July 13, 2007
(For Board: August 24, 2007)

REPORT OF THE RULES, POLICY AND INDUSTRIAL
RELATIONS COMMITTEE/COMMITTEE OF THE WHOLE

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

Honorable Members:

A meeting of the Rules, Policy and Industrial Relations Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Friday, July 13, 2007, at 9:15 a.m., Chair Pahre presiding.

Committee Members Present (9): Chair Pahre; Vice Chair Hernández; Directors Grosboll, Martini, McGlashan, McGoldrick, Newhouse Segal and Sandoval; President Moylan (Ex Officio)
Committee Members Absent (0): None
Other Directors Present (6): Directors Boro, Cochran, Eddie, Kerns, Middlebrook and Stroeh

Committee of the Whole Members Present (15): Directors Cochran, Eddie, Grosboll, Hernández, Kerns, Martini, McGlashan, McGoldrick, Middlebrook, Newhouse Segal, Pahre, Sandoval and Stroeh; First Vice President Boro; President Moylan
Committee of the Whole Members Absent (4): Directors Brown, Dufty and Reilly; Second Vice President Ammiano

Staff Present: General Manager Celia G. Kupersmith; District Engineer Denis J. Mulligan; Auditor-Controller Joseph M. Wire; Secretary of the District Janet S. Tarantino; Attorney David J. Miller; Deputy General Manager/Bridge Division Kary H. Witt; 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; Public Affairs Director Mary C. Currie; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Patsy Whala

Visitors Present: None

 

       
1.

Approve Amendments to the Human Resources Guide Relative to the Four Deputy General Manager Positions

In a memorandum to Committee, General Manager Celia Kupersmith reported on staff’s recommendation to approve amendments to the Human Resources Guide relative to the four Deputy General Manager positions (Bridge, Bus, Ferry and Administration), to include the following provisions: 1) Create a performance excellence reward system that allows for bonus compensation; 2) Create an executive management tier retiree benefits program; 3) Approve an accelerated vacation accrual rate, upon employment; 4) Allow selection among all medical benefit plans offered; and, 5) Increase the annual salary by a one-time amount to assist in achieving market parity for comparable executive management level positions in peer agencies. The report noted that the Deputy General Managers, along with the District Officers whose employment conditions are addressed separately by the Board of Directors by means of employment contracts, constitute the executive management staff.

The report stated that, over the past several years, the District has seen a substantial change in the makeup of its executive management staff, resulting in substantially improved productivity and teamwork. The General Manager has determined that it would be advantageous to develop a competitive compensation package in an effort to both recruit and retain this excellent executive level staff. The Human Resources department has performed surveys of peer agencies to both determine the components of their executive compensation packages, as well as identify the differences with the District’s current system. The survey work revealed that the District’s current system of paying only an annual salary is significantly below what these executive staff would earn in other organizations. In order to be competitive in the marketplace and retain excellent staff once they are on board with the District, it is critical that additional components be added to the Deputy General Manager positions’ compensation package. These components are described in detail in the staff report.

The report also stated that the fiscal impact of the increase in annual salary in the first year would cost approximately $32,200 and the potential bonuses could cost approximately $34,000, if all four positions received the maximum bonus amount. There is a minimal cost associated with the approval of the accelerated vacation accrual rate, as the 40-day vacation accrual cap limits the ultimate liability of the organization. Similar to the way compensation changes for District Officer positions are handled, funding for these expenses will be found within each year’s budget as general savings accrue over the 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, Celia Kupersmith summarized the staff report, stating that the executive management staff, comprised of District Officers and Deputy General Managers, has evolved over the past several years. Ms. Kupersmith noted that the responsibilities of the Deputy General Managers mirror those of the District Officers, and that the entire executive management staff performs quality work, is committed to the organization, and is hardworking, innovative, flexible and responsive.


Discussion ensued, including the following:

