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NORTH COUNTY <br /> TRANSIT DISTRICT - <br /> MEMO Date: May 20, 2015 <br /> To: NCTD Board of Directors Q�f� <br /> 810 Mission Avenue From: Matthew O. Tucker, Executive Director216Z ( O <br /> Oceanside,(A 92054 <br /> CC: Lori A. Winfree, General Counsel <br /> Karen Tucholski, Chief Administrative Officer <br /> Ryan Bailey, Chief Financial Officer <br /> Bridget Hennessey, Intergovernmental Affairs Officer <br /> Re: Federal Transit Administration 2015 Triennial Review Supplemental <br /> Summary <br /> As you are aware, the North County Transit District (NCTD) recently completed the 2015 <br /> Federal Transit Administration (FTA) Triennial Review conducted by Milligan & Co, LLC <br /> (Milligan). NCTD has received a Summary of Findings which identifies that 14 of the 17 <br /> areas reviewed by the FTA were deemed "non-deficient," meaning that those 14 areas <br /> were found to be in full compliance with applicable regulations, and highlighting corrective <br /> actions required in three areas: Technical Capacity, Procurement, and Satisfactory <br /> Continuing Control. The purpose of this memo is to address the noted deficiencies and <br /> related corrective actions identified by the FTA. <br /> TECHNICAL CAPACITY: <br /> In general, the findings in this area reflect: <br /> • NCTD's business approach has always been to maximize the use of federal <br /> funding by attempting to exhaust all federal funds of a grant even when the <br /> primary project has been completed or purchased and savings are generated. For <br /> example, NCTD received a grant to purchase buses and that procurement activity <br /> represented the primary purpose of the grant. There was a small balance <br /> remaining from the purchase, and NCTD chose to not close out the grant and <br /> return the federal funding, but instead looked to use the funds to support small <br /> project needs to include the purchase of parts. Prior to privatizing BREEZE bus <br /> service, NCTD would engage in more of these types of activities. Now, the cost <br /> for the purchase of parts and smaller activities are already included in the base <br /> cost per mile payment made to the contractor. <br /> • NCTD had insufficient federal funding to complete the Solana Beach Parking <br /> Project and the San Onofre Bridge Replacement Project and was working to fully <br /> fund the projects over a number of years and/or seek grants. The lack of funding <br /> resulted in lags in project completion/grant activity/untimely grant close-outs. <br /> • As required under SB 1703, NCTD transferred project implementation/engineering <br /> for major projects to SANDAG. As a result, all project management/engineering <br /> was eliminated from the District as of 2008. Since that time, NCTD has re- <br /> established project management (Development Services Division and Planning <br />