6. GOVERNANCE, COMMUNICATIONS AND DECISION-MAKING

6.1 Introduction

There are a number of ways that a regional fare card program could be organized and managed, and the governance model that is selected affects every aspect of program development and defines the roles and experiences of the participants. This chapter begins with a description of the central governing contractual arrangement that guides the development of the RFC Project, namely, the Interlocal Agreement. It then addresses the key components of the RFC Project’s organizational structure and the roles and responsibilities of the major participants.

6.2 Governance

6.2.1 Interlocal Agreement

The “Interlocal Cooperation Agreement for Design, Implementation, Operation, and Maintenance of the Regional Fare Coordination System” (ILA) was signed on April 29, 2003 by the chief executive of each of the partner agencies.

The ILA defines the governance structure of the project and specifies how decisions regarding the project are to be made. It describes the responsibilities of the partner agencies, the Joint Board, and the Project Team (summarized below). The ILA also lays out a Contract Administration Plan and a Finance Plan including a project budget. In addition, the ILA specifies the requirements for an agency to join or to withdraw from the RFC Project.

The ILA specifies that the project will be operated under a consensus model. That is, all partners must agree on a decision for it to be adopted, and every agency therefore has veto power. This arrangement differs, for example, from the governance structure of the TransLink^âregional fare card project in the San Francisco Bay Area. There, the Metropolitan Transportation Commission (MTC) acts as the lead agency among a group of 23 partner agencies. The MTC manages the project and ultimately makes the major decisions regarding the program.

Personnel at most (if not all) of the smaller RFC Project partner agencies indicated that a consensus governance model was a requirement for their participation. Nonetheless, King County Metro (KCM) does have substantial de facto influence in the RFC Project’s decision-making process. This influence arises because, as the largest and most complex agency, its needs define many of the RFC system requirements. KCM also contributes more resources and assumes more responsibilities than the smaller agencies.

It should be noted that prior to the adoption of the final ILA in April 2003, the partner agencies coordinated a great deal on regional transportation issues. One of the first groups concerned with regional transportation issues was the “regional planning team,” which consisted of staff from all seven agencies. This group was tasked to develop a coordinated fare system within the region under the RTA, and its work led to the smart card demonstration project that took place from October 1, 1996 through March 31, 1997. Previous versions of the ILA helped guide the earlier phases of the project.

6.3 Committees/Boards Set Up by the ILA

6.3.1 Joint Board

The ILA designates the Joint Board as the project’s executive decision-making body. The Joint Board is comprised of heads of each of the partner agencies: the General Manager, CEO, or Executive Director. Each agency also selects alternate representatives in the event that the Board Member is unable to attend a Joint Board meeting. Quorum for a Joint Board Meeting consists of the majority of Board members.

The Joint Board is responsible for project oversight and contract administration. With regard to RFC Project governance, the Joint Board has the following responsibilities:

approval of amendments to the ILA;
contract awards and terminations;
budget approval;
approval of uniform agreements developed by Project Team, such as card holder agreements, institutional account agreements, and third party retailer agreements; and
approval of addition of new partners and approval of terms of withdrawal of partners

The Joint Board may delegate other responsibilities relating to project oversight and contract administration to the Project Team (described below).

As noted above, most Joint Board decisions require unanimity. However, the ILA provides for majority rule regarding two types of issues: 1) termination/replacement of the project Contract Administrator; and 2) approval of change orders with value greater than $50,000 but less than $100,000.

Importantly, the Joint Board is not a legal entity. It does not contract with outside consultants or with the system vendor. It cannot hire legal counsel in its own name. The KCM Prosecuting Attorney’s office has been available to consult with the Regional Team, but ultimately, each agency can only receive legal advice from its own legal counsel. The only legal entities in the RFC Project are the partner agencies.

6.4 Project Team

The Project Team consists of:

the Contract Administrator;
the IS/Technical Manager;
the Budget and Contract Control Manager;
agency Site Managers; and
the Project Assistant.

