A former North County Transit District official who said she was passed over for a high-ranking position in favor of a less-qualified, younger black man is suing the district, alleging that racial, gender and age discrimination are prevalent in hiring practices under Executive Director Matt Tucker.
Kim Stone, the district’s former manager of bus operations, claims in the suit that Tucker, who is black, hired Alex Wiggins — who later became second in command at the transit district — instead of Stone, who is white.
Stone’s attorney, Laura Farris, said that the evidence that she has amassed over the year leading up to the lawsuit will show that Stone’s experience is not isolated.
“This certainly isn’t just about Kim Stone and Alex Wiggins,” Farris said. “Much of this will come out during discovery and as we get closer to trial, but we believe that Kim’s situation is endemic of what is happening at the transit district.”
North County Transit’s spokeswoman Deborah Castillo said the district would not comment on an active lawsuit. Wiggins, who recently took a position at the Chicago-area commuter rail agency, Metra, scoffed at the notion he was hired because he was black.
Before taking the position at North County, Wiggins was the chief of staff at the Seattle Department of Transportation, which sets transportation policies for the region.
Wiggins also served as a military policeman in the Army, a sergeant in the Seattle Police Department and as safety and security manager with Seattle Central Community College.
He also has a master’s degree in management, he said.
“I think the fairest thing to say is that I can’t comment on what I haven’t seen, but my resume speaks for itself,” Wiggins said.
Stone, a 30-year veteran of public transit agencies, including 10 with North County Transit, was one of dozens of employees whose positions were going to be outsourced when the agency contracted its bus services to a private company, First Transit.
Stone, who wanted to stay with the agency to protect her pension and benefits, applied for the position of Manager of Service Quality and Accessibility.
District officials instead hired Wiggins, who would later rapidly climb the ranks at North County, becoming the district’s chief administrative officer before his departure.
Stone’s suit argues that she was more qualified than Wiggins for the position, which required experience handling Americans with Disabilities Act issues, which Stone learned that Wiggins did not have.
The lawsuit states that Stone searched Wiggins’ job description at Seattle and found it did not match the qualifications required for the North County position.
“Based upon information and belief, Mr. Wiggins qualifications for the position were not even close to plaintiff’s qualifications for the same,” the lawsuit states.
The lawsuit does not list an amount Stone is suing for.
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LEAH HARNACK for Mass Transit publicationsHere's some additional information about N.C.T.D CEO Matthew Tucker. Mr. Tucker himself didn’t know about the agency until a phone call from a recruiter telling him of a job opening. “I never heard of it,” he laughs. And to the recruiter he asked, “What do they do?When he heard about all the NCTD had going on and after he came to see it first hand, he thought it was the place for him.
With a young family — a daughter that’s 8 and a son that’s 6 — and a work-family balance that had been out of whack, the NCTD offered unique challenges and the right balance."
Oceanside is a quiet military town, with the Marines in town on the weekends. As Tucker says with a laugh, if you’re looking to go downtown, you’re going to downtown San Diego.
But this place with a small-town feel is a regional transportation hub with connecting rail service to San Diego, LA’s Metrolink and Amtrak.
Tucker came to the NCTD in December of 2008, previously serving as the director of the Virginia Department of Railway and Public Transportation, working for the governor of Virginia. A native Virginian, he went to school in Richmond, was in the ROTC and served his military obligation and when he returned from that, it was a down cycle in the economy and, he says, “I couldn’t find the types of jobs that we all hope for after we spend all that money and take out those student loans.”
Like many others, Tucker started at ATE. He started as a finance intern and continued to advance in the company and in the industry.
He spent two-and-a-half years at the Virginia Department of Rail and Public Transit. “The challenges are really, really big,” he stresses. “You’re working really 24/7.
“We had one of the biggest projects in the history of the commonwealth, which was the Dulles Rail Extension.” He continues, “During that time period I was there, you’ll remember a little discussion about the tunnel going underground; I was the poor guy that was having to work through all of those issues.
“It was probably the most challenging job that one could ever think of, but it was probably the most rewarding in terms of just really giving you experience and insight in to how transportation really comes together in a really multi-modal way.”
