AATA, CEO Candidate Start Talks

AATA Board meeting (April 22, 2009): In their deliberations Wednesday evening, the AATA board assessed CEO candidate Michael Ford’s interview responses as “mushy” and not as “crisp” as they’d ideally prefer, with board chair David Nacht describing Ford’s communicative style as “modern management parlance.”

So often was the word “crisp” invoked that Thomas Partridge, who spoke at the conclusion of the meeting during public commentary, gave one of his standard talking points a little extra flourish: He asked the board to articulate a vision for expanded countywide service “in the same crisp language” that they expected from their next CEO.

In fact, it appears that the next CEO of the AATA will be Michael Ford. The board looked past a lack of crispness in his interview answers and voted unanimously to make him an offer and enter into negotiations. Assuming the two sides can reach an agreement, Ford might be able to take over the reigns of the AATA relatively quickly. Ford operates his own consulting firm, MG Ford Consulting, and there would be no coordination with a current employer to consider.

In other business, the board (i) heard a report from their auditor (who was roundly lambasted by board chair Nacht), (ii) got an update from their own financial staff (AATA is on course to keep its current year’s budget balanced), (iii) passed a resolution to charge the full cost of service for its purchase-of-service (POS) contracts, thus increasing the cost to municipalities like Ypsilanti by roughly 30% by 2012, and (iv) gave support only in concept for Ann Arbor’s Transportation Plan Update.

Michael Ford’s Third Interview for CEO of the AATA

What follows is not a syllable-for-syllable rendering of Michael Ford’s interview on Wednesday, April 22, conducted in public in the AATA board room. We have not included talk from board chair David Nacht that managed the turn-taking during the interview. In places where the quality of the audio recording was too poor, we have indicated this with “[...]“. Otherwise, however, it’s verbatim. A sequence of three dots at the end of a speaking turn following by the same sequence at the beginning of the next turn indicates a natural conversational yielding of turns.

Ted Annis: I’m kind of a financial guy so I wanted to talk to you a little bit about some other things. But what I need you to do – and maybe it would be beneficial if you do this for everybody here – run me through the last couple of years of what you have been doing. You were at this one agency, okay, and then you left that agency and started your own LLC and returned there as a consultant? Do I have that …

Michael Ford: … no.

Ted Annis: Okay, help me out with that.

Michael Ford: How far do you want me to go back?

Ted Annis: Let’s just go back three years or so.

Michael Ford: Okay, I was at TriMet for almost 6 years there. And I was in charge of all the transportation operations – rail, bus, scheduling, field operations, and training as well. [...] I commanded about 1,500 folks, and had a budget of about $125 million. And the responsibility was managing all transportation services there. I was promoted to work with the general manager in my last year there, and I was his assistant. And I would do work for him – around efficiencies looking at how we could cut costs. I was in charge of a top-down review of all of the operational and organizational efforts to reduce costs – from finance, to looking at marketing, to looking at facilities and building of new facilities and stuff like that. I had an offer – I was kind of wooed away by San Joaquin to come down and help them in their operation. They needed some help, I knew the person who was the general manager [...] over 10 years ago. So I did leave TriMet to go down there and help them out. So I was the chief operating officer down there. What happened there is we had some financial problems and there were some layoffs. I was affected by that, because I was new to the organization. There were six of us that were laid off as a result. Came back to Camas, where I am currently living. I already had a business on the side that I expanded and created MG Ford Consulting. And I have been doing consulting since that time.

Ted Annis: Now I have just one more question and it’s a real snotty one.

Michael Ford: Okay!

Ted Annis: Are you ready for a snotty question?

Michael Ford: Sure.

Ted Annis: Okay. Actually, before the last time you interviewed I asked staff here to get some data on TriMet – some operating efficiency data. TriMet had quite a jump in its operating costs from 2004 to 2005 to 2006, if I read this correctly. And it looked like it got slowed up a lot – if I am reading this correctly – in 2007, it looks like the upward cost increases tapered off. Do I have this right?

Michael Ford: Are you talking about cost per hour?

Ted Annis: Yeah, the operating costs per bus service hour.

