MINUTES OF REGULAR BOARD MEETING OF SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY JUNE 23, 2016

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1 MINUTES OF REGULAR BOARD MEETING OF SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY JUNE 23, 2016 The Regular Meeting Pennsylvania Transportation 23, 2016 at 3:02 PM, in the Chairman in the Chair. of the Board of the Southeastern Authority was held on Thursday, June Board Room of the Authority, with the Present Attending the meeting were the following Board members: Pasquale T. Deon, Sr., Chairman Thomas E. Babcock Vice Chairman Beverly Coleman Honorable Stewart J. Greenleaf (via telephone) Kevin L. Johnson, P.E. Daniel J. Kubik Honorable Charles H. Martin Clarena I.W. Tolson Honorable Michael A. Vereb (via telephone) Present from the staff: Jeffrey D. Knueppel, General Manager Richard G. Burnfield, Deputy General Manager/Treasurer Gino J. Benedetti, Esquire, General Counsel Stephen A. Jobs, Controller Carol R. Looby, Secretary Kim Scott Heinle, AGM, Customer Service Ronald G. Hopkins, AGM, Operations Francis E. Kelly, AGM, Government & Public Affairs Robert E. Lund, AGM, Engineering, Maintenance & Construction Susan VanBuren, AGM, Human Resources Mr. Deon called the Regular Meeting of the Board to order. He announced that Senator Greenleaf and Representative Vereb would be participating by telephone and they both acknowledged their presence. Mr. Deon stated that if there were speakers who wished to address agenda items they would be called before the Board voted on the items 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.

2 Minutes of the Regular Board Meeting June 23, 2016 Approval of Minutes Chairman Deon entertained a Motion regarding the Minutes of the May 26th Regular Board Meeting, which had been circulated. Mr. Babcock moved, Mr. Martin seconded, and the Minutes were unanimously approved. Financial Report Mr. Burnfield reported that for the month of May regional rail ridership increased by two percent over the last year. He noted that the increase was off set by a two percent decline in city transit ridership. Mr. Burnfield stated that passenger revenue for the month was 1.2 million below budget. Mr. Burnfield reported that expenses were under budget by 385, 000. He stated that for the month there was a deficit of 962,000 and year-to-date there was an operating budget surplus of 170,000. Chairman Deon entertained a Motion to adopt the Financial Report. Mr. Babcock moved, Mr. Martin seconded and it was unanimously adopted. The May Financial Report is received and filed and is attached to these Minutes as Exhibit "A." Chairman agenda items. Deon then called for speakers There was no response. wishing to address Consent Calendar Chairman Deon consisted of: then presented the Consent Calendar, which "Amendment of the Fiscal Year 2016 Operating Budget and Allocation of Funds to the Service Stabilization Fund"; "Termination of Herndon Capital Management Manager;" as Investment "Renewal of Radio Broadcasting Equipment Floater Insurance and General Liability Insurance with Travelers Insurance Company, Burlington Insurance Company and Scottsdale Insurance Company;" "Renewal of Blanket Railroad Protective Liability Insurance with Arch Insurance Company;" "Award of a Consulting Service Contracts Pursuant to a Request for Proposals;" "Authorization to Execute Consultant Amendments;" 2

3 Minutes of the Regular Board Meeting June 23, 2016 "Reimbursement Agreement Between SEPTA and Doylestown Township Relating to Construction of a Pedestrian Grade Crossing on the Right-of-Way of SEPTA's Lansdale/Doylestown Regional Rail Line in the Vicinity of Lower State Road in Bucks County;" "Memorandum of Agreement By and Between SEPTA and the Brotherhood of Locomotive Engineers and Trainmen - Division 71;" "Agreement with Independence Visitor Center Corporation Related to Philadelphia Phlash Service;" "Grant of Easements from SEPTA to Sunoco Pipeline, L. P. Regarding Four Pipeline Occupancies Along SEPTA' s West Chester Branch and Chester Creek Branch Railroad Right-of-Ways In Conj unction with Sunoco' s Mariner East I I Project in Delaware County;" "Authorization to Sell Surplus NHSL Property and Grant a Temporary Construction Easement to the Pennsylvania Department of Transportation to Facilitate Reconstruction of an Existing Bridge Located in Haverford Township, Delaware County;" "Authorization to Award Contracts for Various Procurements"; "Award of Various Contracts for Sole Source Procurements;" and "Authorization to Execute Change Orders and Amendments." Chairman Deon noted that Item I.A. "Amendment of the Fiscal Year 2016 Operating Budget and Allocation of Funds to the Service Stabilization Fund" and Item III. C.1. "Award of a Consul ting Service Contracts Pursuant to a Request for Proposals" have been revised, and that copies of the revised Resolutions have been provided to the Board. He stated that all of the remaining items on the Consent Calendar were reviewed by the appropriate Board Committees in public session. Chairman Deon then entertained a Motion to adopt the Resolutions. Mr. Johnson moved, Mr. Martin seconded and the following resolutions were unanimously adopted. I.A. AMENDMENT OF THE FISCAL YEAR 2016 OPERATING BUDGET AND ALLOCATION OF FUNDS TO THE SERVICE STABILIZATION FUND "WHEREAS, in July 2007 the Pennsylvania General Assembly approved Act 44 of 2007, creating the Public Transportation Trust Fund, which was intended to provide a stable and growing source of subsidies for public transportation throughout the Commonwealth, as well as a long-term funding solution for Pennsylvania's public transportation agencies; and 3