During the interview process with the board of the NCTD, it was laid out that the system faced some significant financial challenges. They were looking at a deficit that was approaching about 80 million dollars over a five-year period.
“What was clear to me was that we sort of had a shared philosophy of saying, OK, let’s think about this in the context of a business and let facts and analysis drive our decision and business-making process,” Tucker says.
“When we started looking at the different things we could do, you could drop off service levels probably 30 to 50 percent and you would still have a financial problem,” he stresses. “So what does that mean? That means that you have massive layoffs and massive service cuts and still be in a terrible way. I don’t see how that benefits anybody.”
There are a lot of questions in our industry about funding, profitability to grow systems, business cost models, the fluctuation of funding and service levels and as a result, Tucker says, “The public is sort of left with the viewpoint that it’s a difficult to transition to make to transit because they don’t know if the service level is going to be here today and then gone tomorrow.”
The decisions they’ve made at the NCTD Tucker says are significant policy matters and from their viewpoint, the best solution for their agency.
“There are lots of different answers dependent upon which community that you live in,” Tucker says.
The decision for the NCTD to privatize was the best solution for them. “This was not about a political issue,” says Tucker, “because so much of this decision-making process about whether you should be privatizing or not, people try to put it in to a political context and actually it’s not.
“If you operate under the premise that we exist to provide a service to customers and that really all of our resources are about providing services to customers, that gives you a business framework for you to operate.”
He says, “If you agree with that as your first premise, then you also have to balance that with the fact that in order to deliver that service, you have to have good people.” He continues, “You have to balance those two issues, that they’re not competing. “
As they went through the analysis process, Tucker says they had to be pragmatic and put everything on the table. “We started to look at if you reduce wages and benefits, can you get there? We couldn’t get there.
“We looked at various models of contracting out partially or total. When you look at the size of our bus system, partially doesn’t really get us there,” he says.
“When you look at the whole system, you’re like wow, that doesn’t solve the problem, but it’s part of a series of steps that we can take to get to a point of achieving financial stability.”
As Tucker explains, they didn’t hide anything and they weren’t shy about it. Meeting with employees more than once a month, he shared budget outlooks, he gave them spreadsheets. “I said to folks, ‘Here’s a suggestion box. If you come up with an idea better than the ideas I have, let us know about it.’
“We worked with the union; we actually negotiated an agreement with the wages and to discuss outsourcing.” He says, “You know, sometimes people get confused and they think we actually imposed. No, we negotiated with the union.”
Tucker says, “No one debated that we didn’t have a financial problem because you had the state eliminating state transit assistance that typically had been like $10.5 million to us. Some years it was a lot less, like $5 million, but there’s a certainty about zero.” He also adds that the sales tax was supposed to have been about $52 million, but they actually got $37 million.
With the deficit they were facing, they decided it was best to move forward with contracting out. They had completed all of the analysis, it was presented to the board in an open public meeting where the employees could come in and comment.
“Quite frankly there were no secrets because I had been out briefing the employees and the board gave us authorization to release an RFP and we had given them an estimate of what we thought we could save,” Tucker says.
The RFP came back and there was a contract proposal from First Transit for the first seven years of the contract. “We saved about $53 million a year,” says Tucker. And the other side of the equation he says, it allowed them to maintain current service levels.
Tucker explains how the employees were transitioned. “For our senior employees that have been here they were able to retire from our system. The agreement that was worked out with First Transit is that senior employees got 95 percent of their pay. So that means an employee with 20 years of service is getting 95 percent of his pay from the private sector.
“I would probably argue for people that this is the best thing that could happen and use the last five to 10 years of work life to be able to accrue that kind of savings.
“For our junior employees, 19 years or less, they will take 85 percent of their wages and that was something that the union negotiated because we had developed an agreement based on an agreement that was basically 10 percent off the top for everyone.”
He says to some degree that was sort of negated by the fact they were paying 8 percent into the pension plan, so the real nominal impact was 7 percent immediately for those employees.
“We did a separation bonus for every employee of $5,000 now and for senior employees they got $8,500,” Tucker explains. “When it gets to July of next year, they get a 5 percent increase so they’re real take-home impact will be less than 2 percent."