Michael Ford: We may have had some slight increases. There were some issues with work productivity, in terms of attendance. We had some issues with the  build-out of additional services. We actually had made some cuts there, too. Service hours were redefined, our service criteria changed, and we were  able actually to create some efficiencies. In fact every year that I was in that department, we cut probably about $1.5 to $2 million a year in overall costs, because the lion’s share of the organization – the cost is out of the operations and maintenance unit. So we were pretty diligent in a tight market. Our sales tax revenues weren’t coming in as much and we had to make some shifts. So I would have to see the numbers that you are really referring to, just to make sure that I am clear. The last statistics I have – and in fact I have the March report … [Annis hands a sheet across the table.]

Ted Annis: … you see where it goes from 89 to…

Michael Ford: … I’m showing on my latest report from TriMet in March that it’s about $98 an hour.

Ted Annis: That’s where you’re at right now?

Michael Ford: Yes.

Ted Annis: So (that) represents a reduction?

Michael Ford: Yes, that’s a reduction. I’m not sure where this comes from. Nancy Jarigese does the report, and I am still in contact with her, and I get information from her and there have been some reductions. Now that also includes field operations, cost of operator, cost of maintenance, so there’s a lot of other things built into that cost.

Ted Annis: Okay.

Jesse Bernstein: What are your impressions of this organization, based on the interviews that you’ve had so far?

Michael Ford: I think it’s – there’s a lot going on. I had a chance to look at the 2010 plan and also the recent plan – I believe it’s the Ann Arbor Master Transportation Plan. And I see that there is a lot of opportunity for growth, and a lot of opportunity to make a difference. I’m impressed with that – the forward thinking, trying to get things moving forward. Now, I’m not sure what the results are from the 2010 plan, which I believe was conducted in 1998, but there’s a lot of good solid information in that plan that I think is important to follow up on. So what I see right now is an organization that is willing to grow, be more regional, incorporate a lot of green technology and opportunity. I see the need to separate transportation in a way that is necessary because you can only go through so many areas because of congestion and everything else, and so separating the grade. I see a lot of opportunity to help expand on the future of the organization and make it more of a regional player. And that’s an exciting thing, it’s very exciting. In Portland when I was going to school, there I saw construction and everything going on. And I came from probably one of the premier systems in the country, and I can see the evolution of how things work. And to be a part of something like that would be exciting.

Paul Ajebga: Michael, I only have one question. If you are the executive director of the organization, and you get interference from the board regarding the personnel structure, and you’ve been asked to reorganize, and it’s not consistent with the way you would like to run the organization, how do you handle that?

Michael Ford: [...] The issue for me is: Is the alignment helpful in reaching the objectives, the mission, and the goals of the organization? Because I think that’s the backdrop that I would be looking at to help guide me, to make sure that we’re going in the right direction. So I would want to make sure – you  say that the board is asking for a reorganization?

Paul Ajebga: If the board is asking for personnel changes that you don’t believe are consistent with the way you would like to run the organization, how would you reconcile the differences?

Michael Ford: Well, I would have to understand what the concerns are, what the deficiencies are, and what is being looked at as a concern. You know, I am obviously open, but I also want to make sure that things are working and are aligned and make sense. I don’t have to win every major battle, but I think in keeping our eyes focused on a bigger prize – is this going to help us get where we want to go – that would be probably  the most important thing to me.

Paul Ajebga: Do you think that the board has the authority to …

Michael Ford: … I think your role  is really policy, and I should be running the organization. So I want to make that distinction. If I’m entrusted with that responsibility, then for me that would be important for me to exercise that. It would be a key component for me to feel that I can do the job that I need to do. Short of that, there’s going to be maybe some concerns that I would have. Because I have to work with the board, and I’ve got to be allowed to manage and to make sure that the responsibilities of the organization are being handled. Definitely I’d be wanting to have some discussion about that. But I’m very clear about what my role should be in that.

Rich Robben: I have a lot of interest in the relationship [...] three business processes. One of them is goal setting, the other is aligning organizational priorities with those goals, and the third is tracking performance to make sure that things stay in alignment. Can you talk a little bit about your experience and background, how you have handled that relationship among these things?

