September 14, 2007
(For Board: September 28, 2007)

 

REPORT OF THE FINANCE-AUDITING COMMITTEE/
COMMITTEE OF THE WHOLE

Honorable Board of Directors
Golden Gate Bridge, Highway
  and Transportation District

Honorable Members:

A meeting of the Finance-Auditing Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Friday, September 14, 2007, at 9:30 a.m., Chair Stroeh presiding.

Committee Members Present (9): Chair Stroeh; Vice Chair Pahre; Directors Boro, Cochran, Eddie, Grosboll, Middlebrook and Reilly; President Moylan (Ex Officio)
Committee Members Absent (0): None
Other Directors Present (7): Directors Brown, Dufty, Hernández, Kerns, McGlashan, Newhouse Segal and Sanders

Committee of the Whole Members Present (16): Directors Brown, Cochran, Dufty, Eddie, Grosboll, Hernández, Kerns, McGlashan, Middlebrook, Newhouse Segal, Pahre, Reilly, Sanders and Stroeh; First Vice President Boro; President Moylan
Committee of the Whole Members Absent (3): Directors McGoldrick and Sandoval; Second Vice President Ammiano

Staff Present: General Manager Celia G. Kupersmith; Auditor-Controller Joseph M. Wire; Secretary of the District Janet S. Tarantino; Attorney David J. Miller; Deputy General Manager/Bus Division Susan C. Chiaroni; Deputy General Manager/Ferry Division James P. Swindler; Deputy General Manager/Administration and Development Teri W. Mantony; Director of Risk Management and Safety William Stafford; Assistant Clerk of the Board Patsy Whala

Visitors Present: None

 

     
1.

Update on the Workers’ Compensation Program

In a memorandum to Committee, Director Risk Management & Safety William Stafford, Deputy General Manager Administration and Development Teri Mantony, Auditor- Controller Joseph Wire and General Manager Celia Kupersmith presented an informational report to update the Board on the Workers’ Compensation Program (WC Program). The report summarized the costs, claims trends, fiscal impact and strategic issues relevant to the WC Program.

The report stated that the District has continued to see a reduction in workers’ compensation costs and a decrease in the frequency of reported indemnity (lost-time) injuries. Although some of the success of the WC Program can be attributed to changes in workers’ compensation legislation, most of the success is due to more aggressive claims management and the commitment of District employees to work safely. The report noted that work-related injuries in the Ferry Division are subject to the federal Jones Act for work performed upon vessels. Although the Jones Act claims are a small part of the WC Program because of the small number of affected employees, in the past these claims have added significantly to the workers’ compensation costs. The report reiterated some of the highlights of the workers’ compensation experience over FY 06/07, including current and future actions to pursue in order to further reduce and protect cost savings for the District.

The report described the District’s new Medical Provider Network (MPN), which will be in place in October 2007. The report stated that California State law permits an employer to establish an MPN to curtail workers’ compensation costs. An MPN must include a mix of doctors specializing in work-related injuries and with expertise in general areas of medicine.

The report described the features and benefits of the new MPN:

  • The ability to customize a network of doctors with good treatment records;
  • The ability to transfer care cases on chronic injuries incurred prior to April 2004;
  • Greater oversight of medical treatment on new injuries;
  • Immediate access to primary and specialty care providers;
  • The elevation of the quality of medical care;
  • Better return-to-work results because of better care; and,
  • A cooperative network tuned into needs of the District and employees.

The report also stated that representatives from the Union Coalition and the Amalgamated Transit Union have been provided with the MPN components and expectations and were advised that other doctors could be added, if desired. The District’s MPN is expected to result in approximately $45,000 in net savings during the first year. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

At the meeting, Mr. Stafford summarized the staff report and provided a PowerPoint presentation, which included charts and graphs depicting various aspects of the WC Program, including the number and types of claims over the past several years. Mr. Stafford displayed charts to show that the District has continued to experience a decrease in claims frequency and costs. He noted that the chart illustrating the District’s total payouts under the WC Program shows relatively flat figures for the past three years; however, due to increasing medical costs, the figures actually demonstrate how the District is doing a better job of controlling expenses while providing treatment for the employees. He also noted that staff and the District’s Third Party Administrator (TPA) have effectively managed the closure of open claims, reducing the number of open indemnity claims from 300 in FY 05/06 to 244 in FY 06/07, and have used $2 million less in District reserves than projected.

