For all the brickbats thrown at Sacramento Regional Transit – justified or not – it’s crucial for our future that it run efficiently.
Turning around RT was already going to be a heavy lift. So was getting Sacramento County voters to add another half-cent to the sales tax to help shore up RT’s finances.
It’s not going to get any easier as word spreads about outgoing General Manager Mike Wiley’s very generous golden parachute. His retirement deal is an especially easy target when RT just laid off 20 administrative and management employees and plans to increase fares on July 1.
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Wiley, general manager since 2007, had been under contract until February 2018, but announced last October that he intended to retire at the end of this year.
Under a revised employment contract the RT board approved last November, he will be paid his $229,740 annual salary until Dec. 31. When incoming General Manager Henry Li takes over July 1, Wiley becomes his special assistant.
Li told me he’ll offset some of the cost of keeping Wiley on the payroll by keeping his old position – assistant general manager for administration – vacant for at least four months.
RT board Chairman Jay Schenirer says it’s well worth it to have Wiley – and his institutional memory and expertise – on board through the end of the year, especially with the new downtown arena opening in October. Li agrees, and says he wants Wiley to help him come up with accountability measures for the money RT would get from the sales tax increase, certainly an important task.
Also under Wiley’s exit package, starting Jan. 1, he has the option to start a personal services contract with RT until November 2017, at $110 an hour, his current salary. The contract maximum is $50,000, but the agency is budgeting $24,300 for 220 hours as a “worst-case scenario.”
It’s up to Li how many hours Wiley will actually work and be paid as a consultant, which he won’t decide for several months. Wiley says he’s willing to help any way he can.
Schenirer and Wiley say that one major reason for the contract is that it allows him to stay on as chairman of the California Transit Association until his term ends next November, giving RT a seat at the table. I’m not convinced that RT couldn’t have a strong say without Wiley there.
Also as part of his deal, Wiley will get a maximum of $285,612 a year in retirement. Under federal tax rules, there’s a $210,000 limit on the pension he can receive, so he’s getting a supplemental benefit of more than $75,000 a year that will come out of RT’s operating budget.
I don’t begrudge his pension after nearly 40 years of service at RT, and he isn’t doing anything illegal. Still, that additional $75,000 is hard to stomach for a lot of people, including employees who will have to do great work for RT to improve.
At last week’s board meeting, one RT union member called the personal services contract “insane,” like having an arsonist train a firefighter. A rider called the retirement pay a “slice of economic inequality cake.”
Wiley says the criticism is unfair. Li wouldn’t comment on Wiley’s retirement package, but said he plans to meet with union leaders in the next few weeks.
Schenirer also points out that under Li, there will be a smaller senior executive team. It grew from nine to 13 people this fiscal year, but will shrink back to nine in 2016-17, saving about $414,000 a year, according to RT figures.
Whatever the explanations, the optics are not good. If this is the price to ease Wiley out and keep the peace, it’s a rather steep one.
It had become increasingly clear, even to some members of the RT board, that the agency needed new leadership. The Great Recession was a body blow, and only some service cuts have been restored. Business leaders and riders have been loudly complaining about safety, cleanliness and other problems.
Wiley has been in charge the whole time and has to bear some of the responsibility. To me, it sure sounded like Li threw Wiley under the proverbial bus by declaring the day his hiring was announced that RT’s financial condition was the worst of any transit agency on the West Coast according to rating agencies, and that the agency immediately needs a “major culture change.”
Li, however, said he was criticizing “past practices,” not Wiley directly. “Our relationship actually is very productive, very smooth,” he told me.
Wiley says he didn’t feel attacked and also says the two have a “very fabulous working relationship.” He points out that he hired Li and says that the RT board made an “outstanding decision” to promote him. (Li, by the way, will start at $216,000 a year and unlike Wiley will get only performance-based raises.)
Li has big plans to reform the agency, but he can’t make them without more money.
So Regional Transit badly needs the cash infusion from Measure B, the half-cent sales tax measure on the November ballot. If approved, it would generate $3.6 billion over 30 years. RT would get 26 percent of the revenue – or more than $950 million – for operations, to replace aging light-rail cars, to improve stations and to extend light rail, including to Sacramento International Airport.
But to pass, the measure needs at least two-thirds support, never easy.
Wiley says his retirement package won’t make any difference in the outcome. Schenirer says voters will care much more whether they see improvements in service, whether RT is doing a good job.
I hope he’s right. Then again, I wouldn’t be surprised if Wiley’s deal sticks in some voters’ craws – and they stick it to RT.