Sweeping McKeon NJ Transit Reform Bill Advanced by Assembly Committee

(TRENTON) – Legislation Assemblyman John McKeon sponsored to bring governance, oversight and accountability reform to the troubled NJ Transit was advanced Thursday by an Assembly panel.

The bill comes after McKeon in 2017 chaired several joint hearings with the Senate into NJ Transit’s continued problems with safety, cost and reliability.

“NJ Transit needs widespread reform if it’s to remain accountable to the people of New Jersey,” said McKeon (D-Essex/Morris). “What we learned last year was shocking and disappointing. NJ Transit has lost its way through a series of bad policy and personnel decisions that left it unable to fulfill its basic duty – get people to work safely on time. Commuters are angry, and rightly so, but with this bill, we move toward ensuring NJ Transit once again becomes a national model of efficiency and accountability that is answerable to, first and foremost, the commuters.”

The bill (A-1241) contains sweeping reforms designed to improve governance, enhance oversight and increase accountability, especially to the public.

“The status quo is unacceptable, and shows how the current system can be abused by a governor who makes bad decisions when it comes to mass transit,” McKeon said. “These reforms will bring about a modernized agency easily and transparently held accountable by the public. It will ensure NJ Transit remains focused on its core function – at all times. We look forward to working with Gov. Murphy on this legislation and additional reforms.”

The bill (A-1241):

• Establishes four new positions on the NJ Transit board, and restructures the existing board so that all public members are required to either have experience as regular public transportation riders or have expertise in human resources or certain transportation topics.  The board goes from four public members chosen by the Governor to eight public members chosen by the governor, with five of those members being chosen upon the recommendation of the North Jersey Transportation Planning Authority, the Delaware Valley Regional Planning Commission, the Tri-State Transportation Campaign, the Senate President, and the Speaker of the General Assembly respectively. The bill prohibits a board member from serving for more than 90 days beyond the expiration of that board member’s term unless reappointed to the board.  The bill also prohibits anyone from serving on the board if that person has made a political contribution in an amount or manner that would create the appearance of impropriety and requires board members to annually disclose political contributions to the board and the chief ethics officer.  The bill requires that the board hold a minimum of 10 public board meetings per year.
• Imposes new statutory duties on the board of directors, including: executing direct oversight of NJ Transit’s management team in the effective and ethical management of NJ Transit; monitoring the implementation of fundamental financial and management controls and operational decisions of NJ Transit; establishing certain personnel policies; approving quarterly schedule changes; adopting guidelines for when it is appropriate for the chief ethics officer to forward the results of preliminary investigations to the appropriate authorities; and adopting a code of ethics.  The bill provides that the board members are to perform their duties in good faith and with the appropriate degree of diligence, care, and skill and to apply independent judgment in the best interest of NJ Transit, its mission, and the public.  The bill requires board members to take and subscribe an oath of office and to execute an acknowledgement that recognizes the duties and obligations of the board member.  The bill establishes an employee relations committee and includes expands the audit committee to include finance.
• Establishes the North Jersey Passenger Advisory Committee and the South Jersey Passenger Advisory Committee, within NJ Transit, for the purpose of providing advice, input, and guidance to the corporation’s board of directors.  The committees are modeled, in part, on existing advisory committees within NJ Transit.
• Requires the State Auditor to perform audits of NJ Transit every six years, which are to focus on specific areas to be determined by the State Auditor.  The bill also requires NJ Transit to hire an independent firm to conduct a study at least once every five years on the financial management practices and budget reporting practices of mass transit agencies throughout the country and to prepare and issue a report on its findings.  Following the issuance of the report, NJ Transit is required to adopt financial management and budget reporting policies and practices that are in line with the best practices of mass transit agencies throughout the country.  Upon the affirmative vote of seven members of the board of directors, NJ Transit may opt not to adopt individual policies or practices that are in line with the best practices of mass transit agencies throughout the country.
• Requires that NJ Transit hold at least two public hearings in the counties affected, within one-half mile of the route and, to the extent practicable, near each terminus of the route before implementing any substantial curtailment or abandonment of service, and at least 10 public hearings in separate counties at locations within a quarter mile of both a rail line and bus route before implementing any fare changes.  Each public hearing is required to consist of an afternoon and evening session, where each session lasts at least two hours and the sessions are in the same place and on the same day.  At least half of the public hearings are required to be held on a State working day.  At least two members of NJ Transit’s board of directors are required to be in attendance at each public hearing.
• In addition to the public hearing requirements, NJ Transit is required to provide a postal mailing address and electronic mailing address where members of the public may provide written comments regarding the proposed fare increase or substantial curtailment or abandonment of service.  NJ Transit is required to prepare and publish a written response concerning any issue or concern raised by a member of the public at any public hearing or in any written comment.  NJ Transit is required to provide notice of its intent to discontinue, substantially curtail, or abandon service to each county and municipality whose residents will be affected.  “Substantial curtailment” and “substantially curtail” is defined to include, but not be limited to: the elimination of a motorbus regular route, scheduled trip, or scheduled stop along a motorbus regular route or of a rail passenger service line, scheduled trip, or scheduled stop along a rail passenger service line; a reduction of 30 minutes or more in the beginning or end of service for the corporation’s adopted schedule or timetable for a scheduled stop along a motorbus regular route or rail passenger service line; and any change to a motorbus regular route or rail passenger service which may increase barriers to accessibility for a person with disabilities.
• Requires NJ Transit, at the request of the chairperson of any standing legislative committee, as approved by the presiding officer, to appear before that committee to present testimony and provide documents on any topic or subject requested by the committee and to respond to any questions by members of the committee.
• Requires NJ Transit to employ a chief ethics officer to investigate allegations and suspicions of unethical conduct or criminal activity within NJ Transit and to determine whether NJ Transit is in compliance with applicable State law.  The chief ethics officer is to operate independently of the executive director and is to report directly to the board of directors.
• Requires NJ Transit to report information to the Governor and the Legislature regarding its employees, including the average salary, number of employees in management positions, and number of employees that are not in management positions in key demographic groups, which are to include, at minimum, race, ethnicity, and gender.
• Requires NJ Transit to utilize multi-year budget documents that cover the most recent completed fiscal year, the estimated results for the fiscal year in progress, a recommendation for the fiscal year to commence, and estimated needs and projections for the following fiscal year and to provide those documents to the Commissioner of Transportation, Senate President, Speaker of the General Assembly, and the chairpersons of the Assembly Transportation and Independent Authorities Committee and the Senate Transportation Committee.  The budget documents are required to provide detailed information on several key areas listed in the bill.
• Expands the powers of NJ Transit to partner with other public and private entities in forming corporate entities that provide public transportation services.  This expanded power will enable NJ Transit to enter into formal partnerships with other transit agencies for the operations of major transportation hubs.
• Provides that any person newly hired by NJ Transit within five years of the effective date of this bill as an engineer or mechanic is exempt from the residency requirement established by state law, if NJ Transit demonstrates that it is unable to hire a suitably qualified in-State candidate.

The bill was advanced by the Assembly transportation panel.