4 Minutes of the Regular Board Meeting June 23, 2016 WHEREAS, shortly after the enactment of Act 44 of 2007, SEPTA created the Service Stabilization Fund in order to sustain SEPTA' s operations for a longer term and to provide adequate subsidy funds to maintain stable financial resources for future operating budgets; and WHEREAS, SEPTA's enabling act at 74 Pa.C.S. requires the Board to adopt an operating budget prior beginning of each fiscal year; and 1751(a) to the WHEREAS, on May 28, 2015 the Board adopted the operating budget for Fiscal Year 2016; and WHEREAS, during Fiscal Year 2016 the Authority achieved operating budget savings associated with significant reductions in expenses for ( i) claims; (ii) snow removal; and (iii) diesel fuel and propulsion power ; and WHEREAS, the Finance and Planning Di vision has requested that the General Manager recommend that the Board authorize management to allocate approximately 33 million to the Service Stabilization Fund and reduce state and local operating subsidies by approximately 33 million in the Fiscal Year 2016 operating budget, which will enable the funds to be used to subsidize future years operating expenses and budgets; and WHEREAS, Board. the General Manager made the recommendation to the NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to amend its operating budget for Fiscal Year 2016 and to allocate approximately 33 million of state and local subsidies to the Service Stabilization Fund, under the terms that are set forth in the pertinent staff summary. FURTHER RESOLVED, that the Board hereby authorizes the General Manager or his designee to execute all documents, in form approved by the Office of General Counsel, and to do any and all other things as shall be deemed necessary and proper in order to effectuate the purpose of this Resolution." II.A. TERMINATION OF HERNDON CAPITAL MANAGEMENT AS INVESTMENT MANAGER "WHEREAS, on February 24, 2011 the Pension Committee of the Board revised the Statement of Investment Policy and Objectives and Operating Guidelines ("Policy Statement") which governs the investment of the funds of the pension plans of SEPTA; and WHEREAS, the Policy Statement provides investment guidelines and investment return expectations for all investment managers; and 4

5 Minutes of the Regular Board Meeting June 23, 2016 WHEREAS, the Policy Statement contains monitoring procedures for the Pension Committee to utilize in its review of the performance of each investment manager; and WHEREAS, at the Pension Committee Meeting that was held on November 19, 2015, PFM Advisors, SEPTA's Pension Plan Consultant, reviewed the performance of Herndon Capital Management ("Herndon") with the Pension Committee, and the Pension Committee voted to place Herndon on the Watch List pursuant to criteria outlined in the plan's Policy Statement; and WHEREAS, at the March 24, 2016 Pension Committee Meeting, representatives of Herndon were interviewed by the Pension Committee and PFM Advisors and answered questions related to the performance of the fund and other relevant events at the fund; and WHEREAS, at the May 26, 2016 Pension Committee Meeting, PFM Advisors updated the Pension Committee on Herndon' s investment performance relative to its peer group and benchmark index; and WHEREAS, based on the interview and the updated performance measures and discussion, PFM Advisors recommended and the Pension Committee agreed to terminate the investment management contract with Herndon for its large cap value fund. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby approves the termination of SEPTA's investment with Herndon Capital Management, and authorizes the proper officers of SEPTA (i) to execute and deliver all documents that will enable SEPTA to terminate its investment with Herndon (ii) take such action necessary to transfer the assets currently being managed by Herndon to fund other investments as approved by the Pension Committee; and (iii) to do any and all other things that may be necessary in order to effectuate this Resolution." III.A. RENEWAL OF RADIO BROADCASTING EQUIPMENT FLOATER INSURANCE AND GENERAL LIABILITY INSURANCE WITH TRAVELERS INSURANCE COMPANY BURLINGTON INSURANCE COMPANY AND SCOTTSDALE INSURANCE COMPANY "WHEREAS, the insurance policy by which Travelers Insurance Company ("Travelers") insures SEPTA-owned radio broadcasting equipment, transmission towers and land-based communication equipment will expire on June 30, 2016, at an expiring total premium of 50,343; and WHEREAS, the insurance policies by which Burlington Insurance Company ("Burlington") and Scottsdale Insurance Company ("Scottsdale") provide insurance in connection with various agreements under which SEPTA leases space on antenna towers will expire on June 30, 2016, at an expiring combined total premium of 17,637.25; and 5

6 Minutes of the Regular Board Meeting June 23, 2016 WHEREAS, the Risk Management Advisory Committee ( "RMAC") solicited from Travelers, Burlington and Scottsdale flat rate quotations for the same terms and conditions as the expiring programs; and WHEREAS, Travelers offered an annual premium of 50,343 (including a 300 policy fee) for million of coverage for SEPTA-owned radio broadcasting equipment, transmission towers and land-based communication equipment; and WHEREAS, Burlington offered an annual premium of 6,720 (including 210 in administrative fees) for the primary layer of 1 million general liability coverage, and Scottsdale offered an annual premium of 10, (including in administrative fees) for the 4 million in excess liability coverage to meet SEPTA's obligations in various leases for space on towers; and WHEREAS, the RMAC and the staff requested that the General Manager recommend that the Board authorize SEPTA to renew/purchase the insurance policies with Travelers, Burlington and Scottsdale as set forth in the pertinent staff summary; and WHEREAS, Board. the General Manager made the recommendations to the NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to renew/purchase insurance with (i) Travelers Insurance Company for SEPTA-owned radio broadcasting equipment, transmission towers and land-based communication equipment; and (ii) Burlington Insurance Company and Scottsdale Insurance Company for 1 million in general liability coverage and 4 million in excess liability coverage, respectively, for leased space on towers, under the terms that are set forth above and as more fully described in the pertinent staff summary. FURTHER RESOLVED, that the renewal for the coverages will be for a 12-month term that will commence on July 1, 2016 and will have a consolidated annual premium not to exceed 67, FURTHER RESOLVED, that the Board hereby authorizes the proper officers of SEPTA to execute all documents, in form approved by the Office of General Counsel, and to do any and all other things as shall be necessary and proper in order to effectuate the purpose of this Resolution." III.B. RENEWAL OF BLANKET RAILROAD PROTECTIVE LIABILITY INSURANCE WITH ARCH INSURANCE COMPANY "WHEREAS, railroad protective liability ("RRP") insurance insures a railroad against property damage and personal injury claims that arise out of construction that is performed on or within 50 feet of the railroad's right-of-way; and 6

