AATA Board Members “Retiring” In Face of County-Wide Transit Debacle

Long-time Ann Arbor Transportation Authority Board members Jesse Bernstein and David Nacht will be “retiring.” The public story is that the two have served their terms and are happily busing off into the sunset. Political insiders, however, say that the “retirement” of Bernstein and Nacht comes at the insistence of several City Council members who’ve demanded accountability for the money spent by AATA on a failed county-wide transit plan. AATA officials, in a spreadsheet prepared for Council members, claimed to have spent only about $1.5 million dollars over the four years AATA Board members, including Nacht and Bernstein, pursued a $500,000,000 county-wide transit plan. A former AATA Board member scoffed at Ford’s claim that AATA had spent only $1.5 million dollars over the four years the plan was in the works. The skepticism seems reasonable. On his spreadsheet, Michael Ford claims that it would be impossible to calculate the number of staff hours spent on the project, and thus impossible to calculate the amount of money spent on staff time devoted to a project that never delivered proposed expanded transit to taxpayers.

David Nacht (left) is fond of trench coats, fedoras and wingtip shoes—a big-as-life Mickey Spillane character. Nacht is a successful attorney with a business advertised on billboards along local highways. Nacht doesn’t live in Ann Arbor, yet for the past decade he has occupied a seat on the board of the Ann Arbor Transportation Authority, shaping how $8-$10 million dollars given over to AATA each year through a perpetual millage are spent. Thus far, critics have not been impressed with the results. A transit professional familiar with AATA’s finances asks, exasperated, “Why is one-third of AATA’s personnel budget spent on administrative expenses?”

Former AATA Board treasurer Ted Annis asked similarly pointed questions, until Hieftje bounced Annis from the AATA Board, thus creating an extremely well-informed and very vocal critic of AATA’s leadership. Annis’s concerns were, it turns out, prescient.

In 2011, Michigan Capital Confidential revealed that AATA had a $1 million dollar deficit and that the organization’s executives were some of the most “highly paid transit bosses” in the state of Michigan. Cap Con reported: “The AATA has eight employees making $90,000 or more, according to a Freedom of Information Act request. The AATA has 171 employees and a $21.4 million operating budget. Grand Rapids, which has 308 employees and a $31.9 million operating budget, had four employees making $90,000 or more. Flint, which has a $21 million operating budget, has two employees making $90,000 or more…..Michael Ford, the CEO of the AATA, was the highest paid administrator at $183,895.”

The piece prompted a reply from Michael Ford in which he writes: “The short answer is that we have developed a very systematic approach to employee compensation that takes several factors into account. AATA competes, not only with other transit systems, but with all businesses and organizations within southeast Michigan…..The long answer is that our salary administration plan was originally developed in the early 1990’s by an independent consulting firm.”

The bottom line is that spending one-third of the personnel budget on administrative expenses means it costs $120 per hour of operation for AATA buses, versus just $60 per hour of operation for U of M commuter buses, which provide service 20 hours per day. That kind of extensive service is little more than a puff of exhaust in the faces of Ann Arbor residents who ride AATA regularly. AATA riders face hour-long waits for buses on the weekend—and service that ends at 6:30 p.m.—not to mention poor routing in parts of town where low-income housing is clustered.

Instead of “thinking local first” as numerous residents, Ward 2 Council member Sally Hart Petersen and Ward 3 Council member Stephen Kunselman have said should be done with respect to AATA’s bus service, David Nacht and his fellow AATA board members wasted 4 years pushing, shoving, dragging and jamming through a county-wide transit plan with a staggering half a billion dollar price tag. The public was told that AATA wanted to create a regional transit authority and then use AATA’s money, plus a millage paid by all county residents, to spread AATA bus service. The real plan was to create a transportation authority that included AATA, and divert AATA’s millage money to fund commuter trains. To date, Ann Arbor taxpayers have been bilked out of untallied millions funneled to transit projects never approved by City Council, including a non-existent train station John Hieftje wants to see built on fragile river front parkland on Fuller Road.

Ward 5 Council member Mike Anglin and Ward 2 Council member Jane Lumm have both asked city staff to produce records that show the total amount of money spent on the Fuller Road site. Thus far, city staffers have been disinclined or simply unable to comply with the Council members’ requests. Similarly, when A2Politico asked AATA to produce public records related to the total spent on its pursuit of the failed county-wide transit plan, AATA CEO Michael Ford responded to a Freedom of Information Act request with a bill for $1,538 for the agency to gather together the information and photocopy it. Ford eventually reduced the amount demanded for copies of the public records to $750. Ford’s response has prompted several City Council members to agree that a loosening of the city’s somewhat restrictive FOIA policies is long overdue. Ann Arbor City Council voted to tighten the city’s FOIA policies in November of 2009, after FOIAed emails cost Ward 3 City Council member Leigh Greden his seat.