  • Director Sandoval made the following comments and inquiries:
    • He inquired as to the impact that the proposed changes would have on the FY 07/08 budget. In response, Ms. Kupersmith stated that the proposed changes for the Deputy General Managers were not included in the FY 07/08 budget process. She noted that monies will be recovered through the operating expenses in the base line of the budget and with savings that accrue throughout the fiscal year.
    • He commented that, albeit the Deputy General Managers may be deserving of the compensation, the proposed changes will make it difficult to balance the FY 07/08 budget without a new source of revenue, such as a toll increase, and he inquired as to the reason why the changes were not included in the discussions during the budget process. In response, Ms. Kupersmith stated that since the item concerning Deputy General Managers’ compensation represents a significant policy issue and warrants discussion, she was directed by the Advisory Committee for Review of Officers of the District to present this item to the Rules, Policy and Industrial Relations Committee (Rules Committee) outside of the budget process.
    • He commented that, in his opinion, the Board should consider issuing a moratorium for any recommendation that impacts the budget, in light of a future possibility of a toll increase.
  • Director Middlebrook expressed her support for the recommendation being presented by the General Manager, stating that the Board has discussed this proposal over the past several years. She commented that this matter recognizes the value of the executive management staff, and puts the District in a better position to recruit candidates when vacancies arise.
  • Director Boro made the following comments and inquiries:
    • He expressed his support for the General Manager’s recommendation, describing the ways in which the Deputy General Managers have taken on more responsibility in addressing the global responsibilities of the District. He also described the efficient and effective role the Deputy General Managers have played in matters that are presented to the Board. Finally, he is pleased with the exceptional teamwork that is taking place with the members of the executive management staff.
    • He commented that when Deputy General Manager positions become available, the District will be in a better position to recruit highly qualified individuals for these positions if the proposed changes are implemented.
  • Director Grosboll expressed his support for the recommendation, commending staff for their exemplary work. He inquired as to whether the medical benefits for retirees will be the same as those for other District employees. In response, Ms. Kupersmith stated that, as with any District retiree that is age 55 or older, the retiree will be responsible for a portion of the payment, along with any co-payments. She noted that if the retiree becomes gainfully employed with benefits at another organization, those medical benefits would become primary and the District’s retiree medical benefits would become secondary.
  • Director Cochran made the following comments and inquiries:
    • He inquired as to whether there is a limit on the number of sick days that the Deputy General Managers can accrue. In response, Ms. Kupersmith stated that there is no limit on the number of sick days that any District employee can accrue. Ms. Kupersmith noted that there is a limit on the amount of vacation days that can be accrued.
    • He inquired as to whether the original recommendation included a provision with a set dollar amount when referring to the bonus, rather than a percentage of the base annual salary. In response, Ms. Kupersmith stated that, based on the research for this recommendation, a percentage amount would be more effective because tying an increase to each respective salary would recognize the salary standing within the organization. She noted that since the Deputy General Managers do not make the same salary, the potential incentive compensation should not be the same.
    • He expressed his concerns that the recommendation would place the Deputy General Managers in a position to receive higher bonuses than the District Officers. In response, Ms. Kupersmith stated that, historically, District Officers have a different compensation package. She noted that the Deputy General Managers will not automatically receive bonus compensation, but that any bonus must be earned.
  • Director Stroeh expressed his support for the recommendation, stating that a bonus incentive program is an appropriate way to recognize excellent performance.
  • Director Hernández made the following comments and inquiries:
    • She expressed her support for the recommendation, stating that the Deputy General Managers perform above and beyond the call of duty and provide outstanding work for the District.
    • She emphasized that the District is successful, not only because of the work of the Officers and Deputy General Managers, but also because of the work of the hundreds of other District employees and that all of the employees need to be recognized for each part that they play to ensure the success of the District’s operations.
    • She noted that, as a result of labor negotiations, some bargaining units had to sacrifice certain benefits.
    • She further noted that the Board needs to recognize what all the employees of the District receive in terms of compensation and benefits.
    • She commended Manager of Organization Development Lori Fromm for providing the background information and the surveys relative to this recommendation.
  • Director Eddie expressed his support for the recommendation, commenting that if the District does not maintain a compensatory package that is up-to-date for the region, the District may lose the advantage of hiring qualified candidates when filling vacancies for executive management staff. He expressed his concerns regarding hiring a new manager at a higher pay rate than the one paid to the predecessor; another reason why it is important to stay competitive with comparable positions around the region.

Staff recommended, and the Committee concurred by motion made and seconded by Directors MOYLAN/GROSBOLL to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Rules, Policy and Industrial Relations Committee recommends that the Board of Directors approve the following provisions relative to the four Deputy General Manager positions (Bridge, Bus, Ferry, and Administration/Development) which, along with the District officers whose employment conditions are addressed separately by the Board of Directors by means of employment contracts, constitute the executive management staff of the District:

