County of Tuolumne Grand Jury 12855 Justice Center Drive*

Commendations 1

• CM1
  Commendation: TUD staff should be commended for their efforts to facilitate new connections, despite the challenges of geography and infrastructure in its service area. 17 Part 2. Personnel and Leadership Changes The year 2021 brought a change in TUD’s executive leadership. On April 1, 2021, the TUD board voted 3-1-1 to terminate the then-general manager’s employment contract, effective immediately, and “without cause.”27 Subsequently, on June 4, 2021, the TUD Board voted 3-2 to appoint a new interim general manager until the permanent general manager position was filled.28 The TUD board then voted 4-1 on October 26, 2021 to permanently appoint the interim general manager to the general manager position and approve the employment contract.29 The year 2021, however, was not an outlier with respect to turnover in the general manager position. In the decade preceding the publication of this report, TUD employed eight general managers and/or interim general managers.30 Further, the general manager terminated in April 2021 was not the only general manager whose employment contract was terminated by the TUD board during this period. On October 22, 2013, the board voted 3-2 to terminate the then-general manager’s employment contract.31 The 2020-2022 Grand Jury perceived that the turnover in the TUD general manager position—including the termination of two employment contracts in one decade—seemed unusually high; therefore, the Grand Jury commenced an investigation of the actual and perceived impacts of the general manager turnover, with an eye towards developing recommendations to assist the TUD board in future personnel decision-making. The Grand Jury expanded its investigation, based on interviews with TUD board members and employees, to other personnel-related issues, including employee recruitment and retention. To that end, the 2020–2022 Grand Jury requested from TUD, and received, copies of the employment contracts for all general managers and interim general managers that served from 2011–2022. The Grand Jury also conducted multiple interviews with TUD board members and staff to assess the potential impacts of the general manager turnover and develop personnel-related recommendations. Finally, the Grand Jury 27TUD, Special Meeting Minutes, April 1, 2021, available at: https://tuolumne.granicus.com/MinutesViewer.php?view_id=3&clip_id=637. 28TUD, Special Meeting Minutes, June 4, 2021, available at: https://tuolumne.granicus.com/MinutesViewer.php?view_id=3&clip_id=647. 29TUD, Regular Meeting Minutes, October 26, 2021, available at: https://tuolumne.granicus.com/MinutesViewer.php?view_id=3&clip_id=668. 30One individual served as both interim general manager and permanent general manager. One individual served two separate terms as interim general manager. 31TUD, Regular Meeting Minutes, October 22, 2013, available at: http://tuolumne.granicus.com/MinutesViewer.php?view_id=14&clip_id=303. 18 reviewed personnel-related resources and recommendations, including those made available through the California Special Districts Association. Selecting the right candidate is important because it promotes a healthy and productive workplace and lays the foundation for an efficient operation. The Grand Jury’s review of the general manager employment contracts and interviews revealed that frequent termination and turnover of general managers carries both tangible and intangible costs that may negatively impact employees and ratepayers. Tangible costs identified by the Grand Jury included the payment of severance pay and other benefits required to be paid under the applicable general manager employment contract. Intangible costs identified by the Grand Jury include potential damage to employee morale and the reduction in employee productivity due to the trickle-down effects of changes in leadership priorities. The TUD board does not have a board-approved policy that establishes the process for hiring and firing, evaluating the performance of, and adjusting the compensation of the general manager. This recommendation is also identified as a “best practice” by the Special District Leadership Foundation.32 Further, TUD does not have a Board-approved policy promoting the involvement of department managers or other agency employees in the general manager hiring or evaluation process. Many organizations involve subordinate employees, for example, in a “360-degree” review process of executive leadership. This process “bring[s] together insights from a range of coworkers, often illuminat[ing] an executive’s blind spots, and giv[ing] colleagues a way to weigh in on and support the individual’s development.”33 Potential benefits of this process include increased leadership effectiveness, employee retention, customer satisfaction, productivity, and employee engagement.34 TUD employs dedicated and high-performing employees and managerial personnel, several of whom the Grand Jury had the pleasure to meet. The competitiveness of TUD employee compensation was one factor raised by certain interviewees as an important consideration in recruitment and retention. TUD last conducted a comparative evaluation of employee salary and benefit packages (i.e., comparing TUD’s manager and employee compensation to other comparable agencies) in 2020. The Institute for 32See Special District Leadership Foundation, “High Performing District Checklist - Finance and Human Resources,” (January 2018), available at: https://www.sdlf.org/HigherLogic/System/DownloadDocumentFile.ashx?DocumentFileKey=65533859-617 a-b93d-a13a-ab8f8c0cce6f&forceDialog=0. 33Behr, “Getting the Most Out of 360-Degree Reviews,” Harvard Business Review. Nov. 22, 2019, available at:https://hbr.org/2019/11/getting-the-most-out-of-360-degree-reviews. 34Zenger & Folkman, “What Makes a 360-Degree Review Successful?,” Harvard Business Review 2020. https://hbr.org/2020/12/what-makes-a-360-degree-review-successful 19 Local Government recommends that a salary survey should be conducted, at a minimum, every five years and should be made available on the agency’s website.35 After a review of these resources, the 2020–2022 Grand Jury finds and recommends as follows: Findings and Recommendations

Agency Responses 1

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.