Michael Ford: I also think it’s important to really have a vision and clarity to impart and discuss, because people are working, I think they want to feel valued, and they want to know how they fit into the bigger picture. So I think that’s a matter of having a clear vision and understanding. I think the goals are important to help get you there, and to make sure that people really understand. But not just to tell them, but to show how their job and their function is aligned with the kind of objectives that you’re trying to get to. I’ve had a lot of involvement actually in doing that – meeting and talking and looking at the job itself and making sure that those are in alignment. Are they the jobs that are going to create the  movement that you need to get the objective done? So I think that alignment is very, very important. In my experience with (that) has been kind of revolutionary in terms of at TriMet, I had a lot of folks who had been there a number of years, they got into positions, but maybe they got into them for the wrong reasons or they were just promoted [...] And so we built the whole process of educating and training and getting the gaps identified and trying to address those gaps. And some people who moved around succeeded, and some people just had to find work at other places, because this was the direction we needed to go. But everybody has a role in contributing to that. I’m big on the vision, I’m big on telling people what their role and responsibility is and how they can contribute to that. [...] I’ve had experience in community transit doing that with staff. In fact there were retreats where we talked about that. We’d align the vision, the goal, and the mission that the board has set. And we talked about how we can meet these and what are our timelines. And we would chart these things, and progress reports, and make sure that we were all on the right page. So it made for a healthy environment where people find meaning in their work. And created a synergy that we were all in this together, going this direction.

Ted Annis: Another snotty question. If the treasurer [...] wants some data to take a look at – some financial data – and picks up the phone or sends an e-mail to the head of the accounting department, would you have a problem with that? Or how would you like to have that handled, if a board member wants some data? I got a little concrete with that example, but it’s a perfectly reasonable and common request.

Michael Ford: Given that there’s information that needs to be out there a lot, I would prefer it to go through me. Because I need to know what’s going on and what your needs are as board members. So to me for that information to flow through me or have some awareness of that would be very important. You know, I understand that that person could probably get you what you want. But without my knowledge or my involvement, then I think there’s problems that could exist. So I would prefer that the board members would go through me in order to collect that data. And I could provide you with what you wanted to make sure that I understood exactly what you were needing and the method in which you needed it, and how you would like to see it in the future.

Ted Annis: Okay. Would it be acceptable – the next part of the snotty question – would it be acceptable for, in this case Paul, to send an e-mail to the head of the accounting department, but CC you, would that work for you?

Michael Ford: Yeah, I’d rather have it come through me. You know, I just think it would be cleaner and make more sense and given the responsibility and role that I have in the organization. But I could be open to a CC or something, but I think generally speaking my preference would be that the information come through me.

Ted Annis: I’ve got one more question, not related to finances. The idea has percolated – I’ve talked about this with some of the other board members – but this organization is growing. Right now there are two distinct operating modes in this organization. One is a fixed route bus service and the other is what would generally be described as on-demand service. The on-demand service – I’m just doing this quickly off the top of my head – has a revenue component of a little over around $5 million a year. And I believe that the fixed route bus service is $16 million a year or something like that – just to give you a sense of the proportion. Now we’re talking about doing something with rail, okay? The thinking which has been percolating in my head is maybe we should have the organization have three operating departments – perhaps a rail operating department, and on-demand operating department, and a fixed route bus service operating department. This is just thinking, that’s all it is. It’s pretty logical thinking and it’s a pretty logical thing to express. But I would like your opinion of that.

Michael Ford: It’s interesting that you mention that, because where I came from we had separate divisions, and one of my jobs was to integrate them. Because of the complexity of the operation, if your rail system went down you need to create a bus bridge to accommodate those people. So you kind of interlink them in a lot of ways, and I think that I found that worked better, because the issue is providing service to the people. You don’t want to lose sight of that. When you talk about separate divisions, people will work in this category or they will work in that category, but when things need to be coordinated I still think that there is a need for that synergy and that understanding. And sometimes cross-training among different concentrations is also important, because you get a better understanding of the operation itself. So my thinking would be that I still think you might have some alignment areas, but in terms of the service delivery, some coordination efforts, I think, are essential for providing the public with the service that we want to provide to an optimum level of completion.

Ted Annis: Did you eliminate the three separate department idea, or did you just force them to talk to one another?

Michael Ford: We didn’t necessarily eliminate them – everybody had their own concentration, but the notion of integration was a permanent association. In fact we had people who could play dual roles. And they could go back and forth, because they’re not thinking in solely one concentration. They’re looking at the bigger picture. The other alignment issue – your green line train is down and you’re only thinking about that train, and you’re not thinking about those people getting addressed, so you have to have the wherewithal and understanding that, Hey, I’ve got to get some buses up here, I’ve got to get some drivers, I got to get some coordination, I got to get some supervisors that need to be present and involved in this stuff. So those are the things that I think will help. And as you look at the vision in going forward and talk about integration at least when I was at TriMet, we could no longer work in silos and in order to be a productive organization and one that was really addressing the needs of the people, we had to have synergy and work together.