“As I’ve said to them over and over again, one of the key things is that as an individual, you always have to act in your best interest. As the economy improves, obviously we realize there are going to be wage pressures. Of course transit is going to have to manage that but right now what we’ve done is we’ve given you the capability of continuing to make money while all of us are going through a pretty difficult time.”
It used to be about 41 percent of the employees were contracted. By fiscal year 2012, about 88 percent of the workforce will be contracted.
Paratransit is one area where agencies are struggling with managing high costs and the NCTD was no different. “If you remember when the mandate came out in 1991/1992, when we were implementing, all of us looked at the business model that we sort of knew,” Tucker explains. “That was a business model where we did something in a facility that we owned under the right rules that we had and when you look at ADA service for all of us, you have one side, you have the regulations that say we’re going to limit how much you can actually assess to recover costs.
“If you look at most transit systems, typically less than one half of one person of your total ridership is going to ADA but 10 percent of your total costs is going to paratransit,” he stresses.
He continues, “This is an important service, that’s the bottom line. I tell people heck, one day I may need that service. But we have to think about how can we cost-effectively provide that service and I would argue that our business model as mass transit providers, it doesn’t really fit that kind of model.”
One of the things that attracted Tucker about coming to the NCTD was the board allowing him to think out of the box as long as they were going to do their homework and be very deliberate about where the process took them.
Spending in the high 30s for each of those trips, with the average trip being about 9 miles, it was something that needed a change.
When you look at the private sector in terms of taxi cabs and all of the other transportation providers, Tucker says, they’re sitting out there with a ton of capacity and would love to be able to say they can book 80 percent of their day with guaranteed revenue. So the NCTD contracted its paratransit service with American Logistics Company, who leverages a fleet of dedicated and non-dedicated vehicles coordinated under one management to deliver efficient service. Real-time route optimization algorithms are used to determine the best vehicle utilization with flexible resources available to meet the varying service requirements.
“I think all of us have to look at where we are as an industry and really think about where we’re going in the future,” Tucker says. “The American Logistics [Company] contract in ADA service is something all of us in the industry really have to think long and hard about it.
“The ALC model, you know, we look at a brokerage model that’s not being implemented, where by we would get out of the whole business of having to own infrastructure, having to come to the table with the traditional work rules.” He continues, “The traditional work rules, where you’re paying when the driver is not being productive ... you’re going out and coming back and you’re not making any money.”
He says, “What we’ve done is develop a business model where the only time we’re paying is when we have a fanny in the seat and if we can group fannies in the seat, we’re paying the cost of that one move.”
The NCTD had put out a performance-based specification where it didn’t dictate and tell people how the work was to be performed, it requested the most efficient and effective way to provide the work.
“We’ll work to develop some performance metrics, of course,” Tucker says. “You’ve got to have the penalties and opportunities for reward if you exceed or meet performance goals.” And with the ALC model, he says they saw close to a 30 percent reduction on the cost per trip and that they didn’t have a lot of risk in terms of fuel.
Tucker says he’s been asked about the impact of having so much of their service contracted out. “My answer is straight forward. I’ve been in public sector agencies that are directly operated that did not operate so well. I’ve seen private sector operations that did not operate so well.
“Well the basis when I got here and looked at the workforce that we had and quality of service, I tell people I stacked us up with anybody in the country.” He continues, “The employees, the direct employees for the NCTD are also performing work, just working for First Transit today.”
At the same time, it was built within the contract framework for evaluation, evaluating success and failure. “We are very involved. In fact, I get on my pager instant messaging anytime a bus is late or not pulling out,” he says.
“At the end of the day, I don’t view the decision to contract out or operate directly to mean really a change in business model. Here’s the thing,” he continues, “if you hold yourself to a certain standard when you directly operated, great. If you contract out, you hold the same standard.
“But if you contract it out and say you want to hold the contractor to this high standard when I held myself to a standard below here, then you sort of have a mismatch.”
He stresses the key is identifying a standard, holding folks accountable to that standard and being consistent about that standard. He also adds that he believes all of us need room to make mistakes from time to time, but we have to learn and grow from those mistakes.