The Contract Administrator is nominated by King County and approved by the Joint Board. The Contract Administrator manages the contracts with the system vendor and any Joint Board consultants. The Contract Administrator is empowered to make project decisions on issues that are not specifically assigned to the Joint Board or to the governing bodies of the separate agencies.

Members of the Project Team, except for the agency Site Managers, are employed under the terms and conditions of King County and their offices are in the King County Metro office site. They act on behalf of and at the direction of the Joint Board. They do not have any responsibilities outside the context of the fare card project; all of their time is dedicated to the project.

Site Managers are selected and employed by their respective agencies and follow the direction of their own Agencies. With one exception, the Site Managers devote all of their time to the project. The Everett Transit Site Manager took on the Site Manager responsibilities in addition to his existing responsibilities.

6.4.1 Contract Administrator

As stated in the ILA, the primary responsibility of the Contract Administrator is “overall project management.” This differs from the functions implied by the job title, and several people we interviewed commented on the tension between the two roles. Because the head of the Project Team is a Contract Administrator, it has been noted that contracting issues seem to drive the project development. An alternative approach would have been to designate a traditional Project Manager who is tasked with overall project planning and implementation, and having contract administration as an important sub-task. The Contract Administrator is a key position on the project.

The ILA lists the Contract Administrator’s responsibilities as follows:

to serve as a single point of contact for the consultants and the vendor (as clearly specified in the ILA);
to provide administrative coordination to the Joint Board and the agency Site Managers;
as directed by Joint Board, to identify and recommend revisions to the RFC Project scope, schedule, budget and finance plans, and to agency business rules;
to facilitate development of the RFC Project rollout plan; and
to facilitate development of uniform agreements to be used by the agencies, such as cardholder agreements, institutional accounts, and third party retailer contracts.

6.4.2 Regional Technical Manager

The Regional Technical Manager works closely with and supports the Contract Administrator on the Regional Team in guiding the project management strategy. As presented in the ILA, the Regional Technical Manager’s responsibilities include the following:

provide Contractor and Agency technical coordination with regard to design, development, implementation, test, delivery and operation of the RFC System;
monitor Contractor and Agency technical performance and compliance;
monitor and report on RFC Project schedule;
conduct regular meetings with the Contractor and Agencies to identify and track technical issues;
identify, revise and develop new technical requirements as may be needed;
identify and document the need for revised or new Agency Business Rules; and
coordinate technical contract deliverables, change orders for appropriate approvals, and Contractor Requests for Information (RFI).

Lesson: Consider Whether to Hire a Consultant

The design and implementation of a regional fare card system involves a considerable amount of detailed information. The information concerns technical aspects of fare card system hardware and software technologies, as well as organizational and administrative knowledge regarding proven ways of integrating a fare card system within existing transit agency structures and processes. Whether the agencies decide to procure a customized system, go with “off the shelf” technologies, or make some adjustments to available hardware and software, the breadth and depth of information that must be assembled and mastered can be overwhelming.

The Central Puget Sound Regional Fare Coordination System partner agencies addressed this problem by retaining the services of a consultant specialized in ITS technologies and fare card systems in particular. The consultant has worked with the partner agencies from the beginning of project development. The consultant has supported the preparation of the various project milestone documents including the report on the assessment of alternative technologies, the project Request for Proposals and the vendor contract.

The consultant was hired to be a project-wide resource, responsible to the Joint Board. However, even when the consultant spent time working with an individual agency, there were opportunities for the knowledge to be transferred to other agencies through inter-agency contacts via Subject Area Advisory Team (SAAT) meetings and other meeting occasions. The collaborative atmosphere established between project partners facilitated this knowledge transfer., and the partner agencies valued the contributions of the consultant to the development of the RFC Project.

An additional role being considered for the consultant in the RFC Project is as a Project Manager, though no decisions has been made regarding this or other possible project management alternatives.

