Hearings concerning the section chiefs in the Department of Environmental Protection, were conducted on August 11, 12 and 17, October 3 and 4, 1994. The parties presented documents, examined witnesses and filed post-hearing briefs by June 23, 1995. The State filed a reply brief by December 11, 1996. ^1/ This report and recommended decision, which is the second in the series, concerns the alleged managerial status of section chiefs in the Department of Environmental Protection. ^2/ Based upon the entire record,^3/ I find as follows:

1. The Department of Environmental Protection (DEP) employs about 3,800 employees. DEP is headed by a commissioner who reports to the Governor. Six assistant commissioners report to the

1/ Following hearings, the parties requested we suspend processing of this matter to permit the parties to pursue settlement discussions. Settlement efforts have not been successful, however, and the matter is ripe for a decision.

2/ Hearings concerning section chiefs in the Department of Transportation are continuing.

3/ The transcripts of each successive hearing day shall be referred to as "1T, "2T" and so forth. The parties' joint exhibits shall be referred to as "J-," the Employer's exhibits as "R-," and the Petitioner's exhibits as "P."

2. The Assistant Commissioner for Management and Budget, Ronald Tuminski, supervises the Division of Personnel and the Division of Financial Management and General Services. Assistant Commissioner Lewis Nagy supervises the Division of Science and Research, the Division of Environmental Safety and Analytical Programs, and the Division of Air Quality Management. Assistant Commissioner James Hall supervises the Division of Parks and Forestry, the Division of Green Acres and Recreation, the Division of Fish, Game and Wildlife, and the Division of Engineering and Construction. Assistant Commissioner John Weingart supervises the Office of Permit Assistance and Information, the Office of Pollution Prevention, the Division of Land Use Regulation, the Division of Water Quality, the Division of Hazardous Waste Regulation, the Division of Air Quality Regulation, and the Office of Land and Water Planning. Assistant Commissioner Richard Gimello manages the Office of Environmental Claims Administration, the Division of Responsible Party Site Remediation, and the Division of Publicly Funded Site Remediation. Assistant Commissioner Marlene Dooley manages the Division of Enforcement Field Operations, the Office of Enforcement

4/ In addition to the assistant commissioners, also reporting to the commissioner are the chief of staff, the director of communications and the director of legislative and intergovernmental affairs.

3. Each division or office is headed by a division director. Divisions are composed of bureaus. A cluster of two or three bureaus, called an "element", is headed by an assistant director, also referred to as an administrator (4T94).

Each bureau is headed by a bureau chief, who holds the civil service title "manager 4." Some bureaus are further subdivided into sections. Some sections are supervised by a section chief, the title at issue here. The tables of organization show that section chief positions are found in nearly every division. There are a total of 92 section chief positions, 64 of which are currently filled (R-58 through R-65).

4. Section chiefs supervise professional employees, technical employees and clerical employees. The professional employees are highly specialized environmental and chemical scientists and researchers. All of the employees reporting to section chiefs are currently represented, primarily by CWA, in the State-wide units of professional employees, technical employees, clerical support employees, or supervisors. The levels of subordinate professionals' titles are determined primarily by their experience (J-1, J-2; 1T49).

History of Title

5. In 1984, the Department sought to create a title section chief for the Division of Water Resources, the then largest

Division with about 700 employees (2T12, 2T13, 2T50). The Division intended to give the new section chief title authority to make decisions on granting permits and on seeking reviews from other sections. In addition, the Division sought to have this new position declared "management" so that decisions being made by the section chiefs were made from the public interest, not from the employees' interests (2T102).

6. While the State Department of Personnel (DOP), then known as the Civil Service Commission, approved the title's creation, it initially disagreed over the proposed pay range. DOP created a classification profile for the title using a ratio of know-how and accountability scores (2T99). DEP requested a higher accountability factor -- one in line with the accountability attributed to bureau chiefs -- than civil service was willing to credit. The Department argued that because section chiefs supervise highly technical staff, they should have a higher accountability factor than supervising environmental engineers (2T15).

Typically professionals are promoted up to "supervisory" titles as a way of monetarily rewarding employees. There was a problem with promoting career professionals to supervising environmental specialists at pay range 29 because the professionals under that title are also paid at range 29. The creation of a section chief level between the bureau chiefs and range 29 professionals was intended to cure this inequity (2T110).

Eventually, DOP did grant the Department's request for a pay range 31 designation (2T24). ^5/

7. The Department's use of the section chief title broadened in 1986 after it again reorganized and created new divisions. Some heads of sections then holding supervising environmental specialists titles were reclassified as section chiefs (2T26).

8. Whether a DEP section today is headed by a section chief or a supervising professional title may be by design or by historical accident (3T32). The division director or assistant director decides whether a section chief position is needed to manage the section or whether the employees will report directly to the bureau chief as the "first level of management." That decision is based upon the number and technical sophistication of the staff in the section, and the complexity of the program. Sections of a single unit of less than seven employees are supervised by supervising environmental engineers, whereas sections of multiple units and/or larger numbers of professional/technical staff are headed by section chiefs (2T68-2T69; R-58, R-61).

