Personnel and Compensation Committee Meeting   8/18/2023

Excellent.

Thank you, Jason.

Good afternoon, everybody.

Welcome to the August 18th Personnel and Compensation Committee meeting.

Thank you all for joining us on this beautiful Friday afternoon.

We wanted to get together before the board meeting in a couple of weeks just to update this committee on how FY23 went, give an update on the goals, some culture work, just have a general conversation about 2023 and 2024.

Mr. Morman, the former chair of the Personal and Compensation Committee, is no longer a member of the board.

His term expired at the end of June, and we have new members that started in July.

And because of that, we have to have a temporary chair, and that's not the correct legal word, so I'm going to turn it over to Michael Westerman, General Counsel, to take care of that transaction.

Yes, so all we have to do here, a simple procedure, is

have a motion for Ms. Debruell to act as chair pro temp for the purposes of this meeting, and then simply take a vote on that motion, then Ms. Debruell will be able to act as chair for this particular meeting.

I'm sorry, Ms. Bulova?

Aye.

And Mr. Hall is absent.

Yes, you are duly authorized as the chair.

All right, thank you.

So next item on our agenda is the approval of our minutes.

Move approval.

So motion by Ms. Bulova.

Thank you, Mr. Cardwell.

Aye.

Mr. Cardwell?

All right.

You turn it to Joan for briefly, and then it comes to me for AIP.

I was thrown off by what was on the screen versus what's in my notes.

Absolutely.

Well, the good news is we've been pretty efficient.

We buzzed through the first couple of things listed on our agenda.

DJ is going to take a few minutes and go over the AIP goals, where we stand against FY23 and a very early draft of FY24.

I am going to spend a little time talking about the culture work that we've done over the past few months.

and then after that update, we are gonna move into closed session.

I will tell you that as we're preparing for the full board meeting, all of this information will be shared in some capacity with the board as well.

So you'll see the AIP goals and the culture summary as a part of the executive director support that will be distributed shortly.

Excellent.

Thank you, Joan, and thanks again for joining everybody today.

First topic is going to be a summary of our FY 23 annual incentive plan goals.

I'm really I'm thrilled to say that we have met or exceeded every single one of these goals.

And I say that I'm thrilled because when we set them about a year ago, they were truly stretch goals.

We sat together as an executive leadership team and we said part of the incentive plan needs to be putting stretch goals in place.

So folks are incentivized

to

The biggest mystery for us a year ago, we were still coming out of COVID, we had seen ridership start to recover, but there were talks of Omnicron and other variants of the virus and we weren't sure about folks coming back to work, it was just a big mystery.

So we set an increase

goal of 10% for ridership and cost recovery of 60%, which was 11% higher than the board budget, as you can see.

And we don't have final numbers yet, although we should have them in the next day or two.

And ridership, we blew that out of the water.

We had a 44% increase from the 2019 ridership, the pre-COVID ridership.

As Mr. Bruhl talked about a little bit before the meeting started, trains are really, really full.

and Amtrak is doing a great job of providing the service that folks expect.

So the ridership has been a real accomplishment for the Commonwealth, getting folks off the highways onto the trains.

and the Virginia

Pre-2019, every year you see ridership go up 3%, down 3%, stay flat.

is volatile based on gas prices, based on a number of different variables.

So we don't expect to see 10% every year.

That said, we're happy that we exceeded this goal significantly.

Cost recovery, we went through most of the year at about 60%.

And then with the recent ridership increase continuing to grow, we think we're going to end at about 66%.

So we will beat that as well.

Again, great success on keeping costs down and the ridership and revenue help with that.

Any questions on that, the first goal?

Okay, excellent.

It's just very positive.

Long Bridge, Long Bridge is obviously the gem of our project portfolio.

It's the most complex, it's the most expensive, it's the project that we're running, and we put these three sub-goals in place to meet in order to keep the Long Bridge focused on getting done by 2030.

I'm happy to say that all three of these were met.

The contract for the project management support was approved by the board in January and we had it lined up so the board voted yay and that afternoon it was signed and executed so those folks were ready to get to work, which is just great.

It was exciting to see that get approved.

It's exciting to see the staff

and Long Bridge.

and then both the Northern and Southern request for qualifications for Long Bridge were out by June 30th.

The North package was out in March and then the South package was out in June and we'll talk on the next slide about the 2024 goals.

We continue to have Long Bridge as a big part of our goals because again, that's really the project that unlocks all of the extra service for us.