  a.
Create a performance excellence reward system for the Deputy General Manager positions that allows the General Manager to provide incentive compensation of up to 5 percent of their annual base salary, per year, to each Deputy General Manager based on the Deputy General Manager’s performance excellence, such reviews to take place in the fall of each year, separate and apart from general salary adjustments made for all non-represented staff which includes Deputy General Managers, with the understanding that these funds would be paid on a bi-weekly basis over the next 12 months and available for contribution to deferred compensation, and with the further understanding that the incentive compensation would be considered part of the employee’s annual salary for purposes of PERS calculations, but would not be included in any future year wage increase calculations;
  b.
Create an executive management tier within the District’s retiree benefits program in which Deputy General Managers are eligible for full retirement benefits, including survivor benefits, based on the following vesting schedule:
    1.
At age 55, with at least five years of service as a Deputy General Manager, individuals are eligible for retiree medical benefit coverage at the maximum level for themselves and can purchase, at COBRA-equivalent prices, coverage at the maximum level for themselves and their spouse/domestic partner/dependents;
    2.
At age 55, with at least ten years of service as a Deputy General Manager, individuals are eligible for full retiree medical benefit coverage at the maximum level for themselves and their spouse/domestic partner/dependents;
    3.
Self purchase of retiree medical benefits for the individual and any dependents would also be allowed after three years of service; and,
    4.
Upon retirement with at least five years of service in the Deputy General Manager position, individuals are eligible to receive a cash payment for 50 percent of accrued sick leave;
  c.

Upon employment as a Deputy General Manager, approve a vacation accrual rate of 30 days vacation annually, subject to the District’s 40-day maximum accrual at any one time;

  d.
Upon employment as a Deputy General Manager, allow the individual to select one of the medical benefit plans amongst both the HMO and PPO offered by the District, rather than remain in an HMO plan for three Open Enrollment periods following hire;
  e.
Increase the annual salary of each Deputy General Manager at a one-time amount equal to five percent of each of the Deputy General Manager’s annual wages in an effort to achieve market parity for comparable executive management level positions in peer agencies, to better reflect the significant growth in job responsibilities that has occurred over the past several years, and to be able to competitively recruit for future Deputy General Manager openings; and,
  f.

Amend the Human Resources Guide accordingly.

Action by the Board - Resolution
NON-CONSENT CALENDAR

       
2.

Approve a Separate Policy Regarding Leave Under the California Family Rights Act

In a memorandum to Committee, Deputy General Manager/Administration and Development Teri Mantony and General Manager Celia Kupersmith provided staff’s recommendation to approve a separate policy relative to the State of California Family Rights Act (CFRA) and amend the Human Resources Guide accordingly.

The report stated that the Board of Directors, by Resolution No. 2002-033 at its meeting of February 22, 2002, approved various policies relative to Leaves of Absence, including mandated leaves under the federal Family and Medical Leave Act (FMLA), the CFRA, and the State of California Pregnancy Disability Act (PDL), as well as the District-approved policies for medical, personal and catastrophic leaves. Recently, staff has reviewed and revised these related policies solely for purposes of clarification regarding how the coordination and integration works. During this review, it was decided that a separate policy relative to the CFRA should be developed and brought to the Board for approval. Although the policy follows the law, Board approval is being requested since this is the first time a stand-alone policy has been written. The specific components of the CFRA are described in detail in the staff report.

The report also stated that employees also have access to Personal Leave under District policy for purposes of caring for family members and domestic partners in certain circumstances, once their FMLA/CFRA benefits have been exhausted. District staff has met with representatives from the Union Coalition and the Amalgamated Transit Union to review this separate policy for CFRA, as well as to review the clarifications to other related leave policies. The unions have concurred with bringing this new policy forward for Board approval. A copy of the report is available in the Office of the District Secretary and on the District’s web site.

Staff recommended, and the Committee concurred by motion made and seconded by Directors BORO/MARTINI to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Rules, Policy and Industrial Relations Committee recommends that the Board of Directors approve a separate policy relative to the California Family Rights Act, as outlined in Attachment A, and amend the Human Resources Guide accordingly.

Action by the Board - Resolution
NON-CONSENT CALENDAR

AYES (15): Directors Cochran, Eddie, Grosboll, Hernández, Kerns, Martini, McGlashan, McGoldrick, Middlebrook, Newhouse Segal, Pahre, Sandoval and Stroeh; First Vice President Boro; President Moylan
NOES (0): None

       
3.

Public Comment

There was no public comment.

       
4.

Adjournment

All business having been concluded, the meeting was declared adjourned at 9:55 a.m.

       

 

Respectfully submitted,
/s/ Barbara L. Pahre, Chair
Rules, Policy and Industrial Relations Committee

 

Attachment: California Family Rights Act (CFRA) New Policy Approved July 2007