5/ Assistant Commissioner Tuminski testified that the then division director testified before the civil service hearing officer that the Governor had issued a directive that functions of management be separated from the actual performance of technical and professional work of these particular titles. This is double hearsay and unsubstantiated by other evidence. It is also more than 10 years since the title was initially created. Therefore, I find that this is not relevant to what section chiefs actually do today, nor relevant to the issue of their current managerial status.

The Office of Quality Assurance, which is actually a section level entity, is headed by a section chief who is responsible for certifying and auditing about 900 laboratories that provide data to the Department (3T41-3T42). This Section requires a section chief because of the need to make judgmental decisions on the evaluations of the quality of the laboratories (3T43).

Conversely, the Planning and Compliance Section is not headed by a section chief because the Section has more administrative, routine responsibilities requiring less judgment (1T102).

9. The Certification and Registration Section in the Bureau of Pesticide Operations is headed by a supervising

engineering specialist (4T24). This Section is basically a "paperwork" operation; it reviews and approves applications for pesticide production and application. The section head performs administrative functions and organizes and assigns work to subordinates (4T22).

The Pesticide Evaluation and Monitoring Section is a technical unit which monitors pesticides in the environment, evaluates their impact on people, animals, and the environment (4T25-4T26). Research Scientist I Meyers performs similar responsibilities to other section heads with respect to supervising employees and developing the Section's work plans (4T27-4T29).

General Job Duties

10. Assistant Commissioner Tuminski stated that the Department views the section chiefs as the "first level of management." (2T31). Tuminski described section chiefs' responsibilities as:

...from a managerial standpoint, to direct and have oversight of the operations of...distinct organizational units...the section chief is responsible for planning and organizing and directing the work of the engineers and the specialist assigned to his or her office. They...do detailed work plans of the unit...assign staffs to the various components of that work unit, they would make a determination in terms of how the staff would be arranged...to carry out the work (2T33).

11. Tuminski believed that in some units, section chiefs have authority to make a final decision on permits and site remediation agreements (2T33). Section chiefs have a "level of

12. Gerald Nicholls is the Director of the Division of Environmental Safety, Health and Analytical Programs (DESHAPS), a division under Assistant Commissioner Nagy (1T6). The DESHAPS Division, which was created through a 1990 reorganization, is composed of unique and self-sufficient programs which function independently from one another (1T29, 3T93). The DESHAPS Division is staffed with approximately 248 full-time positions.

Nicholls testified about the duties and responsibilities of the section chiefs assigned within his Division. ^6/ The Division has four elements, each headed by an assistant director, and includes 11 bureaus (1T59). Nicholls manages and coordinates the elements within his Division (R-66, p. 4).

13. Allan Edwards, assistant director under Nicholls, heads the Release Prevention Element, which includes the Bureau of Hazardous Substances Information, the Bureau of Release Prevention and the Bureau of Discharge Prevention (R-66, p. 4; 1T30-1T32).

The mission of the Release Prevention Element is to identify the risks posed by the use and storage of hazardous

6/ The parties stipulated that testimony of Nicholls and the section chiefs called as witnesses, and documents placed into evidence, would be representative of the duties and responsibilities of all section chiefs in the Department (State brief at p. 35).

Discharge Prevention Bureau

14. The Discharge Prevention Bureau has two sections: Engineering Review and Field Verification. Each Section is headed by a section chief, reporting to Bureau Chief Robert Kotch (1T38; R-66, pp. 48, 53). The Engineering Review Section reviews the discharge prevention, containment and countermeasure plans submitted by members of the regulated community. The Field Verification Section inspects those facilities for compliance with their plans.

This Bureau operates a new program (1T63). When this program first went into effect, the Bureau had to decide how to prioritize the review and approval process of the facility plans. This decision was made by the bureau chief with input from the two section chiefs. The decision was ultimately based on the relative risks to the environment; it was decided that the largest facilities or those handling the most hazardous substances would be evaluated first (4T39). Both section chiefs under this Bureau were initially involved with developing the blueprint for submission dates of facility plans (1T55-1T58). They will continue to plan for future facilities safety testing (1T55).

In addition, when the program was starting in 1993, the section chiefs were involved in resolving the complex technical issues needed to get the program implemented within a one-year target date (1T66-1T67). One such issue which needed resolution involved integrity testing of storage tanks to safely store hazardous products (1T67). In considering the range of testing which could be required of the regulated industry, consideration had to be given to expense and delay. The section chiefs made recommendations to the bureau chief over the type and stringency of the tests. The recommendations were accepted and the regulations were approved by Director Nicholls (1T68, 4T52).

15. There are between 800 and 1,000 regulated facilities which must submit plans to show how they would prevent or contain a release of hazardous substances into the State's waters and lands (1T39, 4T34). The plans must be reviewed and reapproved every three years, and include such specifics as booming capabilities, illumination requirements, leak detection, monitoring, emergency response, and containment procedures (1T43, 1T45). The types of regulated facilities include oil pipelines and storage facilities, vehicles, ships, and vessels which either hold or transfer hazardous substances (1T45). In the event of a discharge emergency, this unit also supports the Site Remediation Bureau's emergency responders (1T42).

16. Beth Reddy, a research scientist I,^7/ is acting as

7/ The research scientist I title is represented by CWA.