Mr. Stafford stated that safety awareness programs have contributed to the improvement in WC Program, including the ergonomic assessment of the way employees perform their work. He also stated that, going forward, the emphasis will be on the District’s safety and the safety culture and staff will present a report on the Safety and Training Program to the Board in fall 2007. Furthermore, he described the District’s MPN, which will be customized into a “boutique” of 750 specialized physicians that have both an understanding and the experience of industrial injuries. He also stated that employees will be allowed to pre-designate their physician selection from the MPN, which will include Kaiser Permanente physicians. He also stated that the General Manager will be sending a notification letter to all District employees to explain the MPN program.

Discussion ensued, including the following:

  • Director Cochran made the following comments and inquiries:
    • He inquired as to whether the payout for workers’ compensation claims for FY 06/07 include fees paid to the District’s TPA. In response, Mr. Stafford stated that the $2.1 million figure is what was paid on behalf of the injured employees. He noted that fees that are paid to the District’s TPA and the attorneys are included in the loss adjustment expenses.
    • He inquired as to whether the District would be in contractual relationships with the 750 physicians in the MPN. In response, Mr. Stafford stated that there will be an agreement with each physician in the MPN, which will be handled by the firm that manages the MPN.
    • He inquired as to whether the physicians in the MPN have agreed to accept a pre-determined rate for their services. In response, Mr. Stafford stated that the physicians in the MPN have agreed to handle workers’ compensation claims in accordance with regulations, with regard to the timely submittal of reports, as well as following treatment guidelines.
  • Director Boro commended staff for the presentation and commented that he would like the upcoming report on the District’s Safety and Training Program, to include the following: 1) a system to ensure that the employees have received training; 2) the methods that are practiced for accident prevention; and, 3) accountability for managers regarding safety and training. He also commented that it is important that the employees and managers work together, when a lost-time injury occurs, to find out how it happened and how to change the training in order to prevent future accidents. In response, Mr. Stafford stated that the following six factors are key to the WC Program: 1) Management; 2) Supervision; 3) Hiring Practices; 4) Training; 5) Safety and Health Programs; and, 6) Claims Management.
  • Director Newhouse Segal commended staff for the presentation and commented that the trend for improvements in the WC Program not only represents less costs to the District, but also represents a change in the work force culture with regard to more appreciation for safety along with a healthier lifestyle.
  • Director Grosboll inquired as to whether or not the District has resolved any of the old open indemnity claims. In response, Mr. Stafford stated that the District has managed the closure of 56 open indemnity claims. He noted that these cases can be slowed down by the litigation process. He also noted that approximately 60 cases involve employees who no longer work at the District.
  • Director Pahre made the following comments and inquiries:
    • She commented that, in her opinion, employees once had the attitude that workers’ compensation payouts came from a seemingly unlimited supply of money that had no effect on the District.
    • She stated that there is always a balance between protecting the injured employee and educating the employee that the payouts come directly from the District and could adversely affect future salary increases or even the procurement of equipment.
    • She inquired as to whether there was a campaign to educate the employees to understand that the District is self-insured and that these kinds of claims are paid with the District’s reserves, not with federal or state funds. In response, Mr. Stafford stated that he conducts regular safety committee meetings to share the WC Program’s successes and challenges. He acknowledged the importance of educating employees about cost savings in workers’ compensation training programs.

Action by the Board – None Required

     
2.

Presentation from the Deputy General Manager/Administration and Development Relative to the District Division’s FY 07/08 Goals and Workplans

Deputy General Manager/Administration and Development Teri Mantony provided an overview of the of the Administration and Development Division’s accomplishments, workplans and goals, stating that the Division encompasses a very broad spectrum of departments, including Planning; Marketing and Communications; Customer Service/Customer Relations; Information Systems; Environmental Health, Safety and Risk Management; Disadvantaged Business Enterprise (DBE)/Affirmative Action and Employee Relations Programs; Human Resources; and, Training and Development. Ms. Mantony noted that the Administration and Development Division works with all of the District’s divisions and actually there are ties and partnerships with nearly all aspects of the District’s work.

Ms. Mantony described the work of the Planning Department, highlighting the following aspects:

  1. TransLink® (TransLink), which has been in the planning phase since 1995, has finally reached the point of implementation and staff is ready to relinquish the responsibility to the operations divisions. In addition, the District-wide training on the system has been completed, to provide customer support to new users of TransLink.
  2. Advanced Communication Information System, was spearheaded by the Planning Department, who advanced this project through the design phase. Now that the project is ready for implementation, staff will be transitioning the project to a new staff person in the Bridge Division, who will assume responsibility for the project.
  3. Customer Transit Survey, which has not been undertaken at the District since 1985, will survey onboard passengers to ascertain needs, perform outreach for potential riders, as well as find out why some people do not take transit.

