Executive Summary

A 1994 amendment redesignated the West Virginia Railroad Maintenance Authority as the West Virginia State Rail Authority (SRA). The Authority consists of seven members. The Secretary of the Department of Transportation is an ex officio member. The Authority, generally speaking, oversees and prepares plans for the operation of rail transportation in the State.

Issue Area 1: Most employees of the State Rail Authority are members of both the Public Employees Retirement System (PERS) and the U.S. Railroad Retirement Board's system and may retire with benefits exceeding 100% of final pay.

Out of 25 permanent employees of the State Rail Authority, 20 are members of both the Public Employees Retirement System (PERS) and the U.S. Railroad Retirement Board System. The retirement coverage is duplicitous in nature and is caused by a federal requirement that railroad employees participate in the U.S. Railroad Retirement program and the lack of a State exclusion from the Public Employees Retirement System. Since the State contributes to both retirement systems, the costs of providing these 20 employees with retirement benefits is much greater than those associated with other State employees. If duplicitous participation in the PERS were discontinued, it is estimated that the State could reduce costs by $44,006 each year. The Legislature should consider amending Code to permit employees currently enrolled in both retirement programs to choose whether to continue their participation in PERS, and disallow new employees covered by the U.S. Railroad Retirement Board program from participating in PERS.

Issue Area 2: Payments to Board Members for Travel and Compensation may be Excessive.

Statute provides that members State Rail Authority Board of Directors are to be paid compensation and travel expenses in the same manner as members of the Legislature are paid for their interim duties. However, invoices submitted by Rail Authority members claim compensation for travel days, ceremonies, conventions and other occasions on which meetings did not occur. Further, travel invoices have been paid for several questionable claims, including $506 which was paid to one Board member to attend the funeral of another and $3,789 paid to the same member in travel and compensation to attend 19 meetings of a private foundation, as a member of its board of directors. This Member accounted for 50% of the six appointed Members' invoices during the test period and $34,878 (39%) of total charges. This member and two others accounted for 87% of the Board's total travel and compensation charges. The amount budgeted for Board compensation was exceeded by an average of 98.8% during each FY reviewed, 1996-1998. A Board inquiry into one Member's travel charges found the Member should avoid involvement in the daily operations of the Authority as did a management review conducted by the Department of Transportation. Finally, legal/technical standards governing travel were violated by members who failed to properly file for reimbursement in a minimal number of cases, totaling $1,362 in overcharges.

The primary cause of this issue is that statutes governing the SRA Board authorize payment for travel and compensation for any duty which is in any way connected with the State Rail Authority and in any volume. The Legislature may wish to amend the controlling statutes by installing practical limits on travel and compensation, such as those it imposes on its own members.

Issue Area 3: Committee meetings of SRA are in violation of Open Meetings Law.

On at least seven occasions, various committees of the State Rail Authority Board have met without public notice and no minutes of these meetings have been maintained. These meetings were held in order to select vendors, to schedule events, and once to conduct an internal investigation. The Code requires that all meetings be open to the public, notification of meetings be made to the Secretary of State, and that minutes be maintained. Except for its failure to keep minutes of executive sessions as required by law, the SRA Board of Directors has been in compliance with the law with regard to regular Board meetings. However, the Board has failed to maintain the same level of consciousness with respect to its committees. One of the committees meeting in closed session was charged with selecting an operator for the West Virginia Central Railroad. While the failure to comply with the Statute may not have been intentional, any Board action taken in violation of this Statute may have been voided by a court (the statute of limitations of 120 days from date the "action complained of was taken or the decision complained of was made" has since tolled). The State Rail Authority should ensure the provisions of the Open Governmental Proceedings Statute are applied at all meetings of the Board of Directors as well as meetings of committees.

Issue Area 4: State Rail Authority Bylaws out of date.

The State Rail Authority Board of Directors is authorized by statute to: "...Adopt, and from time to time, amend and repeal bylaws necessary and proper for regulation of its affairs and the conduct of its business..." It is estimated that the Bylaws have not been revised since 1982 at the latest. The Bylaws contain language which is in direct conflict with State laws and other policy which is obsolete. Regular review and revision of the Bylaws of this organization will not only serve the State Rail Authority, but also assist the Authority in serving the residents of this State by keeping a focus on the Authority's mission.

Issue Area 5: Annual election of Officers not occurring as required by statute.

Arguably, the election of a Chairman is the most important decision a governmental board will make. Authority meeting minutes for the calendar years 1994-1998 were reviewed to determine the dates on which officer elections were held. Minutes indicate that only five elections were held during this period. In each case, a blanket motion was passed to retain the same officers as the previous year. An election, at the minimum, consists of a nomination opportunity for each office under consideration and a vote of support for those nominees. Minutes also indicated that no election of officers took place for more than two years beyond the August 16, 1996 election. While House Bill 2791 which passed Regular Session 1999, establishes the Secretary of the Department of Transportation as the Chairman of the Authority, ex officio, the Authority will still be required to elect a Vice-Chairman and appoint a Secretary-Treasurer each year. The Authority should do its best to avoid irregular intervals between elections and handling elections by blanket motion. Further, the Bylaws should be revised to provide more meaningful controls over the election process.