Reddy prioritizes and assigns facility plans to the engineering staff for review (1T52). In conducting the plans review, the staff is guided by established criteria as detailed in the Standard Operating Procedures (SOPs) and written guidelines. Reddy developed these SOPs and guidelines and the bureau chief approved them (4T35, 4T37). She is called upon to resolve disputes over the interpretation of the departmental requirements (1T44, 1T47). For example, one major issue facing this group involved the interpretation of what constituted an adequate facility map (1T47). Another issue arose over what constitutes permeable materials for a dike (1T48).

The section chief can overrule a judgment decision by one of the engineers. The section chief is responsible for consistency and continuity of the section's interpretations in reviewing a variety of facilities plans (1T51). When the facility's plan is to be approved, the bureau chief signs the approval letter based upon recommendations from the section chief (4T37).

In addition to the SOPs, Reddy has developed other policy documents for the bureau chief's approval. An example of the kinds

of documents Reddy prepared and, after approval, implemented is a document entitled "Financial Responsibility" which sets forth requirements for regulated facilities to demonstrate that they can clean up hazardous substance spills and restore the facility using their own financial resources (R-72; 1T77). Another such policy statement Reddy developed and, after approval, implemented is entitled "Tank Car/Truck Loading/Unloading Areas." This policy statement sets parameters for regulated facilities to transfer hazardous substances from vehicle to tank car (R-73). Reddy was asked to develop and implement this procedure, but to make certain it was done without undue financial burdens to the regulated industry (1T78-1T79).

17. The Field Verification Section performs field inspections to verify compliance with the plans the facilities have submitted (1T61). It also identifies regulated companies that failed to submit plans for approval and verification (1T62). Departmental regulations require facilities in the program to be audited annually.

Darryl Jennus is the section chief of the Field Verification Section (R-66; 1T62). He sets policies regarding inspections and develops checklists and SOPs for his Section (1T62-1T63). The SOP that details the procedures for the Section's annual audit of facilities was developed by Jennus and recommended to the bureau chief, who approved it (1T62-1T63).

Jennus prioritizes, assigns and reviews audit cases to the professional staff in his Section (1T63). Like Reddy, Jennus exercises judgment to interpret departmental regulations. Jennus reviews and approves reports of field inspections conducted by his staff; most reports are not required to be approved higher up unless the facility is complex, out of conformity with the plan submitted, or if the facility is also regulated under another program (1T74, 4T54).

Jennus also assigns staff as project managers to work with consultants contracted for a particular project. Jennus reviews the consultant's progress with the project manager (4T101). For example, the Field Verification Section oversaw a pipeline safety study performed by outside contractors. Based upon the study results, Jennus recommended, through his bureau chief to the division director that further administrative regulation of pipelines was unnecessary. That recommendation has not been acted upon because of a gas pipeline explosion in Edison (R-66, p. 46; 1T70, 4T49-4T50).

Bureau of Release Prevention

18. The mission of this Bureau is to administer the New Jersey Toxic Catastrophe Prevention Act (TCPA) by insuring that facilities that store hazardous substances are prepared to prevent the release of these substances and to respond to emergencies (R-66). About 140 facilities covered by the TCPA are required to submit risk management plans detailing how the facilities manage the

risks involved in storing and handling hazardous substances (R-66; 6T32-6T33).

The Bureau of Release Prevention contains two sections: the Risk Management Section, headed by a section chief, and the Planning and Compliance Section, headed by a supervising environmental specialist (R-66, p. 53). ^8/

19. The Risk Management Section evaluates the regulated facilities' processes, recommends risk reduction measures, and verifies the facilities' plans to reduce risk. The purpose of the program is to prevent an incident at a facility that would cause death or severe harm to people living in the area.

The Risk Management Section chief is Reginald Baldini, although Baldini has also been acting as the bureau chief of the Release Prevention Bureau for the last four years. The Risk Management Section employs high level professional staff, including eight chemical safety engineers (4T55). The section chief assigns the work to the staff, evaluates their subordinates' performance, prepares work plans, and has some input into personnel decisions (4T58).

20. The SOPs for the Risk Management program (R-75, R-76, R-77, R-78) were developed by former Section Chief McCue and approved by the bureau chief (4T60). They include checklists for

8/ The Planning and Compliance Section manages data bases containing parameters of toxic materials present at the site. It does modeling to determine the extent of risk factors and potential effects on a community (1T99).

Bureau of Pesticide Control

21. The Bureau of Pesticide Control employs one section chief (3T12, R-66, p. 27). Pesticide Control implements federal and State regulations regarding the use of pesticides in agricultural, commercial and residential settings in the State (3T13). The Bureau is responsible for registering pesticide products and licensing applicators. It investigates complaints and inspects to assure compliance with the State and federal laws (3T13). There is an SOP which details the criteria for writing a violation notice against a member of the regulated community (3T98-3T99).

The Bureau is divided into two geographic regions: the southern region is headed by Section Chief Robert Kosinski, who reports to Bureau Chief J. Orrok, who reports to Assistant Director

of the Pesticide Control Program, R. Ferrarin (R-66, p. 23, R-66, p. 27; 3T13, 3T21). The northern region is headed by a supervising professional. ^9/

Pesticide Control is an enforcement program which handles judgemental, technical issues, for example, a recent bee kill involving the use of pesticides required an investigation by the southern region (3T17-3T18).