Ted Annis: Okay, so if I looked at the TriMet organization chart, I would not see a manager of this, and a manager of that, listing …

Michael Ford: … you would see a manager of control. And control would have cross, dual purposes for bus and for rail.

Ted Annis: That’s what I’m after, I understand.

Michael Ford: It would be in there, because what you had was a segmentation and that was not really serving the need, because this person over here with the resources might be able to help you, and if you’re not talking and you don’t have the wherewithal and understanding or haven’t invested in that training, then there’s missed opportunities.

Ted Annis: I understand.

Charles Griffith: I don’t remember talking terribly much last time about your experience with boards. And also my question kind of gets at the issue of organizational change. Now we are talking about various ways to expand our organization and our services here. Some of our directions might point us toward reconstituting our board and creating a larger board with other jurisdictions represented. That creates a lot of potential for a lot of upheaval and change in the organization. I would just like to get your take on what that might mean for you in this role and what your experiences are with boards that might help you deal with that.

Michael Ford: I have served on a number of boards [...] Your question is a really good one, because as you expand, this expansion is not going to be done just by AATA. You’ve got to incorporate partners and other municipalities who have a vested interest in seeing this whole region do well. When you’re talking about funding, money, support, leveraging relationships, you have to be more inclusive of others to make that happen. And they are going to come with their issues and their concerns. And I think that’s a relevant and necessary part of that. So as far as the expansion of the board, that could be a possibility given some of the trade-offs that may need to be made in terms of getting where you need to go in terms of financing or money and all of that. I don’t know all of the components to make that declaration here, but I think as you look to be more regionally focused, you’re going to have [...] people who have legitimate issues that affect their service, and they’re going to want to have a voice. I don’t know if that means a board appointment or not, but my experience is that people, no matter what, have a vested interest, whether that’s the public, whether that’s constituents, and you have to give rise to that. But you also have to show that the system that you’re running is running efficiently and effectively and is meeting the needs of the people. In building that trust, in building that capital so that people will see that you are trying to do the best that you can and you may need more funding or more support in order to get where you want to go.

Charles Griffith: I think I’m also trying to get at the question of your interaction with the board itself and so maybe more specifically at San Joaquin or TriMet, what kind of interactions would you have with the boards? I mean, you weren’t serving as the CEO, so I’m not expecting you to have the same kind of picture as if you were serving. But how do you see the functioning of a board of a transit organization in this role now as sort of playing a more key role in trying to bring that board together and potentially expanding it?

Michael Ford: I’ve had a lot of board exposure in my career, particularly at community transit and at San Joaquin to some extent. And just committee work. Working on radio frequency – we were trying to build a new radio tower, not just now but 20 years from now. There’s a big issue about frequencies between police and fire and political issues because transit was not at the table and we still have a vested interest in communication to our operators and all of that. I had board members that I worked with extensively on these type of issues to get their support and understanding and leveraging their political capital to help us get what we need.  So it was constant feedback and communication, having these discussions at committee meetings. Wetland mitigation, I had facility responsibility, and we had issues with environmental issues and board members, some board members were engineers and so we had a close association with dealing with those type of issues. And what I built was capital and trust, and what I was doing was providing good information, great options and the board felt comfortable as a whole that the work that was done in committee could be moved forward, because of the quality of work that was done. Emergency procedures, different jurisdictions had their own emergency protocols or response, and there was a lot of duplication in a lot of areas. And transportation wasn’t at the table. So bringing transportation, and not duplicating other emergency processes along the lines was another focal point. So working with elected officials, working with board members, along with making presentations, going to retreats and strategizing about the organization and where it was going. We even did the Berkman so we all knew each other’s ways of thinking and preferences and all of that. So I have been around that environment quite a bit. So for me to be involved in a board at this level now, I think it’s something that is in alignment with what I’ve done and what I’m used to and I feel very comfortable with it.

Jesse Bernstein: Michael, can you give us some ideas of how you would go about as leader of the staff determining what the future should be in terms of mode of transit? We are looking to expand, we’re looking at rail. How would you structure that process? What would you look at, what would you want staff to do so that we make the best decision over the long term? I guess I’m asking for both specific behaviors and specific measurements that you think are important in making that decision about what mode we move into in the future.