7 Minutes of the Regular Board Meeting June 23, 2016 WHEREAS, when SEPTA performs work, by itself or through contractors, on rights-of-way that National Railroad Passenger Corporation ("Amtrak") and/ or CSX Transportation ("CSXT") owns, SEPTA is contractually required to provide RRP insurance which protects Amtrak and/or CSXT; and WHEREAS, in 2015 SEPTA purchased from Arch Insurance Company ("Arch") three RRP insurance policies, one in which only SEPTA is the named insured, another in which SEPTA and Amtrak are named insureds and another in which SEPTA and CSXT are named insureds; and WHEREAS, the three RRP insurance policies will expire on August 1, 2016 at a combined expiring premium of 395,900; and WHEREAS, the Risk Management Advisory Committee (RMAC) solicited from Arch quotations for the same terms and conditions of the expiring RRP Program; and WHEREAS, the quote by Arch provided policies, as well as guaranteed rates annual premium total of 247,530 for the through August 1, 2017; and for renewal of the three for all limits, at an period of August 1, 2016 WHEREAS, the Risk Management Advisory Committee and staff requested that the General Manager recommend that the Board authorize SEPTA to renew with Arch the RRP insurance under the terms and conditions that are set forth in the pertinent staff summary; and WHEREAS, Board. the General Manager made the recommendation to the NOW, authorizes protective conditions THEREFORE, BE IT RESOLVED, that the Board hereby SEPTA to obtain from Arch Insurance Company railroad liability insurance coverage under the terms and that are set forth in the pertinent staff summary. FURTHER RESOLVED, commencing on August 1, 247,530. that the renewal is for a 12-month term 2016 and the estimated annual premium is FURTHER RESOLVED, that the Board hereby authorizes the proper officers of SEPTA to execute all other documents, in form approved by the Office of General Counsel, and to do any and all other things as shall be necessary and proper in order to effectuate the purpose of this Resolution." 7

8 Minutes of the Regular Board Meeting June 23, 2016 III.C. AWARD OF A CONSULTING SERVICE CONTRACTS PURSUANT TO A REQUEST FOR PROPOSALS "WHEREAS, SEPTA, which has need for the consulting services as described below, has advertised and solicited proposals from firms wishing to propose; and WHEREAS, SEPTA staff has requested that the General Manager recommend that the Board authorize the award of a contract to the firm listed below because said firm was the successful proposer in the areas for which the request for proposals was issued; and WHEREAS, the General Manager recommended that that the Board authorize the award of the contract. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorize to award subject to the following conditions and the General Manager to execute the following contracts, in form approved by the Office of General Counsel, subject to the concurrence of the funding agencies, if required, and contingent upon and subject to the proposers satisfactorily meeting all requirements of the terms and conditions of the relevant request for proposals, including the provision of any insurance certificates and full compliance with any applicable Disadvantaged Business Enterprise (DBE) requirements: 1. To Swell, LLC, for a total contract amount not to exceed 2, 500, 000; and to Harmelin Media, for a total contract amount not to exceed 10,000,000, for the provision of advertising agency of record services broken into the two distinct categories of "Creative Services" and "Media Planning/Buying", respectively, with services to be performed over a period of three years scheduled to commence on July 1, 2016, as described in the staff summary on this subject, Request for Proposals No AHAC - Advertising Agency of Record. 2. To Portfolio Associates, Inc., for the provision of qualitative market research consulting services for SEPTA's Customer Service and Advocacy Department in support of Authority initiatives and requirements, with services to be performed over a period of five years scheduled to commence on July 1, 2016, as described in the staff summary on this subject, for a total contract amount not to exceed 500,000, Request for Proposals No AHAC - Qualitative Market Research Consultant. 3. To Widener-Burrows & Associates, Inc. (WBA Research), for the provision of full market research consul ting services for SEPTA' s Customer Service and Advocacy Department in support of Authority initiatives and requirements, with services to be performed over a period of five years scheduled to commence on July 1, 2016, as described in the staff summary on this subject, for a total contract amount not to exceed 1,000,000, Request for Proposals No HAC - Full Market Research Consultant. 8