22. Section Chief Kosinski does not typically do routine inspections. He handles problem cases involving deaths and longstanding complaints (3T23-3T24). He also conducts enforcement conferences, which involve clients who have been cited as having violated the Department's regulations. The enforcement conference provides the client with an opportunity to argue for a penalty reduction (3T26). The section chief has no authority to reduce the penalty, but he may recommend a reduction to the enforcement group under Assistant Commissioner Dooley (3T26).

23. Kosinski is also responsible for the on-the-job training of new staff members and assigns work to his staff. The section chief is also in charge of preparing SOPs for the operations of the building in which the facility is housed (3T28).

9/ The southern region is managed by a section chief because of the complexity of pesticides in the southern region, which is more agricultural, making the level of decision-making greater (3T14).

24. The Bureau of Water Monitoring is in the Division of Science and Research (R-58, R-61; 5T7, 5T12). This Bureau has two sections: Laboratory Operations, headed by Section Chief Korndoerfer, and Field Operations, headed by Section Chief William Honachefsky. Honachefsky has headed that Section since 1982, first as a supervising environmental engineer and more recently as a section chief (5T6). Honachefsky reports to a bureau chief of Water Monitoring, which is currently a vacant position; Korndoerfer and Honachefsky alternately act as bureau chief (5T6, 5T8, 5T29).

25. The Bureau of Water Monitoring is a support unit which provides water-related scientific information for other departmental programs (5T13). Korndoerfer's Section does biological monitoring; Honachefsky's Section does chemical monitoring (5T15-5T16). Honachefsky's Section includes a lakes management unit and a support service unit.

Lakes management group operates the federal Environmental Protection Agency (EPA) Clean Lakes program. Owen Cann, a supervising engineering specialist in the Lakes unit, compiles and ranks eligible public lakes which meet the EPA application criteria for the Clean Lakes grant program. Grant applications do not require section chief approval because regulations are so straightforward (5T19). EPA decides which grant applications to approve (5T19). The Clean Lakes unit then oversees expenditures of the grant money by the receiving municipality and Cann acts as the project manager (5T20). The section chief then approves work

performed and recommends approval of a voucher for reimbursement to the municipality (5T20-5T21). The voucher must be signed off by Honachefsky, the administrator, the division director and the assistant commissioner (5T20-5T21).

The Clean Lakes unit also responds to public inquiries about water quality and collects water samples from the field (5T22).

Honachefsky's section includes two units: one with five environmental specialists, and one with four environmental specialists. Korndoerfer also supervises a section with two units of five and four professional employees respectively (P-5).

26. P-6 describes Honachefsky's responsibilities as:

...plan, organize, direct, supervise and assign technical and administrative work for the field operations section.

Complete and implement the section's work plan.

Direct the development and implementation of coordinated monitoring program and water quality database.


The "coordinated monitoring" referred to in Honachefsky's job description involves consistency following federal, State and USGS regulations and guidelines for collecting and preserving samples (5T28).

27. Honachefsky decides daily how to most effectively use his staff to accomplish the Section's objectives (5T24). He meets with his two supervising environmental engineers early in the year to allocate staff to each program (5T24). New objectives are set by the bureau chief, or in his absence, the administrator (5T25).

Both section chiefs formulate work plans for their respective Sections. After he develops his work plan, Honachefsky submits it to the bureau chief, and it is consolidated with others and sent up the chain of command to the EPA for approval (5T26). The work plan may indicate a shortage in needed staff to complete the tasks required. These "shortfalls" have been reported in past work plans, but have not resulted in increased staffing (5T27).

Bureau of Engineering

28. The Bureau of Engineering North is a Bureau in the Division of Water Quality (P-11; R-63). Engineering North has two sections: Construction and Control, and Design. Construction and Control is headed by Section Chief Arthur Zoda, while the Design Section is headed by Section Chief S. Ahmad (R-63). ^10/ Zoda reports to Bureau Chief Stanley Cach (R-63).

29. The Bureau of Engineering supervises a program which grants municipalities low interest loans to upgrade their waste water treatment facilities. A municipality first submits its application to the Bureau of Administration and Management, where it is checked administratively (R-63; 5T92). The application is then given to the Engineering Bureau Design Section, which subcontracts with consultants to complete a facility plan (5T127).

30. Section Chief Zoda recommends approval of the consultant's plan to the bureau chief, and authorizes

10/ Zoda testified that the Bureau of Engineering South performs identical functions as the northern region (5T141).

Zoda receives a construction package from his bureau chief and assigns the projects among his five engineers in his Section based upon their workload and expertise (5T94). The assigned engineer follows the project through to completion, following the SOP, which controls all procedures from authorization award to final inspection (5T94, 5T96).