“Over time, if you demonstrate you can’t do the work, I’m perfectly comfortable with the notion of finding somebody who can. That’s the process,” he asserts.
Tucker says, “At the end of the day, I think managers, general managers, we get too much credit when our organization does well and probably get too much blame when things don’t go well because the hard core of the work is being performed by those bus operators and those fleet and facility personnel.
“If you have good organizational culture and people with high sets of values that are committed to customers, I can argue that the transit system canfunction pretty well. It may not reach all its strategic plateaus that we would like to see, but the heart and core, don’t ever be confused, are those folks that are turning those wrenches and operating that bus.”
Tucker says they have been thinking about how those different business models could be expanded to other areas of their services. The service area of the NCTD is about 800 thousand square miles, including rural areas where they’re trying to connect to the core.
Tucker says, “To connect with fixed-route service, you’re spending a lot of money. When you use up your resources and try to give everyone service, you’re making the service poorer for everybody.
“The belief that if you want transit service, you live where the core of services can be provided in an efficient and effective manner. If you decide you want to live outside of the core, we should not reward that higher cost, that increased difficulty in providing service at a rate that is the same for someone living in the core that we can efficiently serve.”
They’re developing business models that will allow them to apportion a greater deal of their cost and reduce their risk exposure by transferring responsibilities to the customers who have chosen to live outside the network, but still providing the mobility options to connections to the core of the system.
“That’s not done by scheduling a 40-foot bus riding out there and hoping that there will be people to pick up,” Tucker says. “It’s by developing services that give people a little more control; when they want services, they can get services. But they are going to have to pay more for those services.
“We’re advancing right now a proposal that says the maximum subsidy that we’re going to pay is $3,” he says. “Today, we subsidize trips to these rural areas at a significantly higher level. It’s going to mean for customers that rather than paying a buck or a buck-75, you may be paying $10, you may be paying $14.
“It’s significantly more, but still, if you look at the value of that service that we’re providing, compared to if you had to own your own car or if you decide to get a taxi cab, it’s significantly less.”
Growing Business
Step one was getting over the financial hurdle and step two is focusing on ridership and revenue increases and positioning themselves and designing their service to really maximize the services they’ve got.
Tucker says it’s shocking with all of the work that transit does, working so hard, but we as an industry keep coming up with ideas that reflect the thought process that the world is about us when the world is really about the community that we serve and how we can incorporate so that transit is seen as a resource to provide the mobility options and to support economic development.
“We spend so much money on marketing that is inside curveball marketing, only to us; we’re the only ones that get it,” Tucker says. “Ridership growth and development isn’t hand-to-hand combat, it’s relationships.
“You have to put boots on the ground and you have to start with where are my best opportunities?”
And when it comes to building relationships, the NCTD also has to work at relationships with the different transportation providers they cross service areas with. “It’s always funny because depending on who you talk to, it’s always the other guy,” Tucker says laughing.
“I think as we continue to talk and learn more about each other’s perspectives and how we operate, it opens up more opportunities for collaboration.”
One of the key issues when he came to the NCTD he says, was how well they collaborated and worked with the cities in their service area. “I find a little bit disheartening when you hear the whole ‘them and us’ type thing. ‘Us’ is ‘them’ and ‘them’ is ‘us’ to the degree that when we’re doing well, then you’re doing well and vice versa.
“It’s something that we’ve tried to work hard on, and we’ve made some significant progress with our cities to foster a notion of greater collaboration. This was something that was started even before I got here.”
When talking to Tucker, he is confident in the decisions that have been made at the NCTD because of the background analysis that was done prior to making any decisions and because the agency is moving forward, as opposed to digging further in debt.
It was good to run into him a few months after the initial interview to hear firsthand about honors they’ve received validating what they’ve done.
The San Diego County Taxpayers Association (SDCTA) awarded the NCTD the Grand Golden Watchdog Award, the highest award presented during the ceremony, for the agency’s commitment to sound fiscal decision making.
NCTD chair Chris Orlando said, “By transitioning bus operations to First Transit and paratransit service to American Logistics Company, we are on track to save San Diego taxpayers in excess of $50 million over the next seven years.” He added, “Today, the district’s budget is balanced. We’ve added service, reduced fares and increased ridership.”