9 Minutes of the Regular Board Meeting June 23, To LTK Consulting Services, Inc., for a total contract amount not to exceed 2, 500, 000; to STV Incorporated, for a total contract amount not to exceed 2,500,000; and to SNC Lavalin Rail & Transit, Inc., for a total contract amount not to exceed 2,500,000; for the provision of Vehicle Engineering and Equipment (VEEC) Architect/Engineer Consulting Services, with services to be performed under each contract over a period of four years scheduled to commence in July 2016, as described in the staff summary on this subject, Request for Proposals No AAGO - VEEC - Architect/Engineer Services. 5. To Independence Blue Cross, LLC, for the provision of a Self-Insured Group Medical Program for approximately 24,000 SEPTA employees, retirees and their dependents, with services to be performed over a period of five years scheduled to commence on August 1, 2016, as described in the staff summary on this subject, for a total contract amount not to exceed 802,556,274, Request for Proposals No AJGW - Employee Group Medical Program." III.D. AUTHORIZATION TO EXECUTE CONSULTANT AMENDMENTS "WHEREAS, additional work is required to complete the project identified below; and WHEREAS, staff reviewed the additional work and the General Manager recommended that the Board authorize SEPTA to enter into the amendment for the additional work. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to award and the General Manager or his designee to execute the consultant amendment identified below in form approved by the Office of General Counsel, subject to the concurrence of the funding agencies, if required, and to any applicable Disadvantaged Business Enterprise requirements: 1. To Gannett Fleming, Inc., for Amendment No. 6, which provides for a budget reallocation/replenishment and a 1,052 calendar day time extension to Phase B of the architectural/ engineering, design and construction-related services contract for the Bucks County Intermodal Improvements Project Levi ttown, thereby establishing a new contract completion date of November 30, 2018, at an increase in cost not to exceed 419,831, bringing the total contract price, including all amendments to date, to an amount not to exceed 4,099, To LTK Engineering Services, Inc., for Amendment No. 5, which provides for a one-year time extension for the consultant services contract to support the New Payment Technologies Program (now known as the Key Program), thereby establishing a new contract completion date of October 31, 2017, at an increase in cost not to exceed 1,642,233, bringing the total contract price, 9

10 Minutes of the Regular Board Meeting June 23, 2016 including all amendments to date, to an amount not to exceed 13,787,715." IV. A.1. REIMBURSEMENT AGREEMENT BETWEEN SEPTA AND DOYLESTOWN TOWNSHIP RELATING TO CONSTRUCTION OF A PEDESTRIAN GRADE CROSSING ON THE RIGHT-OF-WAY OF SEPTA'S LANSDALE/DOYLESTOWN REGIONAL RAIL LINE IN THE VICINITY OF LOWER STATE ROAD IN BUCKS COUNTY "WHEREAS, Doylestown Township ("Township") is undertaking installation of a shared use recreational trail to be used by the general public in the vicinity of Lower State Road and the railroad right-of-way of SEPTA's Lansdale/Doylestown Regional Rail Line in Doylestown, Bucks County("Project"); and WHEREAS, in order to improve connectivity of the trail and increase safety, the Township has requested that a pedestrian crossing be constructed by SEPTA at the existing Lower State Road highway grade crossing, which will include new (i)surface mounted pre-cast concrete crossing panels; (ii) pedestrian grade-crossing warning devices with revised clearance times to be synchronized with the existing warning devices; (iii) signage; (iv) detectable warning surfaces; (v) pedestrian signal heads; and (vi) pavement markings; and WHEREAS, SEPTA and the Township have negotiated an agreement under which the Township will reimburse SEPTA 100% of the actual construction costs for the pedestrian crossing (estimated at 299, 398) that SEPTA will incur in connection with the Project; and WHEREAS, staff requested that the General Manager recommend that the Board authorize SEPTA to enter into the proposed reimbursement agreement with the Township under the terms and conditions set forth above and more fully described in the pertinent staff summary; and WHEREAS, the General Manager made the recommendation. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to enter into a reimbursement agreement with Doylestown Township with respect to construction of a pedestrian grade crossing in the vicinity of SEPTA' s Lansdale/Doylestown Line railroad right-of-way at Lower State Road under the terms and conditions that are set forth within the pertinent staff summary. FURTHER RESOLVED, that the Board hereby authorizes the General Manager or his designee to execute all documents, in form approved by the Office of General Counsel, and to do any and all other things as shall be deemed necessary and proper in order to effectuate the purpose of this Resolution." 10

11 Minutes of the Regular Board Meeting June 23, 2016 IV.A.2. MEMORANDUM OF AGREEMENT BY AND BETWEEN SEPTA AND THE BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND TRAINMEN - DIVISION 71 "WHEREAS, negotiations between representatives of SEPTA and the Brotherhood of Locomotive Engineers and Trainmen - Division 71 ("Union") resulted in a proposed Memorandum of Agreement which governs the terms and conditions of employment of the bargaining unit employees whom the Union represents; and WHEREAS, SEPTA staff communicated to the Board the terms of the proposed Memorandum of Agreement and the terms are summarized within the pertinent staff summary; and WHEREAS, the appropriate members of the Union have ratified the Memorandum of Agreement; and WHEREAS, the General Manager recommended that the Board approve and ratify the proposed Memorandum of Agreement. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby approves and ratifies the proposed Memorandum of Agreement by and between SEPTA and the Brotherhood of Locomotive Engineers and Trainmen - Division 71 which governs the terms and conditions of employment of the bargaining unit employees whom the Union represents. FURTHER RESOLVED, that the Board hereby authorizes the General Manager or his designee and appropriate managers of SEPTA to take all necessary and proper action including, but not limited to, amending agreements with the providers of medical, prescription and dental benefits and life insurance, in order to implement the terms and conditions of the Memorandum of Agreement and to do all other acts necessary and proper to effectuate this Resolution." IV.A.3. AGREEMENT WITH INDEPENDENCE VISITOR CENTER CORPORATION RELATED TO PHILADELPHIA PHLASH SERVICE "WHEREAS, for the past few years SEPTA recognized the need for public transit service during the tourist season that would connect center city Philadelphia (including SEPTA's Jefferson Station and Suburban Station), Please Touch Museum and Philadelphia Zoo; and WHEREAS, SEPTA also recognized that SEPTA's establishing such a route would be very expensive; and WHEREAS, from 2009 through 2013 the Board authorized SEPTA to enter into agreements with Central Philadelphia Transportation Management Association ("CPTMA") whereby CPTMA would extend its Philadelphia Phlash bus route ("Phlash") from center city Philadelphia to the Please Touch Museum and Philadelphia Zoo; and 11