The assigned engineer conducts a pre-construction conference with the construction inspector to review federal and State regulations of the loan program (5T95). Once the contractor starts the project, interim inspections are performed (5T96). The assigned engineer will try to resolve any disputes at the job site. If the engineer cannot resolve a problem, he refers it to Zoda particularly when changes to the job plan are involved (J-12; 5T96, 5T102). Change orders must be authorized by the bureau chief (5T96). The Department's role in that dispute, which is between the owner and the construction contractor, is limited to whether the State will agree to participate in the additional funding of the change order (5T97). Upon completion of the job, Zoda's subordinate performs a final inspection and prepares an inspection report, which must be signed by the bureau chief (5T97-5T98).

31. Zoda's job description (P-12) states that this section chief "manages and directs efforts of construction engineers to

monitor steps in the projects during pre-construction contract periods" (P-12). Zoda ensures that engineers stay on track with the bidding process because State regulations require that the bid must be awarded within 60 days (5T100).

The job description further states that the section chief "directs the program to insure that bids received by the [lender] ^11/ are reviewed and the award is made in accordance with federal and State requirements." Federal and State guidelines to review bids are very detailed and specific. Requirements are detailed further in checklists contained in the SOPs (5T101). Zoda makes sure the engineers adhere to those guidelines (5T101).

Construction inspectors submit daily reports on the quality of construction to Zoda (5T105). Zoda ensures that the operation plan and maintenance manuals are reviewed for conformity with federal requirements. The operation plan shows how the facility, once completed, will be operated and maintained (5T106). Guidelines for its review are also set forth in an SOP (5T106). Zoda also assigns engineers to handle citizen inquiries during construction and recommends responses to the bureau chief (5T106-5T107).

Section Chief Zoda coordinates with the Design Section when necessary to remedy construction complications without unnecessary expense (5T108, 5T132-5T133).

11/ Zoda testified that the references in the job description to grants to municipalities should have been changed to refer loans to municipalities.

32. Section chiefs interview candidates for vacant positions in their sections and make recommendations to the bureau chief or administrator. Hiring decisions require final approval by the division director (5T41, 5T76-5T77). Section Chief Reddy has interviewed applicants for engineering trainee positions along with the bureau chief and a senior staff member. The division director made the final selection (4T40). Zoda also interviews and recommends candidates for hiring to the bureau chief (5T112).

Promotion, Discipline

33. A section chief can recommend that a subordinate be promoted (1T83, 5T145, 5T147). Such a recommendation would be made to the bureau chief, who would recommend up the chain of command (1T81). The section chiefs' recommendations are sometimes followed and sometimes rejected.

Departmental policies control the disciplinary process (P-42; 5T41). Section chiefs can initiate employee discipline by making a recommendation through the bureau chief up the chain of command to the director (5T126, 5T113, 5T123, 5T41, 5T78). Honachefsky's only recommendation for employee discipline was rejected by the director (5T79).

Evaluations

34. Section chiefs are responsible for insuring that employees in their sections are given Performance Assessment Review (PAR) evaluations (1T84). Reddy evaluates her staff and signs their

PAR evaluations (4T41). Honachefsky prepares PAR evaluations for the supervising environmental specialists (5T30). Zoda prepares a PAR for all employees in his section (5T112).

Assignments

35. Section chiefs are responsible for assigning work to their section's staff. Reddy prioritizes, assigns and reviews the work of her subordinates (4T41). She reviews their work for consistency in applying the regulations (4T42).

Section Chief Honachefsky assigns work to each of the units in his Section. The supervising environmental specialists, who supervise each unit, make specific assignments to individuals in their respective units (5T43, 5T60).

Honachefsky has determined that the staff members in his Section will spend 80-90% of their time in the field. Honachefsky has included this factor in the criteria for staff evaluations (5T66-5T67).

Section Chief Honachefsky has an agreement with Section Chief Korndoerfer to borrow his staff for water sampling when necessary (5T44). At the time of the hearing, the staff from both sections were involved in a three-day water sampling event at the Whippany watershed, which was approved by the administrator (5T46-5T47).

Leave Time

36. Section chiefs approve sick and vacation leave requests (5T139). Planned overtime is approved by the bureau chief; incidental overtime can be approved by the section chief (1T94).

Staffing

37. Section chiefs have no control over staffing levels within their sections. They may only assign existing staff as appropriate (1T87).

Additional staffing requests must be approved by DEP's personnel office and by the Office of Management and Budget (4T21).

In some programs, the level of staffing is dependent upon revenues from fees and federal grants (4T16). For instance, the Office of Quality Assurance is about half the size it should be to meet requirements because fees have not been raised in some time (4T64). In the pesticide program, fees have been held stable for the last four years, and consequently, so have staffing levels (4T16-4T19).

Staffing levels of the Release Prevention Bureau were initially decided by the bureau chief when the Bureau was first created. This Bureau has many vacant positions because of the uncertainty of client population (4T31-4T32). The assistant division director recommended that the positions be included in the organizational structure, but left unfilled until the client levels stabilized (4T32).

Honachefsky has not recommended changes in staffing levels for his unit (5T87). Zoda has not been asked for recommendations concerning staffing levels (5T123).

Reductions in Force

38. The State Department of Personnel recently directed layoffs in the DEP. Nicholls made recommendations for staff cuts within his Division to Tuminski and OMB after talking to his assistant directors. ^12/ His recommendations were based upon an analysis by consequence. Section chiefs were not asked for input into which positions should be cut from the organization (1T82). The commissioner ultimately decided the number and location of staff cuts (4T78).