The current financial results of NCTD's outsourcing with First Transit
Outsourcing bus operations at the North County Transit District has saved taxpayers millions of dollars a year, but not the $10 million transit officials projected when they approved the change in 2009.
The district released a statement last week that said it believes outsourcing to private operator First Transit saved the district about $4.9 million in the program's first year.
That figure doesn't appear on any line in the district's 2011 audit -- year-over-year spending shows a savings of only $2.6 million -- but officials said it is derived when one takes into account that district expenses were increasing at a rate of 7 percent a year under the previous system.
Matthew Tucker, the transit district's chief executive officer, said Tuesday that the $10 million figure was an eventual goal but was never expected to materialize in the first year of outsourcing.
"During those earlier years, you don't get those savings that you would get once you're in a steady state," Tucker said.
In November 2009, the transit board approved a seven-year, $179 million contract with First Transit. The move shifted about 325 bus workers who had been employed by the district over to the Cincinnati-based company.
"We are saving $10 million a year for the taxpayers," transit director and Escondido Mayor Sam Abed had said just before the vote.
While that $10 million figure might be true at some point in the future, it isn't yet.
The breakdown
A glance at the "bus operations" line of the district's 2011 audit shows that the NCTD spent $39.5 million on bus operations in 2011 compared with $42.1 million in 2010.
That's a year-to-year spending decrease of $2.6 million.
And that amount of savings includes one footnote: District buses drove about 15,000 fewer miles in the 2010-11 budget year than they did the year before.
Had local buses driven the same number of miles in both years, the amount spent on bus operations would have only been about $1.1 million less under the outsourcing deal, which took effect July 1, 2010.
A technical report released Friday by the North County Transit District calculates the saved amount of $4.9 million based on the fact that the cost of bus operations at NCTD was increasing at an average rate of 7 percent per year before the board made the decision to hire First Transit.
The calculated savings, Tucker said in a recent meeting, include the amount that the district would have paid had it not outsourced and instead continued directly employing bus drivers and mechanics at a cost that continued to escalate at 7 percent per year.
The savings would have been greater, the analysis states, if the district had not had to pay an additional $1.7 million in "one-time costs" for workers' compensation, unemployment insurance and severance payments to bus drivers and mechanics who were affected by the outsourcing.
"Without these one-time costs of $1.7 million, NCTD savings for contracting out would have increased from $4.9 million to $6.6 million," the analysis states.
Service changes
Tucker said that while it is true that total bus miles driven declined from 2010 to 2011, the district has since added several local routes that more than make up for the mileage cuts in 2011. Tucker said he is proud of the changes and said it should be possible to continue to add service in the future.
"When I look at total, this contracting with First Transit, and all of the other activities we've taken, absolutely it's been a success," Tucker said.
But don't expect the district to bring back routes to outlying communities that were cut during transit reorganization, he said. Tucker said the district will continue to use contracted taxi or shuttle service, but those services will have to cost more than a regular bus ticket.
Matthew Tucker's current salary as CEO for NCTD
The North County Transit District's top executive received $326,985 in total compensation in 2011, a number that appears to be in line with what other transit CEOs make for running larger transit agencies in California.
The compensation figures for transit district CEO Matthew Tucker included a base salary of about $230,000 that is set to increase to $249,179 in December, his contract shows.
Tucker declined to comment on the record about his salary, however, Chris Orlando, NCTD board chairman who represents the city of San Marcos, said in an email Friday that Tucker's performance speaks for itself.
"Since the board hired Matt and approved his contract, he has led NCTD in reversing a five-year $80 million budget deficit, reshaping NCTD's business model and dramatically cutting expenses," Orlando said.
He said Tucker's leadership has produced measurable progress in several areas.
"NCTD's budget is now structurally balanced, its pension is fully funded at 103.1 percent, and its reserves, which were $0 in 2008, are now $15 million. At the same time, NCTD has increased service levels system-wide, cut fares for riders across all modes, and projects record ridership and revenue for the coming year," Orlando said.
The transit board of directors approved a contract for Tucker in May 2010 that includes regular 5 percent base salary increases every year.