12 Minutes of the Regular Board Meeting June 23, 2016 WHEREAS, since the Independence Visitor Center Corporation ("IVCC") has been the current operator of the Phlash service; and WHEREAS, the service was so successful in prior years that management wishes to renew the service during the 2016 tourist season; and WHEREAS, IVCC offered to operate the Phlash service from center city Philadelphia to Please Touch Museum and Philadelphia Zoo under the same terms by which it provided the service in 2015; and WHEREAS, SEPTA will pay to IVCC an amount not to exceed 250, 000 for the service which is tentatively scheduled to run between March 24, 2016 and December 31, 2016; and WHEREAS, in return IVCC will accept as fares valid TransPasses, Trail Passes, Cross County Passes and Independence Passes for unlimited rides (between 10: 00 am - 6: 00 pm) seven days a week from May 1, 2016 through Labor Day (September 5, 2016) and from November 25, 2016 through December 31, 2016, and on Fridays, Saturdays, and Sundays from March 24, 2016 through April 30, 2016 and September 9, 2016 through November 20, 2016; and WHEREAS, staff requested that the General Manager recommend that the Board authorize SEPTA to enter into the agreement with IVCC for the operation of Phlash service under the terms that are set forth in the pertinent staff summary; and WHEREAS, Board. the General Manager made the recommendation to the NOW, THEREFORE, BE IT RESOLVED, that authorizes SEPTA to enter into the agreement Visitor Center Corporation for the operation Philadelphia Phlash bus route as described pertinent staff summary. the Board hereby with Independence of service on the above and in the FURTHER RESOLVED, that the Board hereby authorizes the General Manager or his designee to execute all documents, in form approved by the Office of General Counsel, and to do any and all other things as shall be deemed necessary and proper in order to effectuate the purpose of this Resolution." 12

13 Minutes of the Regular Board Meeting June 23, 2016 IV.A.4. GRANT OF EASEMENTS FROM SEPTA TO SUNOCO PIPELINE, L.P. REGARDING FOUR PIPELINE OCCUPANCIES ALONG SEPTA'S WEST CHESTER BRANCH AND CHESTER CREEK BRANCH RAILROAD RIGHT-OF-WAYS IN CONJUCTION WITH SUNOCO'S MARINER EAST II PROJECT IN DELAWARE COUNTY "WHEREAS, Sunoco Pipeline, L.P. ("Sunoco") is in the process of installing a 16" pipeline and a 20" pipeline to transport natural gas liquids ("NGLs") from Ohio through West Virginia, Pennsylvania and Delaware to Sunoco's Marcus Hook facility along the Delaware River as part of their Mariner East I I Project ("Project"); and WHEREAS, portions of the forgoing pipelines will traverse portions of SEPTA's railroad right-of-way and transmission line right-of-way located in the vicinities of Aston Township, Middletown Township and Brookhaven Borough in Delaware County; and WHEREAS, on August 3, 2015, SEPTA and Sunoco entered into a Master Pipeline Fee Schedule Agreement ("Master Agreement") which encompasses all existing and future pipeline occupations and specifically delineates protocols for any and all proposed future occupations; and WHEREAS, according to the terms of the Master Agreement, all easements entered pursuant thereto will collectively terminate 29.5 years from the date of the Master Agreement ending in February 2044, with an option to renew said easements for an additional period of 29.5 years; and WHEREAS, pursuant to the Master Agreement, Sunoco will pay SEPTA an upfront lump sum amount representing an annual rate multiplied by the pro-rated years remaining on the Master Agreement ending in February 2044, with Sunoco having the option to extend the easements, as set forth above, which will thereby enable Sunoco to generate estimated potential revenues in excess of 1,700,00 as a result of the pipelines; and WHEREAS, SEPTA will grant Sunoco the four (4) separate easements for only the actual portions of the SEPTA railroad and transmission right-of-ways contained within the pipelines relating to the Project; and WHEREAS, Sunoco's plans for installation and maintenance of the pipelines will be strictly subject to SEPTA's EM&C Division prior review and approval; and WHEREAS, if required, SEPTA staff will obtain any necessary Federal Transit Administration ( FTA) concurrences of the transactions contemplated hereunder; and 13

14 Minutes of the Regular Board Meeting June 23, 2016 WHEREAS, staff requested that the General Manager recommend that the Board authorize SEPTA to enter into the easement agreements with Sunoco pursuant to the provisions of the Master Agreement, under the terms and conditions as set forth above and more fully described in the pertinent staff summary, and WHEREAS, Board. the General Manager made the recommendation to the NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to enter into four separate easement agreements with Sunoco Pipeline, L.P., for installation of two 16-inch pipelines and two 20" pipelines to transport NGLs as required for Sunoco's Mariner East II Project, in accordance with the Master Pipeline Fee Schedule Agreement, under the terms and conditions set forth within the pertinent staff summary. FURTHER RESOLVED, that the Board hereby authorizes the General Manager or his designee to execute all documents, in form approved by the Office of General Counsel, and to do any and all other things as shall be deemed necessary and proper in order to effectuate the purpose of this Resolution." IV.A.5. AUTHORIZATION TO SELL SURPLUS NHSL PROPERTY AND GRANT A TEMPORARY CONSTRUCTION EASEMENT TO THE PENNSYLVANIA DEPARTMENT OF TRANSPORTATION TO FACILITATE RECONSTRUCTION OF AN EXISTING BRIDGE LOCATED IN HAVERFORD TOWNSHIP, DELAWARE COUNTY "WHEREAS, the Pennsylvania Department of Transportation ("PennDOT") has requested SEPTA to sell them approximately 9,448 square feet of surplus Norristown High Speed Line (NHSL) rightof-way, as well as grant them an approximate 3,720 square foot aerial easement and a 213 square foot temporary construction easement required to complete the reconstruction of the substructure and super structure of the highway bridge located at Haverford Road and College Avenue in Haverford Township, Delaware County ("Project"); and WHEREAS, PennDOT ordered a fair-market valuation appraisal and offered SEPTA as just compensation the amount of 34,000 (or approximately 3.90 per square foot) for the surplus property and aerial easement, along with 200 for the temporary construction easement; and WHEREAS, staff requested that the General Manager recommend that the Board authorize SEPTA to enter into an agreement of sale with PennDOT with respect to the purchase of 9,448 square feet of SEPTA's surplus NHSL right-of-way, along with granting PennDOT a 3,720 square foot aerial easement and 213 square foot temporary construction easement, to facilitate completion of the Project under the terms and conditions set forth above and more fully described in the pertinent staff summary; and 14