Equipment/Supplies

39. The senior section professional staff assign the vehicles with the approval of the section chief and the bureau chief (1T95).

Some of Honachefsky's staff are assigned State cars, others share pool cars (5T67-5T68). Honachefsky makes the decisions on vehicle allocations, based upon Treasury Department criteria (5T69).

Requests for equipment and supply purchases can come from the professional staff to the section chiefs for submission to the bureau chief (5T85). Section chiefs have no authority to commit agency funding. All purchase orders must be submitted up the chain of command to the division directors for approval (1T87). Zoda can recommend purchase of minor items such as work boots and hard hats (5T114). He has not been asked for input in budget preparation (5T114).

12/ Nicholls testified that the assistant director told him that some section chiefs had some input into the decision (4T104). This is uncorroborated hearsay and I do not credit it.

40. The Department's administrative regulations are expanded and modified on a regular basis. There is a 19-step process for approval of regulations, which is outlined in a procedures memorandum (P-2). Anyone can suggest a rule change, but the suggestion must be brought up the chain of command through the section chief and bureau chief to the division director. If the division director agrees, a "launch meeting" occurs to start the formal process (3T77).

Occasionally, Honachefsky is asked to comment about proposed changes in regulations and their impact on day-to-day operations in his Section. He responds with written comments to the bureau chief (5T29, 5T64).

User Fees and Federal Grants

41. Recommendations about increasing user fees may come from the program itself or from the budget office. The commissioner must approve all user fee increases (3T65-3T66).

Grants

42. The decision on whether to apply for certain federal grants can be made at the program level. If the program decides to apply, then approval by financial management staff is necessary to insure that matching funding will be available and that the money expended is consistent with the Department's overall mission (3T68). The commissioner has final authority on the application of grants (3T68).

Budgeting

43. The budget preparation process is centralized in Division Director Tuminski's office (1T87).

Nicholls estimated that the budget for his division is about $21 million. The process of formulating the budget begins with Policy and Planning Director Jim Johnson meeting with management staff (division directors, assistant directors and bureau chiefs) to provide information on target revenues and expenditures. Nicholls discusses anticipated revenues with members of his staff (3T58). Nicholls' Division is currently struggling with a $300,000 shortfall and Johnson is meeting with Nicholls and members of his staff to develop plans to recoup those funds (3T58).

Nicholls has discretion to make adjustments in expenditures, e.g ., to move money from consultant accounts to salary accounts (3T58). He may seek recommendations from his assistant directors concerning such issues (3T62). Section chiefs are only involved in this process if they are filling in for a bureau chief. Zoda has not been asked for budget recommendations (5T114). Section Chief Honachefsky has minimal input into the budget process: he is annually asked about replacement equipment and supplies, such as scientific equipment. That request goes to the bureau chief or, in his absence, the administrator (5T31).

Work Plans

44. All heads of sections prepare work plans. The work plan details and prioritizes the anticipated work for the coming

year (5T115). The work plan submitted by the section head to the bureau chief is merged with work plans by other sections, then other bureaus, to form a consolidated departmental work plan (5T63). A work plan is submitted as part of the EPA grant application. After the EPA approves the work plan, it goes back to the assistant commissioner to sign. The grant is managed by project activity codes listed on time sheets, which is submitted periodically to Tuminski's office, who submits it to EPA for reimbursement (4T25, 4T7).

45. Section Chief Zoda's work plan has never been modified by his superiors, although it could be (5T121). If the section chief needs to change an approved work plan, the section chief must obtain permission from the bureau chief or higher level of authority (5T62).

The section chief is responsible for assuring that the section meets the work commitments as set forth in the work plan. For example, if the work plan proposes to complete 12 inspections in the year, the section chief is expected to meet that commitment (5T30, 5T114-5T115).

46. Because of resource limitations, the Department ordinarily cannot meet all of the federal EPA requirements. As EPA regulations change, the Department must reevaluate its own programs. For instance, if the EPA changes its regulations regarding farm worker protection in the use of pesticides, the DEP would conduct a review to decide whether it should allocate

additional resources or modify its program. While the assistant division director would be responsible for coordinating such a review within his program, the decision would be a collegial process involving the assistant director, the bureau chief, and the section heads (4T8-4T12).

Policy Committee

47. PIT, the Program Improvement Team, is a management committee in the Division of Water Quality. PIT is developing procedures for recommending and approving policies on issues of general concern to the Division. P-13 is the first of a series of policy memoranda formulated by PIT and signed by Division Director Dennis Hart for all Division units. This first PIT memo, issued May 31, 1994, establishes that, "...management will refer to the director, all assistant directors and bureau chiefs in the Division [of Water Quality]" (P-13). It describes the procedure for recommending subjects for division policy by employees, namely, that the PIT committee will discuss and draft policy statements for comment by employees, and then to the director for his approval (P-13).

