen Garman Jay Ellis Jay A yd Chris Thompson Sam Triandos Doug Hutcheson David Chapin Jamie Traudt, Davenport & Co, Peter Kessenich (via phone), Public Pinancia1 Management Major O'Reilly David Greene Greg Brown Sharon Piesinger Joyce Diepold Kurt Krauss, PB Alison Williams Suhair Alkhatib Paul Shelton, McKennon Shelton & Henn, U P Deborah Donohue Cindy Taylor
Member Hoblitzell called the meeting to order at 9:30 am. A minor clarification was made to the notes of April 10,2008.

Next Gen Cutover Jay Ayd and Jay Ellis explained that in April, the last of the major systems conversions (major database that supports E-Z Pass@) was completed. Mr. Ellis gave a brief overview of the major elements. Primarily, the system that was replaced was 10
Finance Committee Notes May 8,2008 Page 1

years old and now gives the Authority access to the ACS database and will also support Open Road Tolling. Discussion followed on the open road tolling as to where/when it will be implemented. Member Hoblitzell requested that the committee be kept apprised of the situation,

FOLLOW UP ITEM.. Committee requestedfull presentation on Open Road Tolling in June and also to the full Authori* to include details and schedules.
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Major Project Capital Cost Estimate Update (Executive Summarv) Ron Freeland explained that the Authority has three major construction projects Hatem Bridge redecking and underway, i.e., Section 100 of the Express Toll ~ a n e s ' ~ , Chesapeake Bay Bridge deck replacement for a total of $174 million. For the past three months, Gayle Seward and Kurt Krauss have been taking a look at what the Authority's financial status is on these projects. Most likely, the projects will be over budget. Ron stated that the Authority has gone through an extensive process of setting up a system that is being used to monitor projects, which is basically like the system Kurt set up for the ICC. Staff is currently looking for ways to offset these increases by either deleting, deferring or slowing down some projects. The Capital Committee was fully briefed on these issues.

FOLLOW UP ITEM:

Commitfee requestedfull presentation for June meeting.

Potential Impact of Recession on Revenues

David Chapin summarized that this agenda items and the following one are a progression of analysis that takes into consideration the costs on the 3 major construction projects and incorporates it into the draft FY 2009 - FY 2014 Capital Program. David explained that Stantec did an analysis on the impact of a recession on revenues that shows a very modest decline in projected revenues over the next 6 years, with an annual compounded rate of growth of 1.2. A worse case scenario analysis was completed on a 0.5% growth rate which shows $53 million less in revenues. These worse case assumptions were the basis for the following agenda items.

David Chapin handed out a summary of analysis wherein there would be no f system-wide toll increase until F T 2012. The summary is based on additional revenue o $10 million in Fr'2009, $20 million in FY 2010 and $30 million in FY 201 1, based on revenue enhancements that would not amount to rate increases. Discussion followed on which year it would be appropriate to have a system-wide toll increase.

POLL0 W UP ITEM: Committee requested a presentation on the draft FY 2009 2014 CTP and fiaancial forecast.
Finance Committee Notes May 8,2008 Page 2

FOLLOW UP ITEM: Committee requested a presentation on, and recommendations concerning, revenue enhancements in June. Committee requested an Updated Report in June assuming FOLLOW UP ITEM: a September I toll increase using a 0.5%growth rate.

Deb Donohue advised that following the last eouple of meetings regarding an investment manager that she did research. The Maryland State Retirement Agency does have external managers to invest their money wherein it is specifically authorized by statute. According to the Authority's Trust Agreement and a Resolution passed in 1985, the Director and Deputy Director of Finance direct the investments of money held by the depository. Paul Shelton also advised that the Authority could not give its money to the State Treasurer's Office to manage or to a third party. A third party could assist in providing some direction. Allen Garman explained that he does work with PFM, Barbara Fava. Paul advised that he amended the draft RFP document to reflect slightly different services such as to advise not to execute the trades.

FOLLOW UP ITEM: for review.

Member Hoblitzell requested that RFP be forwarded to her

At 11 :15 a.m., Member Hoblitzell left the meeting and Member Marks assumed the Chair.

Ron Freeland explained to the Committee that the Chief Financial Officer
position vacancy will be readvertised.

FY 2009 Final Operating Budget

This item was deferred until the June 12" meeting but Chris Thompson gave a few highlights. The FY 2009 operating budget has an increase of $8 million or 3.9% over the amended budget, the smallest percentage increase in years. Also, budget review meetings are being held quarterly with Division Directors.

Traffic & Revenue Update

Ron stated that a report came in late yesterday afternoon and gave a brief summary. Basically traffic has declined in the two-axle vehicles especially at the JFK which could be related to customers adjusting their driving habits because of the price of fuel,

Finance Committee Notes May 8,2008 Page 3

Draft FY 2009 - FY 2014 CTP Update

Sam Triandos explained that the draft FY 2009 - 2014 CTP will be brought before the Capita1 Committee in June and gave a summary of how the program is ~ developed. The Draft FY 2009 - PY 20 14 CTP will be presented at the June 1 2 Finance Committee meeting. Basically there is a $101,864,000 increase.
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FOLLOW UP ;PTEM: . deJnite number.

Committee -requested10bring-itzm back,k& June with a

Investment Considerations/Investment Report

Allen Garman stated that, because of the timing of the monthly investment reporting, this report will now be one month in arrears to more accurately reflect investment earnings. Total holdings dropped by about $24 million which was due to Capital spending in the amount of $34 million offset by investment and operating incomes. Overall, money is going out and we're not losing much.

FOLLOW UP ITEM: Allen will regularly report the spread data on Commercial Paper versus Agencies and Treasuries
Investment Policy Review
Allen explained that he met with Deb Donohue and discussed the Investment Policy with PFM. Some language will be added and the reference to the Annotated Code of Maryland will remain.

FOLLOW UP ITEM: back in June for approval. Other Business

Committee requested that Investment Policy be brought

Financial Report -Alison Williams explained that, because of the timing of the monthly financial reporting closeout, the financial report will be one month behind in order to give the Committee accurate numbers.
Status of FY 2008 Budget bv Divisions - Chris Thompson stated that the FY 2008 budget is in good shape, and that quarterly budget meetings are scheduled for the end of the month. With the aid of the monitoring and tracking enhancements, it appears that expenses should come in under the cost containment budget.

ICC Cash Flow Report - David Chapin explained that the chart shows no substantial change as of the end of March.

Finance Committee Notes May 8,2008 Page 4

The meeting adjourned at 12:lO p.m. The next Finance Committee Meeting is scheduled for Thursday, June 12 at 9:30 a.m.

Finance Committee Notes May 8,2008 Page 5