15 Minutes of the Regular Board Meeting June 23, 2016 WHEREAS, Board. the General Manager made the recommendation to the NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to enter into the proposed agreement of sale, aerial easement and temporary construction easement with the Pennsylvania Department of Transportation, with respect to reconstruction of the bridge at Haverford Road and College Avenue, under the terms that are set forth within the pertinent staff summary. FURTHER RESOLVED, that the Board hereby authorizes the General Manager or his designee to execute all documents, in form approved by the Office of General Counsel, and to do any and all other things as shall be deemed necessary and proper in order to effectuate the purpose of this Resolution." IV.B. AUTHORIZATION TO AWARD CONTRACTS FOR VARIOUS PROCUREMENTS "WHEREAS, SEPTA advertised and invited bids for the supplies identified below; and WHEREAS, the firms listed below were the lowest responsive and responsible bidders to the invitation for bids; and WHEREAS, staff requested that the General Manager recommend that the Board authorize SEPTA to award the contracts identified below; and WHEREAS, Board. the General Manager made the recommendation to the NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to award and for the General Manager or his designee to execute the contracts identified below in form approved by the Office of General Counsel, subject to and contingent upon the concurrence of the funding agencies, if required, and contingent upon and subject to the vendors satisfactorily meeting all requirements of the bid terms and specifications, including full compliance with any applicable Disadvantaged Business Enterprise requirements: 1. To Progress Rail Services Corporation, for the purchase of track circuit equipment to be used for renewal projects on the SEPTA's West Chester Line, with delivery of material scheduled to commence in August 2017, as described in the staff summary on this subject, for a total contract amount not to exceed 1, 450, 2 65, Sealed Bid No ACZC Track Circuit Equipment for West Chester Line. 2. To Globe Electric Supply Company, for Items Nos. 1-5, for the purchase of various sizes of high-visibility, flame retardant/arc resistant safety vests, at unit prices of , 15

16 Minutes of the Regular Board Meeting June 23, , 51.88, and 57.88, respectively, with delivery of material scheduled to commence in July 2016, as described in the staff summary on this subject, for a total contract amount not to exceed 535,402.80, Sealed Bid No ADWC - Safety Vests. 3. To Alstom Signaling, Inc., for the purchase of components to be used on the Automatic Train Control (ATC) System to replace existing equipment at Arsenal Interlocking, with delivery of material scheduled to commence in October 2016 with staggered deliveries occurring over a period of 13 months, as described in the staff summary on this subject, for a total contract amount not to exceed 3, 459, 044, Sealed Bid No ACZC - ATC for Arsenal Interlocking. 4. To Xorail, Inc., a Wabtec Company, for the purchase of material related to the Automatic Train Control (ATC) System to be used for renewal projects on SEPTA's Regional Rail System from Elwyn to Wawa, with deli very of material scheduled to commence within 30 calendar days after issuance of Notice-to-Proceed, as described in the staff summary on this subject, for a total contract amount not to exceed 4, 345, 787, Sealed Bid No ACZC - ATC for Elwyn to Wawa. 5. To Simmons Machine Tool Corporation, for the supply and installation of a tandem underfloor wheel truing machine to be used as part of the Frazer Shop and Yard Expansion Project, with delivery of material and performance commencing within 510 calendar days after issuance of Notice-to-Proceed, as described in the staff summary on this subject, for a total contract amount not to exceed 5, 669, 295, Sealed Bid No AMJP - Frazer Shop Wheel Truing." IV.C. AWARD OF VARIOUS CONTRACTS FOR SOLE SOURCE PROCUREMENTS "WHEREAS, SEPTA has need for the described below and those supplies and only from the firms listed below; and supplies and services services are available WHEREAS, staff reviewed the cost of the supplies and services and the General Manager recommended that the Board authorize SEPTA to award the contracts. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to award and the General Manager or his designee to execute the contracts identified below, all in form approved by the Office of General Counsel, subject to the concurrence of the funding agencies, if required, and contingent upon and subject to each vendor I contractor satisfactorily providing any required bonds, insurance certificates and/ or other documents, and complying with any applicable Disadvantaged Business Enterprise requirements: 16

