Long Beach Transit: Running as a Business

“The way we’re run and the corporation is set up, the board hires me and they’re a policy board. I report to them and I have a one-page contract that has I’m “at will.” Any time they want to get rid of me, but they have me run the company and they’re not involved in what color the seats are going to be. We let the experts decide the paint schemes.”

The board does the major budgets, the capital purchases, but they’re not involved in the personnel decisions. Jackson says, “There’s nobody putting the arm on you to hire someone or to do something that isn’t in the best interest of the community for some political reason. We’ve been able to resist that.” He adds, “It’s very unusual in the industry.”

Jackson and his wife, a teacher in Long Beach, decided to stay in Long Beach and to make themselves a part of the community. While he’s had a number of opportunities to run larger systems in other areas, he’s stayed at Long Beach and gotten involved in all aspects of the city and the community. He decided to approach this job more like a doctor, an attorney or other professional in town. “If you’re a doctor, you don’t decide to practice for four years and leave this town and then go five years. You try to make yourself a part of the community and that’s what we’ve done.”

A Non-Profit Agency

Long Beach Transit celebrates it’s 50th anniversary as a public corporation next year. Back in the 70s when people started moving to the suburbs and many agencies were facing bankruptcy, cities either let them go bankrupt or set up some form of public agency to run them. Jackson says Long Beach and San Diego were the only two cities in California that had the same consultant who did an analysis and said if they want to run it more like a business, set up a California non-profit corporation and then have it arm’s length from the political process and try to run as a business with minor subsidies, but it would sink or swim on its own. “And that’s what they did,” Jackson states.

As Jackson explains, they went from paying retirees basically out of the farebox because they didn’t have any money, to today, where pensions are fully funded and the operating budget is balanced. The liability potential for accidents, workers comp accounts — everything is funded and they have some cash reserves which have gotten them through the last three years without having to lay anybody off.

And building that reserve he attributes to being a non-profit corporation. “When you get into a purely public sector system, there’s not a council member or a board member that is elected that doesnt’t have a project that he or she would like to fund.” He continues, “If there’s a million dollars in the bank, they’ve got three million-dollar projects to do; so it’s been hard for transit systems to do their priorities that way.

“I’ve been lucky to have a series of really good people over the years who have worked for Long Beach Transit along with me,” Jackson says of his staff and the next generation that will be taking over. “My philosophy has been to hire and to train and to develop really good people and there’s a big number of people running transit systems who started here in Long Beach.

“Many of these people worked here and then went as far as they could go and then they either wait for me to leave — which will be happening — or they decide to leave the nest and that’s what’s happened.” He adds, “And that’s one of my proudest accomplishments, to be able to have peers and professional colleagues and friends who are running transit systems across the country who worked with me in Long Beach.”

While the succession planning may not be done as formally as at some other agencies, the department heads have people behind them in place ready to go. One of the specific examples Jackson shares is of Robin Gordon, who’s been at LBT more than 20 years, who started out as its payroll clerk. “She went to school, became head of payroll, got into human resources, got her degree in that area and became administrator, the manager of the department, put into operations with the executive director of operations and is now chief operating officer.”

With the tuition reimbursement program, Jackson says, “We really encourage people to dream their dream.