Michael Ford: There’s a lot there to that. I think that the 2010 plan was a baseline look at that, because a lot of work was done doing research and getting stakeholders involved, getting friends and foes of the organization to plan what’s going on. From an internal standpoint [...] what I think I would want to do is bring staff together and vet through the issues as we know them. But what I would want to do is maybe use the 2010 study to look forward. Where did that leave off? Is there a follow-up to that? Is there something more around that? I also think the Ann Arbor Transportation Plan would be another integrated piece to want to look at. So those two documents, maybe taking some time to look through that, where we’ve been, where we’ve come from, and also sitting down with staff and identifying some of the challenges and some of the issues that they have encountered. Who are our allies and who are some people who may have some issues with transportation thinking?  [...] I mean one of the things that is really critical right now is funding for what we want to get to. And I’m finding that’s not going to be done in a vacuum. So I would probably start off with those documents and working with staff and kind of collectively looking at where we are based on that information as a starting point.

Jesse Bernstein: Let me be a little more specific. Let’s say there’s a route and the question was what mode do we use on that route? How would you go about making that determination?

Michael Ford: Well, I would look at the need. I would look at the number of people riding that system. Is it fitting? Do we need a 30-foot bus versus a 25-foot bus? I would look at the geographic makeup. Can we attract more people to the system, based on the type of service that we are providing? So it’s kind of knowing those integral parts of that different area. So some study, some surveying, what our customers want, I think some listening and what can we provide it makes sense and that is going to move people. So it’s a lot of communication and work with the outlying area.

David Nacht: Suppose you started June 1. What could you tell this board by September? What would you expect to accomplish over the summer and what could  we expect – if you spent the summer learning the organization and thinking things through – what could we expect from you in September if you started June 1?

Michael Ford: Well, I think a better understanding of the organization, getting out and meeting people, kind of knowing what they think and feel – because that is important to me to educate myself and knowing what to do. I think the beginning of a plan: Here’s what I’ve been able to absorb, here’s what the documents and  literature and things that have been written, here’s been my experiences, and probably some draft outline of here are some things that I think are important. So I know that there is the start of visioning and goals and missions and how does that all incorporate into all that as well [...]. So I think I would be able to come up with something that is fairly robust in terms of  here  are the players and here are some of the people that we need to continue to meet with and work on, here are some the issues that we can build on, and here are some action plans that we could take to alleviate X, Y, or Z.

David Nacht: You talk in terms of modern management parlance. I’m a lawyer. I talk in direct terms. Would you have things for us to vote on – move in particular directions which would affect our internal relations and external relations by September if you hit the ground in June?

Michael Ford: I think that’s a reasonable expectation that I would be able to say, here are some things that I would like to move forward with all alignment in terms of internal operations, and here are some relationships or some things that we need to pay more close attention to and here are some things that I think I’m going to need to get some help from you on. Now June, July, August, September, I don’t know if the reality of people being gone on vacation, so I’m trying to be realistic about are you getting the plethora of folks who are going to be available and all of that. But I think that I could at least articulate and have some things that I would want some movement on internally and possibly externally. But I think there’s a lot still that I would need to grasp, a lot of people I would need to meet. Because you could read stuff and then you can meet with people and get a different interpretation of what’s really going on.

David Nacht: Our budget cycle begins in the fall. Would you be able to participate in helping us formulate a budget?

Michael Ford: I definitely think so. I think leading up to that, plus there’s a cycle I’m sure, where  you would be starting that time where you look at what the budget needs to look like, and what are the obstacles, barriers, vulnerabilities that we need to be addressing coming for the budget cycle.

David Nacht: What is your biggest fear about coming here and taking this job?

Michael Ford: Well, I think trying to work through all these issues. I think there’s some lofty goals that can be realized but it’s going to take partnership, it’s going to take relationships, it’s going to take the board’s help and support in making those things happen. It’s not going to be done in a vacuum in order to get where we want to go. Time is creeping in, and we’ve got these different ideologies that seemed to make sense to me, based on what I read, but can they be realized given the economy, given some of the other struggles. We have money that is contingent on how the economy is doing. You get local taxes, you get federal assistance, you get state assistance, you get fair box revenue – these are things that come into play, but that money is not always as solid as you would like. So looking at other funded sources would be real critical to that. Those would be challenges. They’re not insurmountable, but I think getting those things under the belt, and getting special projects moved forward, I know there is money for stimulus coming through, I believe the park-and-ride and some buses …

David Nacht: What I think I hear you saying is that you see perhaps a bit of a disconnect between our very ambitious goals and fiscal realities of this economy, is that fair?