17 Minutes of the Regular Board Meeting June 23, To Urban Transportation Associates, Inc., for the provision of the training, maintenance and support services for the Automatic Passenger Counter (APC) software package used on approximately 540 SEPTA vehicles equipped with APC, with services to be performed over a period of two years scheduled to commence on July 1, 2016, as described in the staff summary on this subject, for a total contract amount not to exceed 48, To Tyco Integrated Security, LLC, for the provision of monitoring, maintenance and inspection (MMI) services for SEPTA' s fire and security alarm systems at various locations throughout the Authority, with services to be performed over a period of five years scheduled to commence in July 2016, as described in the staff summary on this subject, for a total contract amount not to exceed 1,850, To ARINC, Incorporated, for the provision of software engineering services to support the Real Time Vehicle Locating Project, with services scheduled to be performed over a period of 485 calendar days after issuance of Notice-to-Proceed, as described in the staff summary on this subject, for a total contract amount not to exceed 1,049, To Xerox Transport Solutions, Inc., for the provision of a software upgrade to be used in modifying SEPTA's Bus Control System in support of the Real Time Vehicle Location Project (RTVL), with services to be performed over a period of 180 calendar days after issuance of Notice-to-Proceed, as described in the staff summary on this subject, for a total contract amount not to exceed 528,749." IV.D. AUTHORIZATION TO EXECUTE CHANGE ORDERS AND.AMENDMENTS "WHEREAS, additional work is required to complete the projects identified below; and WHEREAS, staff reviewed the cost of the additional work and the General Manager recommended that the Board authorize SEPTA to order the additional work. NOW, THEREFORE, BE IT RESOLVED, that the Board hereby authorizes SEPTA to award and the General Manager or his designee to execute the change orders/amendments identified below in form approved by the Office of General Counsel, subject to the concurrence of the funding agencies, if required, and to any applicable Disadvantaged Business Enterprise requirements: 1. To Shepard Bros., Inc., for Change Order No. 2, which provides for technical modifications to the purchase of 232 Cutaway Mini-Buses used for CCT paratransit services, at an increase in cost not to exceed 122, 500, bringing the total contract price, including all change orders to date, to an amount not to exceed 17,363,

18 Minutes of the Regular Board Meeting June 23, To MV Transportation, Inc., for Amendment No. 1, which provides for a 93 calendar day time extension for operation of ADA Paratransit and Shared Ride Program (SRP) Services in Philadelphia County, thereby establishing a new contract completion date of October 29, 2016, at an increase in cost not to exceed 3, 712, 812, bringing the total contract price, including this amendment, to an amount not to exceed 66,747, To New Flyer of America, Inc., for Change Order No. 1, which provides for changes to the specifications and credits for the purchase of 30-foot low floor diesel buses used for CCT contract operations, at a net increase in cost not to exceed 236, , bringing the total contract price, including this change order, to an amount not to exceed 17,472, " Speakers Matt Wang Mr. Deon then called for speakers. Mr. Wang introduced himself and said he was present on behalf of 350 Philadelphia's Fossil Free SEPTA campaign. He read from the written material he submitted, which is attached to these Minutes as Exhibit "B." Mr. Wang also submitted correspondence from Judy Morgan and Hap Haven, which are also attached to these Minutes as Exhibit "C" and Exhibit "D". Nora Levitt Ms. Levitt, President of the Wynnefield Cultural Center Advisory Council, Board Member of the Wynnefield Residents Association and Board Member of the Friends of the Wynnefield Library addressed the Board. She stated that she has spoken at previous Board meetings on various topics. Ms. Levitt stated that she was present today to speak on two topics. She said she recently read that SEPTA would be acquiring 525 new buses and she said that her wish was to have an assurance that these vehicles would be equipped with enough hand-holds, both horizontal and vertical poles, located behind the drivers so that people would not fall. Ms. Levitt stated that she has seen some of the new buses and they were not equipped with these types of handholds. She indicated that she has spoken with a person in charge who informed her that they would retrofit some of them. Ms. Levitt inquired if staff checked on whether the new buses would have these handholds to prevent people from falling down and creating lawsuits. She asked for an assurance. she Ms. has Levitt had a spoke on her second topic of concern. She said problem with the Route 40 bus on the third 18

19 Minutes of the Regular Board Meeting June 23, 2016 Wednesday of each month, between 12: 00 Noon and 2: 00 PM. Ms. Levitt said that the bus was either broken down or never arrive. She said she also experienced a similar situation on Thursdays. Ms. Levitt closed by stating that she noticed in the budget for the year that there was no money to get a long term lease for a turn-around on City Line Avenue for the Route 52 bus. She requested that this matter be considered or the residents of Wynnefield would keep annoying the Board until a resolution was reached. Chairman Deon thanked Ms. Levitt. He asked Ron Hopkins to meet with Ms. Levitt following the meeting. Chairman Deon then requested Jeff Knueppel to present his report. Report of General Manager Mr. Knueppel stated that at 6:00 a.m., Monday, June 13th the future of fare payment for SEPTA began with the launch of our Early Adopters Program. He mentioned that customers arriving at the Broad Street Subway and Market Frankford Line Stations and 1234 Market Street were greeted by our team made up of Transportation, Revenue, Transit Police, and Ambassadors. Mr. Knueppel stated that everyone was ready to answer questions and offer tips on how to purchase and reload a TransPass on the new Key Card. He commented that staff received valuable comments and suggestions to consider for program fine tuning as well as positive feedback from customers. Mr. Knueppel reported that at the end of July, Philadelphia will play host to the 2016 Democratic National Convention. He said that staff was preparing our system and vehicles to carry our regular customers and visiting riders, including making certain our stations and the Center City pedestrian concourses were ready to welcome the thousands of delegates, volunteers, and members of the press from across the country and around the world coming to the City. He mentioned that SEPTA Ambassadors would be out in full force to welcome convention attendees when they arrive in Philadelphia and to assist them with SEPTA travel and visitor information during their stay. Mr. Knueppel stated that as part of the citywide attractions during the DNC, we would have an exhibit, in the lobby of this building, showcasing the history of innovation for our bus fleet. He stated that among the highlights would be a look at the new battery electric buses that the Authority would be purchasing through a 2. 6 million grant from the Federal Transit Administration's Low and No-Emission Vehicle program. Mr. Knueppel mentioned that Proterra would be bringing a specially wrapped promotional bus that would be on display and available to test ride while the DNC was in town. 19