Next goal was the 30% design of Franconia Bypass.

That was done in May, actually, so we beat that.

That's the other project that we, VPRA, are running ourselves as opposed to many of the projects that are being handled by CSX.

And that design was also done.

and then finally, and this is really the one that I'm most proud of because we started two years ago with three employees and we had projects that were already in place and they were going quickly and we had to keep those projects on track, no pun intended, while we grew the organization and so being able to meet these and getting the office space in Northern Virginia so we've got folks that are right by that fourth track project, right by Long Bridge,

Getting the Enterprise Resource Planning

projects slash system in place.

Really, that's going to change the way we do business.

We spent the first couple of years running our finances with QuickBooks.

So it wasn't really a nothing against QuickBooks, not a very robust planning system.

So we did get the ERP in place on July 19th.

And that's that's running very, very well.

And then getting the bench contracts in place by the end of March.

That allows us to reach out and get expertise when we need it in finance, engineering and planning.

all of those dates were met or exceeded.

So pleased to get that work completed.

Again, it's a big part of growing the organization with the culture and the environment that we're looking forward to deliver these projects.

That's a quick summary of how we did in FY23.

That's fantastic.

As a great report, is there anything you didn't get accomplished?

The tongue is firmly planted in cheek with that question for the public record.

Well done.

Thank you both.

I appreciate that.

A lot more to do.

Off to a good start.

The next slide

It's similar in format to what we had last year.

We're going to talk about ridership and cost recovery.

We're going to continue to advance the milestones for Long Bridge and other key projects.

And then the fourth goal is more around the culture and how we operate as an authority.

First one is you see the goal is to increase ridership by 3% while achieving a cost recovery goal is 60%.

Based on closing the books that we've just received over the last couple

We'll probably boost that cost recovery goal up a little bit so you see that go higher.

The ridership increase of 3%, we're pretty firm on that.

We think that's a good stretch goal.

I didn't mention this earlier, but one of the reasons why ridership was so much higher in FY23 compared to 2019 is because we added the new trains.

We added the second RONO train.

We added the third NORFO train.

And in fact, July is the first month, July of 2023 is the first month where we'll be comparing the same number of routes to the previous year.

All of 2024 will be compared to a similar number of routes.

So without new service, we think 3% is a real hard number to hit, but we're going to work hard to hit that.

And then again, cost recovery will probably push that up a few percent.

Key milestones for Long Bridge.

We've got the RFP for South package going out in the spring and then the phase one notice to proceed on the Northern package by the end of January.

Just high level schedule for the Northern package.

We shortlisted folks.

That was done earlier this year.

Those folks are working on the firms that were shortlisted are working on a response to an RFP now.

We will come to the board at the December meeting or before with a recommendation to sign the North package.

So we will know in December who that vendor is.

The notice to proceed then will come after that.

It should be done.

I don't see any reason why it won't be done by January.

I can make an argument to shift that and have the actual NTP done in December as well, and we're still talking about that.

But our plan is to absolutely get the board to approve

the North Package Construction Vendor at the December board meeting.

So that's a lot of work when when we talk to the industry, when we talk to our folks, folks know that that's an aggressive schedule.

But we've done a good job of communicating with them and we've had conversations with them one on ones.

And folks, I think, are well positioned to hit these dates even as aggressive as they are.

I went kind of quickly, any questions on either of those?

All right, thank you.

Other key milestones.

We've got the selection of the contractor for the fourth track project in Alexandria, which is a key project for that area.

I'm getting final design for the Franconia bypass by the summer of next year.

And then at the January board meeting, present a recommendation on the temporary and permanent solutions for New River Valley, if there are two different solutions.

As I think we've talked about, as I know we've talked about, we're in the process of bringing the New River Valley

plans to 30% design.

And at that point, we will have a much better feel for the costs and the schedules.

And by January, we'll be able to present those with a recommendation to the board on what the recommended path forward is on New River Valley.

and then the final goal is, again, organizational, ensuring we can deliver against our goals.

We'll do the second phase of the enterprise resource planning by next May and then we'll get a standardized project management process in place so everybody's managing projects the same way.

What we have now, we've got CSX projects being run in great form by CSX,

Our projects are being managed a little differently.

We've got to make sure that's all consolidated consistently.

We started that process this past year by changing it to 30% design is really when the schedule gets finalized.

We'll continue to codify this process and have a standard process in place by the end of the year.