Along with Nacht, former Executive Director of the Ann Arbor Chamber of Commerce, Jesse Bernstein (right), will be “retiring.” Bernstein, perhaps, embodies most clearly Hieftje’s poor track record in appointments to important boards and commissions, and the flaws with Hieftje’s underhanded plan to co-opt AATA and its millage money to fund consultants, drawings, staff time, and other expenses related to bringing commuter trains to Washtenaw County. Bernstein has a Master’s degree in social work, and was appointed to the AATA Board by Hieftje in 2008. Prior to his appointment, Bernstein spent years losing money at the Ann Arbor Chamber of Commerce, according to tax documents filed with the IRS. In 2007, 2008 and 2009 (Bernstein resigned in late-June 2009), the Chamber of Commerce lost money and gross revenues fell from $1.2 million and $975,000. Incredibly, in 2008 under Bernstein’s leadership, the group spent 70 percent of  its $1.03 million in revenue on salaries, benefits, travel, and office space. One member of the Ann Arbor Chamber of Commerce when Bernstein led the organization told A2Politico that the “Chamber barely survived Bernstein’s ‘leadership.'”

The Ann Arbor Chamber of Commerce subsequently merged with the Ypsilanti Chamber of Commerce, a move that saved the organization.

AATA Board member Jesse Bernstein, when asked in August 2011 what level of millage it would take to fund the first five years of AATA’s transit master plan vision, replied: “I don’t know and I don’t care.”

Incredibly, Bernstein then emerged as the “finance guru,” the AATA Board member who headed a committee charged with creating and shaping a financial plan to fund the $500,000,000 transit plan. It was also Jesse Bernstein who claimed in public, during a City Council meeting held in January 2012 that “22 communities were interested in participating” in the AATA’s county-wide transit plan. He made this claim after three Ann Arbor City Council members openly expressed their concerns about what they believed were serious “flaws” in the county-wide transit plan.

Throughout 2012 AATA officials, including Michael Ford, delivered presentations to the elected officials of the county’s townships and municipalities about their participation in the county-wide transit plan. Within the space of three weeks in October 2012, virtually every township and municipality in Washtenaw county opted out of AATA’s county-wide transit plan. Ann Arbor withdrew its participation, as well. It was a huge political embarrassment for Hieftje. It was an even more embarrassing political debacle for Michael Ford, and the members of the AATA Board. Had this been 2011, the defeat of the county-wide transit plan, and wasted millions of tax dollars would have been swept under the rug.

However, it’s 2013, and November 2012 saw an end to John Hieftje’s cozy Council majority. November 2012 saw the election of City Council members determined to pursue accountability in local government, including for the county-wide transit debacle. Those Council members include Ward 1 Council member Sumi Kailsapathy and Ward 2 Council member Sally Hart Petersen. Thanks to these two, as well as Ward 2 Council member Jane Lumm, Ward 3 Council member Stephen Kunselman and Ward 5 Council member Mike Anglin, Hieftje and his AATA appointees found themselves in wholly unfamiliar territory, having to take responsibility for brushing aside Council members’ and the public’s concerns about the proposed county-wide transit plan, and wasting the taxpayers’ money.

Insiders speculate that Vivienne Armentrout, who has written extensively about local transit on her blog, and who has run for multiple local offices, albeit unsuccessfully, may be tapped to sit on the AATA Board. In 2012, John Hieftje feared the election of the prickly transit wonk to City Council so much he endorsed her Ward 5 opponent, a man with no experience in government who tried to claim his job at a tiny local non-profit as “community service” during the August 2012 primary. In addition, campaign finance forms show that Hieftje’s political supporters poured money into the Ward 5 Council race in support of Armentrout’s opponent. Her appointment to AATA’s Board would force Michael Ford into a difficult position. Local transit supporters hope that improved AATA bus service follows on the heels of the the departure of Nacht, Bernstein and, perhaps, Michael Ford. Local transit supporters also hope the departure of Nacht and Bernstein will be the beginning of the end to Hieftje’s misuse of AATA and attempts to divert local millage money to fund and/or subsidize bus service for people who live outside of Ann Arbor.