TO: AC Transit Board of Directors
FROM: Linda A. Nemeroff, Board Administrative Officer/District Secretary
SUBJECT: Board Policy 155
ACTION ITEM
AGENDA PLANNING REQUEST: ☒
RECOMMENDED ACTION(S):
Title
Consider approving amendments to Board Policy 155 - Travel, Meeting and Miscellaneous Expense Reimbursements for Directors and Board Officers, including an increase to the travel allotment for each individual Board member as well as the additional funds allotted to the Board President. [Requested by Vice President Shaw - 3/13/24]
Staff Contact:
Linda A. Nemeroff, Board Administrative Officer/District Secretary
Body
STRATEGIC IMPORTANCE:
Goal - Strong Public and Policymaker Support
Initiative - Service Quality
Board members can enhance their governance role by traveling for various purposes, such as learning leadership skills, exploring innovative ideas, technology and equipment, building connections with peers and other stakeholders, advocating for funding support, and showcasing the District's leadership in the transit industry. In addition, funds are used to attend numerous local events and meetings.
BUDGETARY/FISCAL IMPACT:
The budgetary impact will be an increase in each Board member’s travel allotment by $4,000 with an additional $2,000 to the funds allotted to the Board President. This would result in an overall increase of $30,000 per fiscal year in the Board’s travel budget.
BACKGROUND/RATIONALE:
Board Policy 155 was amended in 2007 to increase each Board member’s travel allotment from $7,000 to $9,000 due to inflation. Prior to that, the last increase was in 1999. There is no record of an increase in the additional funds allotted to the Board President. Public Utilities Code Section 24908 (Transit District Law) provides that, “…each director may be allowed necessary traveling and personal expenses incurred solely as a result of the performance of his or her duties, in amounts as may be authorized by the board.”
Since 2007, the cost of District-related travel has steadily increased, while the budget for travel has remained at the same level for 15 years. During this time, the cost for conference registration, accommodations, flights, meals and other travel-related expenses, including fees and taxes, have kept pace with inflation. As a result, Board members often do not have enough funds to travel to conferences and meetings they wish to attend throughout the year, and some run out of money so early that monthly expenses for travel to and from Board meetings and other local events and meetings often must be paid for out of the Board member’s pocket.
Since prior adjustments in Board member’s travel allotments were based on inflation, staff consulted the California Consumer Price Index (CPI) to develop a fair and reasonable recommendation for adjustment. Based on the CPI, inflation has increased by 47.6% since 2007, which would increase the current allotment by nearly $4,300. When applied to the amount the Board President receives, the result is an increase of $950 every six months.
Given the substantial increase in inflation and for ease in accounting, staff is recommending that each Board member’s travel allotment be increased to $13,000 from $9,000, and the Board President’s allotment be increased to $3,000 up from $2,000 every six months. In addition, staff is also requesting that the policy be amended to account for when administrative staff makes errors when booking travel/meeting arrangements that result in the loss of travel funds for a Board member. This provision would not apply in situations where inaccurate information provided a Board member causes staff’s errors.
In approving the changes recommended above, the affected sections of Board Policy 155 would be amended as follows (see bold and underlined text) and take immediate effect:
“4. Limitations
a. Reimbursement for travel and meeting expenses shall be limited to $13,000 per Director per fiscal year. A Director may not carry over any unused funds remaining from the Director’s travel allocation in one fiscal year to the next fiscal year. This limitation shall not be applicable to prepayment of conference registrations, airfare or hotel costs in the current fiscal year for travel that occurs, or is scheduled to occur, in the next fiscal year. Board members shall not receive a reduction in their travel allotment balance as a result of an error made by staff, except in those situations when the error was the result of inaccurate information provided by a Board member.
c. Board President: In addition to the limitation in Subsection a, above, the President of the Board of Directors shall be entitled to an additional $3,000 expense reimbursement during the first half of the fiscal year and $3,000 during the second half of the fiscal year. Since the Board President is elected in January of each year, this split provides for an equitable distribution of the additional sums for this position. However, if the Board President leaves office or their term as President ends, any funds remaining in their travel budget in excess of $13,000 shall be held in suspense and transfer to the next Board President when they start their term as President. This transfer of funds shall not apply to a Board member who is only temporarily serving in the role of President on an interim or acting basis.”
Staff recommends approval of the proposed amendments as presented.
ADVANTAGES/DISADVANTAGES:
Increasing Board members’ travel allotment to adjust to the increased cost of conducting District-related business will allow Board members to attend meetings, conferences, events, and trainings that will benefit them in their role on the Board, and the District as whole. The current allotment is extremely out-of-date and not in alignment with the cost of travel and related activities undertaken by Board members. In addition, accounting for unintended administrative errors in a way that does not impact a Board member’s ability to take full advantage of the amount of funds allotted to them is fair and reasonable. Staff does not see any disadvantages to the course of action recommended in this report.
ALTERNATIVES ANALYSIS:
This report was provided in response to an agenda planning request; therefore, there were no alternatives considered.
PRIOR RELEVANT BOARD ACTION/POLICIES:
Board Policy 155 was last amended in 2023.
ATTACHMENTS:
None
Prepared by:
Linda A. Nemeroff, Board Administrative Officer/District Secretary
Approved/Reviewed by:
Linda A. Nemeroff, Board Administrative Officer/District Secretary
Chris Andrichak, Chief Financial Officer
Shayna van Hoften, Interim General Counsel/Chief Legal Officer