Those are the draft goals right now.

We're going to continue to tighten them up over the next few weeks, and then we'll have them in place by October 1st to start the new performance year, which is October to September.

The only thing I'll share anecdotally for the good of the group is from a procurement perspective, our team has a lot of outreach with folks in the industry.

We have developed a very strong reputation and a lot of folks have shared with us that they're surprised we've been hitting some of the dates that we've been hitting.

So we take that as a compliment.

Yeah, I agree.

And can do nimble and, you know, that's us.

Absolutely agree.

Thank you.

All right, well then with that, if there are no other questions or comments, I will turn it back to Joan to talk about some of the culture work we are doing here within the authority to build the right team to deliver against these goals.

Absolutely.

Thanks, DJ.

So you have seen this slide before.

Anytime we talk about culture, our mission and vision is clear.

We've previously shared our employee value proposition, and I've walked you through previously some of the activities and the inclusion and collaborative approach we took to creating our values as an organization.

One of the things that we have recognized very quickly is even as a young organization, people seem to really like to work here.

And as we are outlining longer term strategic plans, we take culture as a very important part of our business.

Cultural Eat Strategy any day of the week.

And so it is very important for us then to start to get very clear on what's working and what we need to do to maintain that.

So as we continue to grow, to DJ's point, we were in single digits two years ago and now we're at 45 employees and we still have some growth left.

We had an opportunity in the spring of this year to host individual conversations.

I actually interviewed every employee that we had at the time, had over 40 individual conversations and asked folks questions like, what is your ideal work environment?

What do you need to bring your best self to work?

And what do you need to escalate issues and mistakes as an example?

And so the responses we got were pretty incredible and wonderfully consistent.

When we asked the first question around ideal work environment, and I have three slides with a lot of information, again, this will be included in the EDR, but as you glance at these, you'll get a sense of how people described their ideal work environment.

And as I flip through these slides, what I will tell you is there was a tremendous amount of overlap between how people describe their ideal work environment and then what they said existed at VPRA.

And so that has been a very clear win for us from a culture perspective.

And that's why people are very interested in maintaining what we have created for ourselves.

Along those lines, these were some of the responses for bringing your best self to work and the things that people are looking for.

And this is kind of in the spirit of inclusivity, making sure that people feel that diversity of thought, diversity of experience matters for the organization.

And so these were some of the responses there.

And then the other key question was around issues and mistakes, right?

It's very important for us as an organization to be able to course correct.

Sharon mentioned being nimble, right?

That's very important for the work that we do.

And so to stay true to that intent,

We have to have an environment where people feel comfortable raising their hand and saying, I found an issue.

Let's rally around it and fix it.

Or I made a mistake.

I made the wrong decision.

We've run into situations where we made a decision based on what we knew at that time.

And then six months later, we were six months smarter.

And so we need to maintain that nimbleness to be able to course correct.

My favorite thing about this question in particular was the vast majority of people said, I already feel comfortable in this organization doing just that.

No one feels like it's a gotcha and I got you in trouble, everyone feels very comfortable.

It's not a fear-based organization and there are employees here that have had experience in other organizations that were rooted in fear and that creates those bad behaviors that we want to avoid.

So those were some of the core findings and the themes that we've found.

I did ask folks to describe VPRA and these are some of the great words that they used.

I think in this one scrappy is my favorite because it feels like we're scrappy quite a bit.

chaotic in a fun way, but you can see we are really enjoying the fact that we built a very talented team.

It's a fast-paced environment and at the core of everything is that folks are very much mission-driven.

I did want to share a couple of direct quotes, just to give you a sense of what people said.

These are six different conversations.

There were other comments that were very similar, but

People are happy to be working at VPRA.

They're very committed to the mission.

It's working really well.

And so we're very, very excited about that.

From an overall summary perspective, what I'd like to do is highlight a couple of the themes and a couple of the cautions.

As I described already, because of that overlap between what people described as their ideal work environment and what exists at VPRA, there is a high level of employee satisfaction.

The leadership team got a lot of kudos for being very effective.

There was a lot of requests while we're working hard, people who want to, they want to socialize and they want some team building opportunities, things outside of work.

Effective meetings and respective time, DJ had mentioned earlier, it's very important to us organizationally to start and end meetings on time and to make sure we're meeting only when we need to meet.

If it's information that can be shared in a more effective way, meaning if it could have been an email instead of a conversation, we're continuing to try to enhance those and make sure we're being very respectful of folks' times.