20 Minutes of the Regular Board Meeting June 23, 2016 Mr. Knueppel concluded his report and stated that Trolley Tunnel Blitz outage would take place July gth through the 18th. He mentioned that this year, the work was being done before the DNC and that the schedule was shortened to only one week. Mr. Knueppel commented that our customers have been very supportive of our annual efforts to enhance safety and improve reliability for their Trolley service and he thanked them for their continued cooperation during this temporary change in service. Adjournment There being no further business to come before the Board at this Regular Meeting, it was moved by Mr. Babcock seconded by Mr. Martin, and unanimously adopted that the meeting be adjourned at 3:23 PM. A transcript of this meeting was made by an official court reporter and is made a part of the original Minutes. Carol R. Looby Secretary 20

21 SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY FINANCIAL REPORT MAY 2016 For Period Ended May 28, 2016 June 14, 2016 t:rj >:: ::r: H b:l H 1-3 ~

22 FINANCIAL REPORT - MAY 2016 COMMENTARY Summary of Financial Results and Commentary GROUP 1 - CONSOLIDATED OPERATIONS (1.1) Consolidating Statement of Income - (YTD) (1.2) Consolidating Statement of Revenue and Expense - (YTD) (1.3) Consolidating Statement of Income - (One Month) (1.4) Consolidating Statement of Revenue and Expense - (One Month) GROUP 2 - CITY TRANSIT DIVISION (2.1) Comparative Statement of Income (2.2) Detail Income Statement - (One Month) (2.3) Detail Income Statement - (YTD) GROUP 3 - VICTORY DIVISION (3.1) Comparative Statement of Income (3.2) Detail Income Statement - (One Month) (3.3) Detail Income Statement - (YTD) GROUP 4 - FRONTIER DIVISION (4.1) Comparative Statement of Income (4.2) Detail Income Statement - (One Month) (4.3) Detail Income Statement - (YTD) GROUP 5 - REGIONAL RAIL DIVISION (5.1) Comparative Statement of Income (5.2) Detail Income Statement - (One Month) (5.3) Detail Income Statement - (YTD)

23 co ~ 0 N ~ :!: 1-- 0::: 0 a. w 0:::..J < u z < z LL >- 0::: < 1-- z w :!: :!: 0 u 2:- cu... c Q) E E 0 u 'U c cu ::J (/) Q) 0::: cu c::; c cu c u: 4-0 2:- cu E E ::J Cl)

24 SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY MAY AND YEAR-TO-DATE RESULTS OF OPERATIONS SUMMARY The following is a summary of Divisional operating results (i.e. deficit before operating subsidies) and consolidated results after subsidies for May 2016 and the eleven-month period then ended. The results are compared to the Fiscal Year 2016 budget and to the prior year results in the accompanying financial statements. {IN THOUSANDS) ELEVEN MONTHS DIVISION MONTH OF MAY ENDED MAY City Transit (41,835) (43,942) (504, 164) (489, 185) Victory (4,540) (5,695) (63, 100) (62,419) Frontier (1,777) (1,843) (22,048) (22,263) Regional Rail (14,262) (11,141) (148,872) (138, 155) Total Deficit Before Subsidies (62,414) (62,621) (738, 184) (712,022) Operating Subsidies 61,452 62, , ,717 Surplus/(Deficit) After Subsidies (962) {271) Unrealized Investment Gain/(Loss) (81) (59) Surplus/(Deficit) after Investment Gain/(Loss) (1,043) (330) 438 1,686 The deficit after subsidies for the month of May was 962 thousand and the cumulative surplus for the eleven months was 170 thousand. Passenger revenue for the month was 1.3 million (or 2.8%) lower than budget. Passenger revenue for the eleven months of Fiscal 2016 was 10.0 million (or 2.3%) lower than budget. Shared Ride Program revenue was 69 thousand lower than budget for the month of May and was 202 thousand (or 1.2%) lower than budget for May year-to-date. Operating expenses for the month of May were 385 thousand better than budget. For the elevenmonth period, operating expenses were 11.2 million (or 0.9%) better than budget. The favorable expense variance is - 1 -

25 SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY MAY AND YEAR-TO-DATE RESULTS OF OPERATIONS being partially offset by 1.6 million in lower than anticipated lease costs and debt service subsidies. The results for May reflect a portion of the 33 million in budgeted expense and subsidy reductions that will be proposed for adoption at the June 2016 Board meeting. DIVISIONAL COMMENTARY ON MAY AND YEAR-TO-DATE RESULTS CITY TRANSIT DIVISION The Division's operations for May 2016 resulted in a deficit before subsidies of 41.8 million for the month and a year-to-date deficit before subsidies of million, which is 1.6% lower than budget. Passenger revenue for the month of May was 748 thousand (or 2.6%) lower than budget. For the eleven months of Fiscal 2016 total passenger revenue was 7.9 million (or 2.9%) lower than budget. Shared Ride Program revenue for May year-to-date was 202 thousand (or 1.2%) lower than budget. Operating expenses for the eleven-month period were lower than budget. For the first eleven months of the fiscal year, the operating surplus after subsidies was 123 thousand. VICTORY DIVISION The Division's operations for May resulted in a deficit before subsidies of 4.5 million bringing the cumulative deficit before subsidies for the eleven months of the fiscal year to 63.1 million, which is 5.0% better than budget. Passenger revenue for May was 24 thousand (or 1.1 %) lower than budget and for the eleven months of Fiscal 2016 was 703 thousand (or 3.3%) lower than budget. Operating expenses for the eleven-month period were better than budget. For the first eleven months of the fiscal year, the operating surplus after subsidies was 16 thousand