Transit Agency’s Revolving Door Costs Big, Causes Turmoil
Friday, May 3, 2013
The turnover among upper management at the North County Transit District has cost hundreds of thousands of dollars and has, at times, put riders at risk. inewsource calculated that 21 of the agency's top 25 positions have turned over since 2009 when Executive Director Matthew Tucker arrived. Some of the positions revolved as many as five times in three years.
The exodus took its toll — in dollars alone. Within three years, Tucker paid out more than a quarter-million dollars in severance payments among just 10 of those managers, many of whom he laid off. He then paid recruiters to replace them.
The constant change in management has caused problems with communication, and as one former employee said in her resignation letter, it has lead to "a vacuum" of knowledge within the agency.
In September of 2012, Angela Miller -- who was in charge of information technology for North County Transit District -- had finally had enough.
Miller had been named one of Computerworld’s “Premier 100 Information Technology Leaders for 2012,” and through her five years with the agency, she had helped deliver positive press, grants, and industry recognition to North County.
She saved the district $1 million in energy costs through solar projects, built the transit industry’s first “Green Data Center,” and launched the COASTER’s wireless internet and electronic ticketing systems.
In resigning, Miller said she felt she had no choice. The district was in peril.
“I must convey how disappointed I am in the circumstances that led to my departure,” she wrote in a confidential email sent anonymously to inewsource. “The critical reason for choosing this path is that I believe the NCTD is now at risk and that I could no longer support its direction.”
Miller wouldn’t go on the record, but in her resignation letter, she blamed management turnover for “instability, lack of transit experience, a vacuum of basic understanding of federal requirements, dissention and contention among colleagues, and disruption to the organization...
“I have been vocal to the internal organization about safety and security risks I believe now face the agency as a direct result of this attrition. Eventually, mistakes will be made.”
Twenty-one of the top 25 senior level employees have left NCTD since Matthew Tucker, once head of transportation for the state of Virginia, took over as CEO in 2009. Some, like Miller, left on their own. Many others were laid off but then replaced with employees who would be laid off and replaced again.
It’s a given in business that losing employees and having to replace them is a costly proposition. There are cash payments for such items as severance and accrued vacation, not to mention the loss of experience and familiarity with the workplace and processes. Then there is the search for qualified replacements, the interviews, the vetting and finally the hiring and training.
Tucker explained the whirlwind turnover at NCTD was caused by the magnitude of the changes going on inside the agency and by the budget crisis that sapped NCTD of needed expertise.
Following are examples of positions that have turned over at NCTD:
In three years, the district’s Manager of Human Resources turned over three times, and the current employee has no transit experience, no government experience, and no California pension experience.
The Americans with Disabilities Act Administrator had five supervisors in three years. An audit of the district’s bus service for the disabled pointed to the high turnover as the main problem plaguing the operation’s oversight.
The Chief of Transit Enforcement resigned in 2010 and was replaced by Tom Zoll. A state investigation found that Zoll’s employment agreement violated state pension rules, and both Zoll and North County had to pay fines to the state.
NCTD paid every upper-level employee who left a hefty severance, and full-pay for months after their departure as long as they remained “on-call” and signed a nondisclosure agreement.
An inewsource analysis of severance agreements shows NCTD has paid out at least $220,000 in severance lump-sums to former employees since January of 2010. That doesn’t count the “on-call” time because in most cases, those amounts are not specified in the agreements. Conservatively, based on average salaries of top managers, those payments would account for additional hundreds of thousands of dollars.
The costs of recruiting new employees also added up. Those costs could exceed half a million dollars by 2014, but Tucker defended them as necessary.
”Some of these positions, particularly rail positions, are very complex, very nuanced positions” he said.
“We do have to do specialized recruitments to identify the best and brightest talent to bring into an agency. I don’t apologize for that, because hiring the right person is the most efficient thing for the taxpayer.”
Tucker said it was “absolutely” worth the recruiting fees “to bring in well-talented, well-skilled people with the requisite knowledge and ability to perform their job.”
He was stymied, however, when asked by inewsource about spending $25,000 to recruit someone who already worked at NCTD.
Tucker: Are you sure you’re accurate?
inewsource: Yes, I have all the invoices.
inewsource: I have all the invoices.
Tucker: no response.
NCTD hired Tucker in late 2008 through the recruitment firm KL Executive Search. Since then, Tucker’s used recruiting firms extensively, paying them more than $200,000. Last July, the board gave Tucker the OK to spend $372,000 more on the services.
It’s not unusual for government agencies to use executive search firms to find upper-level managers.
But the amounts of the recruiting fees NCTD is paying are out of sync with what other local agencies are reporting.
For example, in June of 2010, Tucker paid KL $32,000 to find a Government Affairs Officer. A year and a half later, the city of San Marcos paid a firm $17,500 to find a manager to run the entire city.
San Diego’s Metropolitan Transit System — which employs about 1,300 more people than NCTD and has an operating budget nearly three times as large — spent $96,750 on recruitment services over the last four years.
At NCTD, the contract with KL was quintupled after Tucker hired his government affairs officer.
Tucker then designated himself as the contract’s project manager, and began spending:
He paid $25,000 to find a Chief Operations Officer, who ended up being an internal candidate. Tucker laid him off after seven months.
He paid $35,000 to recruit a Chief Rail Engineer, who lasted 18 months before being let go.
He paid $28,800 for the manager of Human Resources with no prior experience in transit or government.
An audit of the district’s bus service for the disabled underscored the serious effects of turnover at the top.
It was commissioned by NCTD to review the performance of American Logistics Company, the Utah business responsible for “paratransit” services for the disabled. NCTD had outsourced those transportation services, called LIFT, to American in 2011.
The audit found -- among a list of deficiencies -- that disabled passengers throughout San Diego County waited hours for buses after their workday and were dropped off hours before their employer ever opened their doors.
It pointed to management turnover as a primary reason NCTD was failing its disabled customers.
Inside the agency, the job of overseeing the contract with American Logistic was constantly changing. Five people held the position in three years. The audit said that no one even knew the location of their contractor’s local office.
In an interview Wednesday, Tucker was incredulous when told by inewsource that the audit attributed poor service to his staff’s turnover.
The revolving door of managers was evident among those responsible for the SPRINTER.
Organizational charts show the engineer responsible for maintenance on the SPRINTER worked under a constantly-changing set of supervisors who came and went under Tucker’s direction.
In 2012, Richard Berk, the engineer in charge of the Sprinter, was outranked by the Manager of Rail Services, the Senior Project Engineer, the Chief Rail Engineer, and the Chief of Rail Operations. In 2013, Berk was outranked by a different mix of titles: the Manager of Rail Services, the Chief of Rail Operations, the Deputy Chief Operations Officer, and the Chief Operations Officer.
Berk quit on March 1, a week before Tucker made the announcement that the SPRINTER would be shut down for months.
inewsource reporters Ryann Grochowski and Kelly Paice contributed to this report. This article has been revised to reflect the following correction: Correction: May 3, 2013 An earlier version of this article stated the former Chief of Transit Enforcement was let go in 2010. He in fact resigned.