Mikolajczyk put VTA back on track http://www.bizjournals.com/sanjose/stories/2008/11/17/daily71.html Local pundits labeled Jerry Mikolajczyk as the “half-million dollar man” when the Santa Clara Valley Transportation Authority brought him in to modernize and give structure to its complex finances.
In reality, his salary was slightly above that: $530,400 for 39 weeks.
That was April 2007. Mikolajczyk’s contract will terminate at year’s end. Once completed he will return to his full-time position as the chief operating officer of a mining exploration company, MineCore International Inc. Those who took the most heat for hiring him say he has left the once beleaguered agency in much better condition.
Mikolajczyk separated the VTA’s funds by business unit to gain better control over expenditures, revamped its cash outflow to maximize interest payments the agency received on its cash reserves, and instituted better controls over its government contracts to ensure payments to the agency weren’t delayed.
As a result of improvements Mikolajczyk implemented, Standard & Poor’s and Fitch credit rating agencies upgraded the VTA.
The VTA hired Mikolajczyk after a report from Philadelphia-based Hay Group Inc. criticized the agency for losing focus on its core businesses; for its unstable and uncertain financial future; and for what it called “systemic” weakness in its financial processes and policies. The VTA had commissioned the report.
The agency’s CFO at the time, Roger Contreras, resigned shortly after the report was released, and the organization began looking for someone to temporarily fill the position.
Surprisingly, Mikolajczyk wasn’t looking for a position when a recruitment firm for the VTA came calling. The firm had worked with Mikolajczyk’s company in the past and thought his skill set and background in construction and management would fit the skills needed for the interim CFO position.
Mikolajczyk said he found the skill level of the VTA staff to be “excellent” across the board. One of the Hay report’s recommendations was to assess the staff and vertically align the departments to make them more streamlined and functional.
“I was able to get the message across quickly that the agenda was not to go in and terminate people, but to use the employees we had and use their skills, and their skill levels are excellent,” he said.
The perception that the VTA was not managed in a fiscally responsible way “is a wrong perception altogether,” he said. He added that the changes he implemented were only part of the Hay Group’s recommendations, and that the board and staff already have implemented or planned to implement many of those changes.
“The biggest thing I want people to walk away with (is) having the confidence that the VTA is a financially viable operation, because that perception wasn’t always there,” Mikolajczyk said. “The big picture is that the VTA is moving forward in a better way than before.”
Michael Burns, the VTA’s general manager, acknowledges that Mikolajczyk’s salary was high for the public sector. But he also said there was a sense of urgency to fill the position to right the weaknesses immediately. Those changes were imperative.
“The report identified a lot of things that are consistent throughout the industry, and we didn’t want to bring someone in to make minor changes around the edges but continue the practices,” Burns said. “We needed the right personality and someone who could make significant changes to the way things had been for 15 years, while at the same time recognizing that we’re a public agency and that they needed to build consensus and teamwork so people would accept the changes.”
Mikolajczyk’s salary “was money very well spent. It paid off in spades,” Burns said.
Mikolajczyk also instituted internal control reviews so that the agency could implement the spirit of the reporting tools demanded of publicly-traded companies under the Sarbanes-Oxley Act.
“He absolutely left things better than he found them,” Burns said. “He also humanized things very well and became a part of the team, so that the fear that people had of someone coming in from the outside and telling them what to do was alleviated.”
Mikolajczyk, who was born and raised in Canada, intends to keep his ties to Silicon Valley. His company, MineCore International Inc., where he is president and COO, focuses on mining sapphires in Madagascar and developing the market for using sapphires along with silicon in the semiconductor industry.
Breene Kerr, a Los Altos Hills town councilman and former mayor who sat on the VTA board, also has joined the board of MineCore International.
Kerr said Mikolajczyk’s tenure should be remembered as the time when the VTA tackled the strategic and tactical areas of its own financial management.
“He helped with strategic financial planning, and he does have some excellent experience in financing projects. And just as importantly, he went from top to bottom and revamped policies and procedures,” Kerr said. “We will save a lot of money on our internal financial operations as a result, which means we have more money to spend on our core mission.”
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