Monthly Reports

48. Each section chief submits a monthly report to the bureau chief. The bureau chief consolidates the monthly reports and forwards a consolidated report to the assistant division director. The assistant directors send monthly reports to their directors. They also send the directors weekly memos on "hot topics." The

director consolidates their memos and sends a weekly report to the assistant commissioner (3T87). Eventually, it becomes part of the DEP Department report to the Governor (5T73-5T74).

Hot items have included such issues as inquiries from elected officials and high levels of mercury found in fish tissue (5T35-5T36).

SOPs

49. The SOPs generally refer to statements or manuals which detail and interpret the standards as set forth in the administrative regulations (4T43). A bureau chief must sign off on all SOPs (4T48).

In the Engineering Bureau, SOPs were prepared by a committee of the bureau chief and the section heads (who were then supervising environmental engineers) (5T128). Subordinate engineers also assisted in developing the SOP manual (5T129). The task of updating the manual has been delegated to the engineers, and their suggested changes must be approved by the section chief and the bureau chief (5T130).

The Risk Management Bureau's SOP "financial responsibility for regulated community facilities" (R-72), sets specific standards a facility must meet to be deemed financially responsible (4T43). In the Release Prevention Bureau, R-73 is the SOP interpreting the regulations for loading and unloading tank trucks (4T44-4T45), which was developed by Section Chiefs Jennus and Reddy (4T47).

The SOPs detailing the process for annually auditing the facilities to insure ongoing compliance with the regulations is being created. The SOP used by the Bureau of Release Prevention (R-76) sets up the procedural structure for assuring compliance with the regulations (4T61, 4T62).

Staff Meetings/Policy Meetings

50. The assistant commissioners hold weekly "management team meetings" with the division directors to discuss hot issues (3T45-3T47). For instance, the management team recently discussed how to approach a problem with a contaminated well field and the community's reaction. Another hot issue involved broadening the use of a new voluntary dispute resolution process created to settle enforcement disputes without litigation (3T50). The team also recently discussed the Department's inability to sell two State-operated marinas (3T52), and the format for the monthly reports the Department sends to the Governor (3T53).

51. Assistant Commissioner Nagy also meets with his "senior staff," which includes division directors, directors and the administrative staff from the Budget and Personnel Office to discuss budget preparation, fiscal account balances, and anticipated financial difficulties. These meetings involve issues of concern to the divisions. Recent discussions in Assistant Commissioner Nagy's management team meetings have involved mercury levels in fish and administrative items such as salary increases (3T55-3T56).

The directors also update the assistant commissioner on issues arising in their divisions. For example, recent discussions have focused on pending regulatory changes, safety drills at nuclear power plants, enhanced inspections and a program with the air quality management group (3T70). Other than the exchange of information, these meetings often produce discussions which result in decisions being made on how to handle issues of the moment. For instance, one discussion held recently was about the appropriate extent of the agency's involvement in a controversy over the siting of a proposed storage facility for Oyster Creek's used nuclear fuel (3T71-3T72). Another issue discussed was whether Nicholls' Division should protest a negative federal evaluation of its emergency response team's accident drill (3T73).

52. In addition to the "management team" meetings, Nicholls also meets frequently with his assistant directors, both collectively and individually, to discuss their programs (3T80). In these meetings, decisions are made on the management of resources, such as how to allocate remaining vehicles after a recall; how to reallocate money to cover a necessary expense; and issues surrounding the recent reduction in staffing.

Nicholls holds quarterly staff meetings with his Division's assistant directors and bureau chiefs in each element to review their programs (3T80, 3T85). Section Chief Honachefsky only attends these meetings with management when he is acting as the bureau chief (5T37). These staff meetings are more informational in nature

(3T85-3T86). The discussion at two recent staff meetings focused on budget initiatives the commissioner seeks to implement, which would include all fees and all programs in the general departmental fund (P-3, P-4; 4T82). In separate meetings with his assistant directors, programmatic decisions are made. Examples of such decisions include a strategy to approach an assistant commissioner on a regulation package, use of resources within the program, whether to do a presentation before a particular board, whether EPA funding is adequate to cover expenses for its requirements, and if not, whether to protest to the EPA.

Section Chief Honachefsky meets with his staff biweekly to solicit comments about the general operations and to relay policy decisions from the administrator (5T37). Section Chief Zoda's bureau chief occasionally meets with his section chiefs to dispense information (5T116).

The Act defines managerial executives as:

...persons who formulate management policies and practices, and persons who are charged with the responsibility of directing the effectuation of such management policies and practices....

N.J.S.A. 34:13A-3(f).


In Borough of Montvale , P.E.R.C. No. 81-52, 6 NJPER 507 ( & 11259 1980), the Commission discussed its standards for determining whether an employee formulates or directs the effectuation of policy within the statutory definition. It stated:

a person formulates policies when he develops a particular set of objectives designed to further the mission of the governmental unit and when he selects a course of action from among available alternatives[;]

directs...the effectuation of policy when he is charged with developing the methods, means and extent of reaching a policy objective and thus oversees or coordinates policy implementation by line supervisors...,[and,]

...possess[es] and exercise[es] a level of
authority and independent judgment sufficient to affect broadly the organization's purpose or its means of effectuation of these purposes...
6 NJPER at 508, 509.