Ms. Mantony described the projects in the Marketing and Communications Department, highlighting the following aspects:

  1. Web Site, which is critical to the District’s operations, has had 2.6 million hits in the last year, including 32 percent General Information, 27 percent Bridge related, 28 percent Ferry related and 13 percent Bus related. She noted that on-line sales reached over $600,000, which included 86 percent for ticket books and 14 percent for Bridge-related gifts and memorabilia.
  2. Employee Intranet, a new computer-based system providing a key way to communicate with District employees, including policy development, general information and access to forms.
  3. Global Information Systems (GIS) Mapping Project, a joint effort with the Metropolitan Transportation Commission (MTC), has expedited the preparation of the system map, and the District no longer has to rely on the expertise of cartographers and external sources to update this important component of customer information.

Ms. Mantony described the services provided in the Customer Service/Customer Relations Department, highlighting the following aspects:

  1. Customer Service Center, where employees receive approximately 13,000 monthly telephone calls from customers with comments/concerns regarding service or with questions that are Golden Gate Transit (GGT) Route-specific. She stated that, since the Transit Service Reduction in December 2003, GGT Routes are more complex and can be confusing to passengers because transfers are common and fewer direct routes are available. She noted that the average length of telephone calls is now longer than they were previously.
  2. Toll Rate for Persons with Disabilities (TRPD) program, which allows discounted toll at the Golden Gate Bridge for persons with disabilities who could not use public transit due to their condition, underwent a re-issuance of new cards for the approximate 1,100 qualifying candidates in order to accommodate the new FasTrak® technology upgrade. She noted that more than half of the customer applications on record have been purged from the District’s system due to the requirement for more detailed disability certification, to assure that the cardholders were not able to use public transit or due to cardholders that are no longer in the area.

Ms. Mantony described how the Information Systems Department affects all divisions and highlighted the following:

  1. Integrated Fund Accounting System (IFAS), which runs the District’s financial, human resources and payroll systems, continues to be a high priority for the department. Ms. Mantony stated that approximately one fourth of all Help Desk requests are tied to IFAS applications. She noted that the servers for IFAS (and the Maintenance Management Information System when it comes on Board) will be managed offsite, the first time the District has tried this approach.
  2. E-mail Retention Policy, will examine District e-mail use and determine inefficiencies to curtail the capacity on the global network.

Ms. Mantony stated that the Disadvantaged Business Enterprise (DBE) program was particularly important to construction and engineering contracts. Ms. Mantony also stated that the State of California’s Department of Transportation recently completed a disparity study, and it was determined that women and minority-owned businesses have been underutilized in contracting opportunities. She noted that the District, along with other Bay Area agencies who have DBE programs, will partner to identify strategies to give women and minority-owned businesses more opportunities.

Ms. Mantony described how many functions in the Human Resources Department are in the process of being re-engineered, particularly in light of trying to automate existing labor intensive, manual systems. Ms. Mantony stated that the recruitment area is very active right now. She noted that, last year, there were 75 positions filled with approximately one third coming from internal lateral moves or promotions, one third temporary and provisional staffing needs, and one third new hires recruited externally.

Ms. Mantony described the ongoing and comprehensive training programs offered in the last year and highlighted a couple of new approaches that are being tried with this year’s offerings:

  1. E-Learning, will be used to conduct the sexual harassment training required every two years, as mandated by state law. Ms. Mantony stated that the training will be available online and can be taken at the employee’s own pace and timetable as long as it is completed by the end of December. She described the computer learning center located in the administration building in San Rafael, which is used for employee computer training.
  2. Conflict Resolution, with the goal is to give the individual employee the confidence to resolve conflicts in the workplace, before reaching out to the Human Resources Department. Ms. Mantony stated that training sessions will begin fall 2007 and will be composed of a multi-part training program. She also stated that the first will be offered in fall 2007, with an advanced course offered spring 2008. She noted that employees will be invited to a brown bag session in between the two classes to compare notes and discuss what they have learned and how they are using the techniques taught.

In conclusion, Ms. Mantony emphasized that the Administration and Development includes hard-working professionals who take pride in their work and are busy with many ongoing projects.

Discussion ensued, including the following:

  • Director Middlebrook commended staff on the progress that has been made in regards to training and development. She noted that the opportunities that have been given to employees has been phenomenal and makes the District a stronger and healthier organization. In response, Ms. Mantony stated that the staff in the Administration and Development Division appreciates the opportunity to train employees to have confidence and the skill sets to perform the work at hand, particularly in light of the significant changes in the organization.

Action by the Board – None Required

     
3.

Public Comment

There was no public comment.

     
4.

Adjournment

All business having been concluded, the meeting was adjourned at 10:05 a.m.

     

 

Respectfully submitted,

/s/ J. Dietrich Stroeh, Chair
Finance-Auditing Committee