The Price of Political Failure

The Detroit News launched a hit piece on Michael G. Ford, the CEO of the Regional Transportation Authority of Southeastern Michigan this morning. Reporters Robert Snell and Christine MacDonald breathlessly review Mr. Ford’s expense accounting and employment contract details over the 33 months since he was appointed CEO of the RTA.

The closest they get to finding any real improprieties is Mr. Ford’s car allowance and mileage reimbursement, but that does not stop them from reporting salacious details of hotel room charges and his very generous employment contract. No illegality or budget overruns are found, but the tone of the article is supremely negative. Mr. Ford’s contract happens to be up for renewal and the RTA Board tabled a $ 16,300 raise for him two weeks ago.

A special meeting of the RTA Board of Directors was held this morning, including a closed session. Public bodies operating under the Open Meetings Act are only allowed to close meetings when deliberating personnel matters and contracts. It is not much of a leap to speculate that Mr. Ford is today’s main course at the RTA Board meeting.

The Detroit News duo filed an FOIA request for Mr. Ford’s contract details and expense reimbursements shortly after Paul Hillegonds, Governor Rick Snyder’s appointee to the RTA Board, began reviewing Mr. Ford’s expenses. Coincidence? Hardly.

What is going on here?

Mr. Ford is being fitted up for dismissal after the RTA millage went down to defeat on November 8th. Southeastern Michigan’s movers and shakers had a lot invested in that millage’s passage and the unsatisfactory outcome clearly rankles them. The Detroit Regional Chamber applied the hard sell at their 2016 Mackinac Conference and then put upwards of $ 6 million into an ‘information campaign’ before the vote.  Both the Detroit News and The Detroit Free Press endorsed the RTA millage.  A fit of pique, perhaps?

A successful $ 3.3 billion RTA millage was the sine qua non to divert another $ 1.3 billion from road taxes. A tidal wave of contracts would have been unleashed whose vig would support a lot of year end bonuses for those movers and shakers.  It didn’t matter that you could buy every RTA rider a new car and pay all the related expenses for this kind of money.

Now, the movers and shakers have to wait until 2018, if ever, to get the $ 4.6 billion gravy train rolling.

Mr Ford was hired as CEO of RTA precisely because he had brought in fresh millage dollars at the Ann Arbor Transportation Authority. He persuaded 70 percent of their voters (in Ann Arbor, Ypsilanti and Ypsilanti Township) to approve a new 0.7 mill property tax to fund the AATA in May 2014. But his golden touch failed on November 8th. Probably the zeitgeist on November 8th, but the Southeastern Michigan movers and shakers are taking no chances. They have a lot on the line here.

The RTA millage defeat strands the three mile M-1, ‘QLine’ rail system to nowhere on Woodward Avenue in Detroit. This is quite ironic, since federal funds for the QLine were predicated on the creation of the RTA. Movers and shakers expected to turn this $ 187 million white elephant over to RTA in 2022, but this can’t happen if RTA doesn’t have millage funding. RTA’s finances are so precarious they had to cancel the RTA Board of Directors Retreat next Wednesday. Administrative state perks like this only get canceled when a financial abyss beckons. Could RTA be headed for bankruptcy? At best we are looking at another Detroit People Mover here.

The M-1 rail line is expected to cost $ 5 million or more to operate annually, but like most such government estimates this one is certainly low balled. Messers. Ilitch, Penske, and Gilbert clearly want to get out from under M-1 before it collapses financially, but their Plan B is a Tax Increment Financing district in Detroit. Their Plan C is turning the white elephant over to DDoT directly. Plan C is not without some humor. Detroit abandoned the street railway business back in 1956 as uneconomical, when Detroit was a real city. Plans B & C are more than a little bit shaky, given that the City of Detroit has a $ 491 million pension black hole to fill in 2024. Tax dollars are going to be in very short supply in Detroit throughout the next decade.

So Michael Ford has to go. His contract is a total non issue. The RTA Board approved it in May 2014; they signed off on it. The attack on his expenses is ridiculous. His expense spending at RTA is little different from his past expense spending at AATA. Five day conferences requiring $ 500 a night hotel rooms are a staple of the administrative state. A $ 10,000 car allowance for the CEO of a mass transit operation? The administrative state worships at the feet of Franz Kafka. Why government delivers much less than we pay for and far more than we need.

Mr. Ford clearly ignored subtle hints to resign, so he is getting the modern version of the ‘bums rush’.

Will replacing Mr. Ford guarantee a successful RTA millage in 2018? Probably not. Paul Hillegonds is the most likely successor. He was a Republican West Michigan state legislator before he went over to the Dark Side in Southeastern Michigan, after his speakership. But even a competent political mechanic is going to have a challenge selling RTA in 2018. There will be no Presidential race in 2018 to boost low information voter turnout, and RTA is now selling damaged political goods. Mass transit ridership is collapsing. And Leon Drolet is not going away.