We got a lot of kudos for that and certainly always an opportunity to continue to do that better.

Requests for informations and updates was an interesting one.

And really the thought around that was everybody wants to know about everything that we're doing, which is a virtually impossible task.

There's so much happening and we had, there's so many nuances.

The beautiful thing is we are, while we're talented, we have a talented team.

We have a very kind of naturally curious team

People want to seek to understand and they want to know more about anything and everything that we touch.

I think we've all learned more about long eared backs than we ever expected to.

Those sorts of things come up and people have an interest.

What we're trying to do there very deliberately is to make sure people feel well informed and reminding folks to leverage what exists today.

For example, we've got a board meeting coming up

We're encouraging our employees.

There's a lot of great information that's shared there.

They should be either attending or listening in or listening to the recording afterwards, right?

That's an underutilized tool by our employees in today's environment.

And then just a call for more individual professional development.

We focused on that more.

Again, I think there's always an opportunity for continuous improvement there.

A few cautions organizationally.

Because what we have with the 45 people that are here today, we know that it's kind of special and we want to maintain that.

And so there's a lot of conversation around preserving what's good, right?

Making sure we're very deliberate with our hiring practices, that we're finding talented people who would fit the organizational culture.

We want to be very mindful of our evolution, right?

We're starting to migrate out of this kind of infancy phase, and so that will require us to shift mindsets in some of our activities and how we approach them.

There's a lot of concern or caution around making sure we don't let silos creep in.

When you have a common mission, you have to make sure that that collaboration, that communication stays in place.

Otherwise, you'll start to miss things.

Using resources fully is something that we have continued to remind folks.

As we continue to staff appropriately, we also have the opportunity to then put work where it belongs.

Avoiding clicks was an interesting one that surfaced which was really we've got certain teams that work really well together and very frequently making sure they're being deliberately inclusive of people they may not work as closely with.

We've got folks who've worked in other organizations before together and so making sure we're just mindful of that.

And then as we signed the lease for Alexandria and we work to build that property out and move in, making sure that the Alexandria office feels the same as the Richmond office as well.

So I thought that was very thoughtful and proactive caution for us.

I will pause there.

It was a lot of great information.

I'm very happy to say that people are pleased with the employee experience that they have here.

I think we're probably a year or two out from a formal employee engagement, but I do have that on my mind from a longer-term strategy perspective.

I love this report.

This is wonderful.

From the very beginning, we talked about the importance of establishing a culture within the organization.

We talked about different organizations that are not great places to work because of their culture, the chemistry.

Clearly, we've hit some

Wonderful write notes here for us.

So this is a wonderful report.

And I think that the cautions are well stated.

So it's important that we not claim success and then let things decline or deteriorate.

And

I would just echo Sharon's comments.

I think we could team in place and integrate to keep the Esprit de Corps exactly where it needs to be.

It's a busy job.

There's a lot to get done.

If people feel like it's hectic but fun or hectic in a good way, that's a win.

That's a win.

Thank you.

All right, very good.

Yeah, I think so too.

I just want to echo what Mr. Cardwell said.

I mean, it is an important part of what we do because we won't deliver what we need to deliver without this team working together.

The team only works together well if we invest in the team.

Very good.

Well, thank you for that.

All right, and I'm happy to move that the Personnel and Compensation Committee convene in a closed session, pursuant to Section 2.2-3711A1 of the Code of Virginia for the purpose of discussing the performance of a specific public officer and his employment contract, and that legal counsel and the VPRA chief administrative officer attend

the closed session because their presence is deemed necessary and will aid the committee in its consideration of these matters.

Thank you, Mr. Cardwell.

Ms. Bolivar?

Aye.

Thank you.

All right.

Thank you.

So the motion carries.

The committee is going to move into closed session.

Only those matters directly related to the motion are going to be discussed in this closed session.

I'm logging off.

All right, thanks, Jason.

We're now going to take a roll call vote, and I ask that each member indicate their agreement with the following statement.

To the best of my knowledge, during the closed meeting, the only matters heard, discussed, or considered were those matters lawfully exempted from open meeting requirements under the Virginia Freedom of Information Act and only those public business matters as were identified in the motion by which the closed meeting was convened.

Ms. Bolivar?

I agree.

Thank you.

All right.

Thank you, Mary Estelle.

The motion carries.

There is no further business to come before the committee today, so we will stand adjourned.

Okay.