The Commission also added that the determination should focus upon the interrelationship of three factors:

"...(1) the relative position of that employee in his employer's hierarchy; (2) his functions and responsibilities; and (3) the extent of discretion he exercises..."

6 NJPER at 509.


Recently, however, in N.J. Tpk. Auth. and PERC and AFSCME, P.E.R.C. No. 94-24, 19 NJPER 461 (& 24218 1993), rev'd and rem'd 289 N.J. Super. 23 (App. Div. 1996), certif. granted N.J. (1996) [22 NJPER 114 ( & 27060 App. Div. 1996)], the Appellate Division found that the Commission misconstrued the statutory definition of

First, the Appellate Division approved that part of the Montvale test which defines "formulating" and "directing" policies, but added "practices." Second, the Court observed that a managerial executive "need not formulate policies and practices and be responsible for directing the effectuation of policies and practices. One or the other is sufficient." 289 N.J. Super. 36.

Third, the Appellate Division noted that "...the term 'formulate' is not the equivalent of 'adopt' and would seem to encompass the responsibility for recommending policies and practices, particularly where the manager's recommendations form a key component of the ultimate determination." 289 N.J. Super. 36.

However, the Court specifically rejected part three of the Montvale standard, requiring a managerial executive to "possess and exercise a level of authority and independent judgment sufficient to affect broadly the organization's purposes or its means of effectuation of these purposes." The Court said,

It is not only agency heads and their directors, i.e ., the top level managers who possess the necessary statutory qualities. There is nothing in the definition of managerial executive which excludes middle level managers from its scope if those employees possess the necessary qualities....Whether or not an employee is a high level manager and whether or not what he or she does broadly affects the agency are not dispositive. 289 N.J. Super. 35.

Applying the statutory definition and the standards as set forth in Turnpike, I find as follows:

Position in the Hierarchy

The section chiefs are the sixth level in the Department's hierarchy. They supervise sections of small groups of highly skilled scientific, engineering and research professionals, technicians and support personnel. The CWA argues that the section chiefs are functionally the first or second-level supervisors of their sections. The facts show that section chiefs do organize, prioritize, assign, and review the work of their sections' subordinates. They supervise and evaluate the section employees, and make personnel recommendations. They are low-level supervisors over the employees in their sections, most of whom are highly skilled chemical and biological scientists.

However, the Appellate Division noted in Turnpike that, while position in the hierarchy is an appropriate factor, one need not be a higher level manager to be considered a managerial executive. Rather, the Court instructed us to look at whether the employees possess the necessary qualities. 289 N.J. Super . 35. The Court distinguished between "on-line supervisors" -- those who are authorized to hire, fire, discipline or effectively recommend --

with "middle-level managers," who may have managerial authority. The former has been given a statutory right to organize and negotiate collectively, while managers must be considered "part of the management team" and therefore, cannot be union members as well. 289 N.J. Super. 34.

Therefore, looking at the section chief's relative position in the hierarchy, I am not persuaded to view these employees as managerial executives. While first-level supervisors would not ordinarily be expected to be considered managerial, nothing in the statute provides that the terms are mutually exclusive. The other parts of the test must also be considered.

Policy Formulation

Section chiefs do not adopt policy. Major policy issues are discussed by the "management team" in staff meetings which do not include the section chiefs. Policies discussed at these meetings include "hot topics," such as rate fees, community concerns, a dispute resolution program, regulatory changes and specific programmatic concerns, such as mercury levels in fish, nuclear plant drills and contaminated wells. Section chiefs were not involved in adopting policies on any of these major issues, nor did they have any input.

However, section chiefs have had significant input into formulating certain Department policies and procedures affecting their own programs. For instance, the Engineering Review section chief in the Discharge Release Bureau developed and recommended a

financial responsibility policy requiring each regulated facility to demonstrate it has the financial resources to clean up a spill. This section chief also recommended a policy regulating the safe transfer of materials from tanks to trucks. Although these policies were approved by the bureau chief, it was the section chief who developed and recommended them.

The Field Verification section chief developed a policy regarding annual inspections of the regulated facilities. Section Chiefs Jennus and Reddy together developed and recommended a policy on integrity testing of storage tanks, which was also approved. Section Chief Jennus recommended a policy about further regulation of gas pipelines based upon the consultant's report.

While these examples of section chiefs' input into policy development all required a bureau chief or higher to sign off on the policy, under Turnpike , final responsibility for policy approval is not the critical factor. 289 N.J. Super. 33.

Policy/Procedure Effectuation

Section chiefs are responsible for implementing policies by developing SOPs, procedural outlines, and checklists for their sections. These SOPs detail the criteria for regulating the community. These SOPs have been approved by the bureau chiefs.

Section chiefs also occasionally substitute for the bureau chief in his or her absence. Honachefsky and Korndoerfer take turns substituting for the bureau chief.

Extent of Discretion

Subject to "sign off" approval by the bureau chief, section chiefs have discretion to implement policy by taking positive or negative actions against the regulated community. They may sign off on inspections, approve permits, conduct on-site conferences with the parties to resolve disputes, and recommend enforcement settlements.

Susan Wood Osborn
Hearing Officer


DATED: March 7, 1997
Trenton, New Jersey