Sacramento Regional Transit last summer took a chance, hiring a newcomer with no chief executive experience and asking him to dig the bus and light rail agency out of its deepest financial hole in history.
On Monday, the agency board is set to reward Henry Li handsomely for his first year’s work, offering a five-year contract that gives him a 33 percent raise in his total compensation package, including benefits, of $379,000, starting in January. His current total compensation is $285,000.
The package includes a base salary increase from $216,000 to $281,000 by next January. Li’s predecessor Mike Wiley, who retired a year ago, had a final-year base pay of $230,000.
SacRT board Chairman and Folsom Mayor Andy Morin, who negotiated the contract, acknowledged the numbers will raise eyebrows but said he believes Li deserves it.
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Li’s initial salary was probationary and far lower than what other transit chiefs make, Morin said. More importantly, according to Morin and some other observers, Li and his staff have pulled the agency back from the brink financially and have improved service performance.
“I know it’s a little eye-opening for some folks, but I am confident we are doing the right thing, Morin said. “All of us on the board were extremely pleased with his performance. We want his salary to be representative of his performance.”
Agency officials published a pay comparison sheet showing that Li’s base pay would be lower on average than in comparable cities, including San Jose and Portland.
The agency had failed to balance its budget for several years and had run out of emergency reserves. Li and his staff have balanced the budget and built reserves back to $8 million, in part by cutting administrative staff. The agency also increased security and fare checking at stations, and has done a better job of cleaning trains and stations.
Barry Broome, chief executive of the Greater Sacramento Economic Council, a group trying to woo Silicon Valley companies and workers to town, last week credited Li with improving SacRT by “leaps and bounds.”
But the agency remains at financial risk. Ridership has declined in recent years as ride-share services such as Uber have arrived on the scene. SacRT still has some of the highest fares among transit agencies in the country. Some riders have complained the agency has focused too much on downtown services related to the new arena, and some have protested the agency’s efforts, along with Sacramento and West Sacramento, to build a $200 million streetcar line.
A critic, Craig Powell of Eye on Sacramento, which focuses on government spending, called Li’s raise “massive” and “tone deaf,” and said it shows the board still is managing public money poorly. “I can’t imagine RT sending a worse signal,” he said.
Transit rider Russell Rawlings, member of Sacramento Transit Riders Union, which advocates for service for transit-reliant riders, said he is uncertain about the appropriateness of the pay increase amount. But he said Li has created a “sea change” for the better, notably opening communication with riders and community members.
Li’s tenure is still young, though, Rawlings said, and Li and his staff have more work to do to prove themselves. The agency, in particular, has launched a major review of bus routes that could lead to significant service changes. The goal is to modernize the agency and gain new riders while continuing to serve customers who already rely on the system.
Rawlings said that effort will be possibly the biggest test of Li’s “mettle” in stabilizing and upgrading the agency.
Li, 53, previously worked in transit in China and more recently held transit agency financial roles in Atlanta, San Francisco, Virginia and Jacksonville, Fla. When he took the top SacRT job last year, he bluntly said the agency was in the worst financial shape in the eyes of credit agencies of any West Coast agency, and that his goal was to make the agency transparent and accountable, and to put customers first.
In a recent letter to the SacRT board listing his staff’s accomplishments, Li wrote, “While we have not yet reached our potential as a best-in-class transit district, we are miles ahead of where we were.”