6.4.3 Agency Site Manager

Each partner agency appoints its own project Site Manager. As specified in the ILA, the primary responsibilities of the Site Managers are:

to serve as the agency’s primary point of contact for the contract administrator, joint consultants, and the vendor;
to advise the Project Team on project status, technical options and implications for the individual agency;
to coordinate agency efforts to meet contract requirements;
to coordinate agency review of the RFC system functional and detailed design; and
many other secondary responsibilities.

Every Site Manager we spoke to indicated that the position carries a significant burden of time and responsibilities. All agencies except one have created a new full time position for the Site Manager. The Site Managers spend considerable time attending internal agency meetings, as well as meetings of the SAATs and Joint Board. Like the Contract Administrator, the Site Managers must direct, coordinate, document, and communicate RFC Project activity occurring on many fronts both within their agencies and at the regional level.

6.5 Committees and Boards Not Created by the ILA

6.5.1 Agency Governing Bodies

The ILA preserves the autonomy of the individual partner agencies. While the Joint Board has authority over issues directly related to the contract administration, each agency’s governing body (usually its board of directors) retains control over many other project issues. For instance, the agencies recognize that having consistent policies for child, student and senior discounts will aid the move to regionalism. However, the governing bodies of each agency still have the final say on those policies, not the Joint Board.

In addition, the governing bodies of each agency have an interest in the activities of the project, and may request project status and issues updates directly from their respective Joint Board members, Site Managers and other RFC Project personnel.

6.5.2 Subject Area Advisory Teams (SAATs)

The ILA does not mention Subject Area Advisory Teams or SAATs. KCM introduced the concept of the SAAT in the RFC Project structure. These working groups bring together people with specialized expertise to resolve topical issues related to particular aspects of the project. At the time of writing this report, there were twelve SAATs covering the following areas:

Customer Service
Project Evaluation
Marketing
Finance
Institutional Accounts
Fares
Retail Sales
Technical
Vanpool
On-board System Integration
Operations, and
Reporting and Data Management

New SAATs can be created as the need arises.

SAAT members are drawn from all the partner agencies. Although agencies are not required to place personnel on each SAAT, in practice they generally do so in order to stay informed about current issues and be able to influence developments in each of these important subject areas.[36]

Soon after the ILA was signed, the agencies requested the vendor to send personnel to attend the SAAT meetings and serve as an information resource. This was an unexpected cost to the vendor. Feedback during our interview process indicates that, in practice, vendor personnel are not always effectively utilized in these meetings, in part because the content of the discussions cannot always be determined in advance, so the most appropriate vendor personnel might not be present.

Agency Site Managers and the Contract Administrator also attend the SAAT meetings when their schedules allow. Their role there is to share information, such as pertinent developments of other SAATs, as well as to gather information to guide the direction of the project. Site Managers also see their participation as an opportunity to facilitate a focused discourse.

One of the major SAAT activities consists of formulating recommendations for the creation of business rules for the RFC Project. Business rules govern the many detailed aspects of the business activity of the project as it goes into deployment. Rules specify how agencies interact with one another, such as the form of reports that will list interagency traffic, and how the costs of refunding a card will be absorbed. Business rules are also vital to specifying the service product the transit rider will experience. For instance, some business rules state that a customer will be able to view their account balance and 30 day history via the Web site. There are a very large number of such rules, and identifying and finalizing them has been very time-consuming.

Initially, SAAT members were sometimes frustrated because of poorly defined roles. Statements of Work (SOW) that defined the purpose and function of each SAAT were developed roughly a year after the ILA signing. Sometimes agencies assigned junior personnel to the SAATs who were not empowered to make decisions. This could delay decision-making, as these members would need to communicate with their home agencies before committing to a decision. The most effective SAATs proved to be ones where the head of the SAAT had the support of his or her home agency to devote sufficient resources to leading the SAAT.

The SAATs are not decision-making bodies. They formulate recommendations that may be accepted or rejected by the Joint Board, which has the final decision making responsibility.

