Agenda Item No. 5.B

To:           Board of Directors
                 Special Meeting of September 12, 2003

From:       Celia G. Kupersmith, General Manager

Subject:   AUTHORIZE ACTIONS RELATIVE TO THE TABLE OF ORGANIZATION:
                 1. APPROVE ELIMINATION OF VARIOUS POSITIONS WITHIN THE TABLE OF

                 ORGANIZATION; AND,

                  2. APPROVE ENHANCED SEPARATION PACKAGE

Recommendation

In response to the serious financial crisis facing the District, it is recommended that the Board of Directors approve the following actions:

1. Authorize a phased elimination of 140 positions within the Table of Organization, to be effective November 2, 2003, and January 2, 2004, and March 1, 2004, and authorize the General Manager to take necessary steps to implement the phased reduction-in-force. Five additional positions would also be converted from year-round positions to seasonal positions effective only during the San Francisco Giants baseball season when special ferry service is routinely provided to Pacific Bell Park; and,

2. Approve the offer of an Enhanced Separation Package option for non-represented employees identical to the package offered during the March/April 2003 reduction-in-force. This option would be in effect and available for 45 days, beginning the date the package is offered to individuals who are specifically subject to involuntary layoff as a result of this reduction-in-force; and,

3. Authorize staff to engage in meet-and-confer meetings with affected unions regarding implementation of the authorized reduction-in-force within their unit.

Background Information

The Golden Gate Bridge, Highway and Transportation District (District) continues to face an unprecedented financial crisis. As outlined in the FY 2004 budget, this situation has been created by several factors including an economic recession reducing auto and transit travel; rising costs, particularly in the areas of insurance, pension contributions, and employee health and welfare benefits; additional security expenses; and a reduction in grant funding sources which can be used for operating expenses.

To address the financial crisis, the Board of Directors adopted a plan to reduce the $202 million shortfall projected for the next five fiscal years (2004-2008). This included a reduction of approximately $145 million in expenses which translates to a $25 million expense reduction for FY 2004. Earlier this year, a March/April reduction-in-force took place, with an estimated annual savings of $2.4 million. Of the remaining amount, $20 million was to be achieved through transit reductions. Much of the remaining savings will be accomplished through bus service reductions effective November 2, 2003.

The decision to eliminate approximately 30 percent of the Districts transit service effective November 2, 2003, leads to an accompanying need to eliminate many jobs. In addition to the positions to be eliminated due to the transit downsizing, senior management staff was asked to review their areas of responsibility to identify what savings might be achieved. The combined financial savings result of the transit service reductions and the workflow analyses is approximately $12.1 million in annual savings. Filled positions account for $7.4 million of the savings, and the remaining $4.7 million will come from vacant positions. Currently 89 of these positions are filled, and 56 are vacant. As of September 3, 2003, the following positions were filled and vacant:

Proposed Elimination of Filled Positions

Proposed Elimination of Vacant Positions

The Labor Advisory Committee has reviewed and approved for forwarding to the full Board of Directors this list of positions. The Labor Advisory Committee also recommends the Enhanced Separation Package, which is identical to the package which was offered during the March/April reduction-in-force. Attachment 1 shows the separation provisions from both the Human Resources Guide and the proposed enhanced option offered previously. The Committee and staff recommend offering this package to non-represented employees who are specifically and involuntarily laid off by this reduction-in-force. It would not be available to volunteers. By law, the employee would have 45 days to select the package. The 45 days would begin the date the employee is actually given the package for consideration. While some employees have already been selected for single incumbent position elimination, there are some cases where a selection process must occur. In these cases, the package would not be made available until the actual employee is identified for layoff. All employees who are involuntarily laid off, whether they choose the enhanced package or the standard one which allows them to retain recall rights, will be eligible to participate in scheduled outplacement activities including training for job searches, resume writing, interviewing tips, etc. A tuition package is also available, based on the years of service with the District.

If this phased reduction-in-force is approved by the Board today, a series of implementation steps will begin immediately with formal written notification to the various employee classifications of the intent to eliminate positions and their applicable effective date. The affected unions will receive notification of the position eliminations and will be offered a meet-and-confer opportunity. Once again, an appeals process will be available for employees who request that their selection be reviewed, with the final decision resting with the General Manager.

Fiscal Impact

Authorization to eliminate these 140 positions in the Table of Organization, and convert five additional positions in the Ferry Division to seasonal positions, would result in annual savings, at current wage rates and fringe benefits, of approximately $12.1 million. The amount of savings in the FY 2004 Budget is less than $12.1 million because these positions will be eliminated part way through the fiscal year. The cost to implement the Enhanced Separation Package is currently unknown as it depends upon the number of employees who elect to take the enhanced package.

Attachment (PDF File)