Just maybe, road taxes will be used to fund the roads. Stranger things have happened in Michigan.

You Betcha! (12)Nuh Uh.(0)

  4 comments for “The Price of Political Failure

  1. KG One
    March 2, 2017 at 7:28 pm

    I'd give the odds on the next RTA tax hike in 2018 being approved somewhere between Slim and None.

    And I just saw Slim running like hell down the road.

    Aside from the optics of Mr. Ford living high on the hog while on the public dime definitely not being the most beneficial when approaching the public with their hat outstretched, the RTA has forgotten that even the democrats were working against them during their last attempt to shake us down.

    This wasn't Leon Droletts doing.

    Messrs. Penske, Gilbert, et al are going to need to open up their own wallets (for a change) if they want their toy train to continue to run for the foreseeable future.

    You Betcha! (3)Nuh Uh.(0)
  2. Sue Schwartz
    March 3, 2017 at 9:35 am

    10x25MM--so good AGAIN!!!!

    I see something even more sinister with all these public transportation issues. Yes, it's money, but when I see millage proposals constantly coming our way to pay for the transportation of a few--fire and police millage's and talk of even more authorities popping up--tells me that there's a dangling carrot somewhere in Washington DC and asses lining up for a bite. It also reminds me of school districts back in the 80's and 90's going after us for millage's for pools. Turns out upkeep of pools were never actually included in the audits and became creative slush funds for school districts. Once this was recognized and exposed--the pool issues quietly and quickly went away. So what's the real story--is taking our money just sport? And, don't forget about TIF's. (excess tax money, if you can believe it, being given away--most to improve private commercial property owners)

    We, the alleged sheeple of the north, are again facing a transportation millage in May. This, in light of fares collected annually, being so dismally small, that it hardly justifies having a public transportation system in the first place.

    I keep hearing Trump talk about rebuilding infrastructure using public/private funds. This Alarms me--look at all the sports arena's that were built. This is the perfect example of merging of public/private funds--and many of those arena's are now considered obsolete. Billions of our dollars for the benefit of a few. Bottom line--not only will your tax dollars go to rebuild the infrastructure but expect a toll road soon near you. Wake up people, please.

    You Betcha! (4)Nuh Uh.(0)
  3. 10x25MM
    March 3, 2017 at 11:06 am

    It is long past time to broadcast a little democratic sunshine on both 'authorities' and millages. The boards and officers of all 'authorities', along with all the other state boards should be elected positions, including all of of Governor Snyder's commissions.

    To prevent these boards and millages from hiding down ballot, the State of Michigan should reserve one election date each year for 'authorities'/boards and another for millages. Nothing else would be allowed to appear on such ballots. Board and millage votes would be excluded from all other ballots. This would focus popular attention on these administrative state adjuncts.

    The proliferation of boards and commissions in Michigan is a clear abdication of responsibility by Michigan's politicians. It is probably not possible to kill off this cancerous growth of the administrative state, but a little disinfectant at the ballot box should mitigate this situation.

    You Betcha! (3)Nuh Uh.(0)
  4. 10x25MM
    March 17, 2017 at 3:39 pm


    RTA fires CEO Michael Ford after careless spending decisions
    String of careless spending decisions discovered on Ford's expense account

    By Rod Meloni - Reporter, CFP ® , Derick Hutchinson
    Posted: 5:53 PM, March 16, 2017 Updated: 5:53 PM, March 16, 2017

    DETROIT - The CEO of the RTA was fired Thursday after a string of careless spending decisions was discovered on his expense account.

    The Regional Transit Authority board made the decision to fire Michael Ford at a Thursday afternoon meeting.

    Investigation showed close to $20,000 in questionable spending was found on Ford's expense account. Those are taxpayer dollars.

    Ford paid money back when it became clear he wasn't entitled to many of the expenses he put in for. Now he's looking for a new job after the board decided it was time to move on.

    It took three meetings full of executive sessions to come to the conclusion. Ford was terminated without cause and negotiated a settlement agreement which, for all intents and purposes, pays him his whole contract, which expires in October.

    He'll receive $118,000 in pay and get paid for vacation days. The RTA will also pay 80 percent of his health benefits, which will net Ford $168,000 in all.

    RTA chairman Paul Hillegonds used a transportation metaphor to explain what went wrong.

    "We really looked hard at this, and I truly believe the errors were committed when we were building the plane as we were flying in," Hillegonds said.

    The aircraft crash landed when Ford submitted expense reports for mileage, cellphones and healthcare and received too much money.

    "I think it really reflects honest misunderstandings and not intentional wrongdoing," Hillegonds said.

    "These were mistakes," Ford said. "Once they were brought to my attention, I made full restitution. We lost millage, and obviously when you lose, there are issues going forward, so there's a new opportunity. I think people want to refocus and figure out where we go from here.

    You Betcha! (2)Nuh Uh.(0)

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