6.5.3 Senior Staff Advisory Group (SSAG)

This group is comprised of the Joint Board Alternates. Each member is a senior manager in his or her own organization. The SSAG is not mentioned in the ILA, nor does it have a formally designated scope or purpose. In practice, the group provides policy guidance and review of all items scheduled for Joint Board approval or action.

6.6 Uniform Agreements

The ILA calls for the Joint Board to create and approve uniform agreements to govern the relations between the agencies as a group and other parties. These agreements include:

the cardholder agreement, which informs the cardholder of the all fees, terms and conditions of the card and its features (e.g. balance autoload, balance protection, refunds and account history viewing);[37]
the third party retail revalue agreement, which informs retailers about the terms and conditions that concern the provision of fare card revaluation service;
institutional account agreements, which inform organizations about the benefits, fees, terms and conditions for participating in programs whereby they provide their employees a transportation subsidy and distribute fare cards to them;
the license to use the transit application - to inform the fees, terms and conditions of using the RFC Transit Application between Card Issuer and RFC Agencies.
agreements governing third-party applications loaded on the RFC card, which inform non-transit organizations (e.g. a coffee vendor or the municipal parks system) about the fees, terms and conditions that relate to loading a third party application on the RFC card;
public records disclosure agreements, which ensure timely, coordinated and consistent procedures among the partner agencies for handling of public information requests and for protecting customer and system data from unauthorized disclosure;
uniform fare collection and customer services practices (“System Operating Procedures”), that specify all system-wide operating policies, procedures, and business processes;
pre-membership information materials for public transit agencies and private transportation service providers, that inform transit agencies and transportation providers who are potentially interested in joining the RFC system about the fees, terms and conditions of joining;
regional credit card transaction fee agreements, that establish a uniform customer credit card fee structure among the agencies and ensure that customers are charged consistent fees at all agency-operated customer service locations;
regional fare policies; and
agreements on the uniform treatment of confidential materials, that define a uniform set of agency practices for the treatment of vendor trade secrets and/or other confidential materials.

6.7 Procedure for Removal or Addition of Agency to Project

The ILA provides for its own complete termination by the Joint Board following a unanimous vote of all agency representatives. It also provides for individual agencies to withdraw from or to join the RFC Project.

In order to withdraw from the project, the ILA requires an individual agency to submit a report to the Joint Board that explains:

the reasons for withdrawal;
the alternatives to withdrawal that the agency considered;
the probable impacts on the remaining agencies individually and collectively;
the probable impacts to the RFC contract scope, budget and schedule; and
a proposed work plan of actions necessary to accomplish the withdrawal.

The Joint Board then reviews the report, and presents its own report to the Governing Board of the withdrawing agency. The Joint Board report should cover the same issues as the original agency report, and either include a work plan to affect the agency’s withdrawal, or propose alternatives to withdrawal. The agency Governing Board then decides whether to accept the terms and conditions of the Joint Board, including payment by the withdrawing agency of reasonable RFC Project costs that arise because of the withdrawal.[38]

After a withdrawal, an agency should release any of its project grant money to the remaining agencies, and should reimburse the FTA for any grant money received.

The ILA does not specify detailed terms and conditions governing an agency joining the RFC Project. The ILA states that the Joint Board would need to approve those terms and conditions and that the cost allocation procedures can be modified to allow for the addition of a new partner agency. In April 2004 a final version of a pre-membership agreement was issued, and it details the responsibilities and membership requirements of prospective member agencies seeking to join the RFC Project.

[36] An exception is Everett Transit, which does not operate vanpools and therefore does not have people on the vanpool SAAT.

[37] This agreement also includes the Data Privacy Policy, which informs the customer of what data are collected, how they are used, who has access to the data, and other aspects of data privacy.

[38] Washington State Ferries received special consideration as to its financial obligations because the agency was waiting for its funding from a line item in 2003 Washington State Budget. If funding was not granted, WSF would have been responsible only for its share of the costs incurred by the project up to that date.

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