On Dec. 15, the agreement automatically bumped Tucker's salary from $226,0013 to $237,313 and he is due another automatic increase on Dec. 15 of this year, according to the contract.
Base salary is not the only cost in employing the executive.
In 2011, Tucker's total compensation included a $7,200 per year car allowance, $20,000 in deferred compensation and $34,702 in pension payments. It does not include $18,471 in health benefits.
After looking at a breakdown of the numbers, Lani Lutar, chief executive officer of the San Diego Taxpayers Association, noted that the district is paying $18,971 in employer's pension contributions, as well as $15,731 for what is considered the employee's contribution.
Lutar said in an email that there is no reason why a public agency should cover the employee's share of pension payments.
"The district should require all employees, including their CEO, to make their full and fair share contribution toward their pensions," Lutar said.
Indeed the NCTD board announced at a recent board meeting that it is working toward that goal.
Starting Jan. 1 the district will begin a phased approach that will have employees, including Tucker, paying an increasingly larger portion of the cost until they reach 100 percent in three years.
Tucker's compensation is less than the amount earned by the top executive the region's other transit agency.
Paul Jablonski, chief executive officer of the San Diego Metropolitan Transit System, earns $308,173 per year in base salary and a total compensation of $429,000 per year, according to astory published Mar. 29 by U-T San Diego.
But Jablonski is responsible for a much larger operation. MTS has a $233 million operating budget, compared to only $85 million for NCTD. MTS lists 1,399 employees in its budget, compared to 100 for NCTD. The NCTD employee figure is somewhat misleading because the district outsourced hundreds of bus operations and maintenance employees in 2010.
It is difficult to find a California transit agency that perfectly compares to NCTD. Most midsize transit agencies with similar-sized operating budgets run bus service only. But NCTD also operates the Sprinter light rail line and Coaster commuter rail line.
The Sacramento Regional Transit District seems to compare somewhat closely. The agency operates both light rail and bus service and had an annual operating budget of $130 million in 2012.
Current salary figures were not available for Michael R. Wiley, the Sacramento district's CEO, but, according to the California secretary of state, the executive's total compensation, excluding health benefits, was about $190,000 in 2010.
Commentary on these stories.
Matthew O. Tucker current CEO of N.C.T.D loves to give the impression that he actually knows what he's doing. Tucker has been involved in a lawsuit since leaving Virginia transit.
When First Transit officially took over in July 2010, many senior drivers and others either retired or left the company. A teamsters 542 union contract had been voted upon in Oct 2009 in Vista at the senior center, the senior drivers still working for n.c.t.d voted for the contract without even bothering to read it first. Some drivers weren't allowed to vote on the contract, despite the fact they had worked for n.c.t.d previously. Because of that the senior drivers basically screwed all the drivers royally, there wasn't anything they could do about it. By the time the seniors actually took the time to read the contract they signed so blindly, it hit them hard at what they had actually done.
When Mr. Tucker was hired in 2009 to be CEO of n.c.t.d none of the board members had a background check done on him. Tucker had also work in Santa Clara for that cities transit department, aside from work in Virginia for another transit company. Both transit companies were ran into the ground financially speaking before he left, both companies recovered financially since Tucker left.
Mr. Tucker genuinely doesn't care about what his co-workers earn working for First Transit, especially the bus drivers, who earn under $13.00/hr, which is quite shameless considering the amount of responsibility drivers have each time they get behind the wheel. How can Tucker actually believe those specific drivers earning that much, can actually support their own families, when Tucker himself earns over $300,000 per year.
Mr. Tucker only cares about his own paycheck including the bonuses he gets. Anyone with half a brain could figure out how to run NCTD better than Tucker currently does. The deficit NCTD claims to have could easily be taken care of, were any auditor actually to perform an audit on NCTD, they would find out the same thing for themselves. There's a better way to pay the bus drivers & others a better salary while saving the company money.
It's time for Mr. Tucker to move on out, and time to fire the entire NCTD board members and replace them with people who actually care. The results of the pending lawsuit Mr. Tucker finds himself in once again, could prove very interesting as Karma has a unique payback system.
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