Michael Ford: That would be a fair assessment.

David Nacht: I think that’s a realistic appraisal.

Rich Robben: I was just looking through the report, our latest cost per service hour is $102 per service hour. We would like to see that somewhere around $96 per service hour. Where are the first areas you would look to trim expenses, impacting service, just offhand?

Michael: I would look at the type of service that you’re delivering. Is it the type of service that is necessary. I have often found that looking at our service criteria, or looking at our service plan planning, when I was a TriMet and I  was at the service department, we were able to trim some money there because the service wasn’t necessarily as efficient as it could be. So running headways, it’s more important to get  the buses running every 15 minutes as opposed to being inconsistent – do you mean financially what I would be looking at?

Rich Robben: What kind of areas of the operation, with their practices?

Michael Ford: Scheduled overtime, I would be looking at that. Unscheduled overtime, how that’s looking? Productivity. Are people coming to work? What is our attendance looking like? Because when you have people not coming to work, you have replaced them with somebody on overtime. So you want to look at those type of issues. Our accident per vehicle, our accident per passenger, I mean those things are cost drivers and they affect people being at work. And you have that replacement cost plus paying for that person to be out – preventative maintenance and how preventive maintenance is being done, parts, warranty tracking – getting money back for warranty-related issues. Safety is a big issue, because you want to be on the front end. It’s one thing to have the accident and afterward you are managing that, but if you can reduce it before it happens. So where are we having slips, trips and falls at? Are we taking measurements to address those ahead of time, so that they don’t happen? Your most costly cost is your labor, your people, and taking care of them and making sure that they are doing okay and that you can avoid that is critical to the operation.

Paul Ajegba: Michael, we are currently a bus organization. We are trying to integrate rail into our organization. Everything seems to be on track – no pun intended – to make that happen. If for whatever reason, politically or financially, it does not happen, how would you feel about that?

Michael Ford: Well, I don’t think I would give up. I think the important thing is that the project and the focus makes sense. I came from an organization, for example, TriMet is pretty well-known for its service. But the big thing in working with my former boss, Fred Hansen, who is the general manager there, is that he was able through his relationships to get funding, to  get money. The last budget that President Bush had, three of the four projects were funded in Oregon, because of some diligence. To answer your question, I wouldn’t want to just give in to that. I would look at other alternatives, look at what else we could do. Maybe the timing won’t be right. But I think if we’re going to address the needs of Ann Arbor and the region we are going to have to get to that point. So I think we need to continue the discussions and all that. I don’t know if I would just feel defeated at that point. I just feel like I would keep trying and finding ways to do that.

Paul Ajegba: Even if it is beyond your control?

Michael Ford: Well, if it is beyond my control, in terms of just can’t get it done?

Paul Ajegba: As I said for political reasons or for financial reasons or for regional issues that you can’t have anything to do with, even if you can get money from Washington, but because the stakeholders are not coming together to make it happen, how would you feel about that?

Michael Ford: Well, I would be concerned. And I would be still looking to see what we could still do to try to make it happen. [...] I think that being able to carry a message of why this is important in getting other relationships and other people and other agencies to help support what you are doing and leveraging that is the best you can do. No, I would probably feel somewhat disappointed it didn’t happen.

David Nacht: Ann Arbor and the region – what have you observed? What do you like – not personally but related to transit?  What have  you noticed about our community compared to other places you’ve been, about our system relevant to the job?

Michael Ford: I grew up right next to the University of Washington – my mom still has a house there. I grew up in an area where transportation was a vital thing for college students and for people getting around. For me personally – I’m getting a little off the subject – it has that feel to it. But what I also see is possibility of what other things can be done here. So it feels like it’s kind of on the precipice of moving forward and other things that could potentially happen. So when I look around and look at the Seattle system would work where Portland was several years ago, I see opportunity to enhance the transportation system to make it more robust and to even have potentially separation of grade and make things more user-friendly, because of where I see things trying to go. So that’s exciting to me. I see the possibilities of what more it could be.

AATA Board Deliberations on Michael Ford

Charles Griffith led off commentary by saying that he thought Ford had the skills to do the job, allowing that there would be a learning curve, because Ford had not held a similar position. Rich Robben noted what he liked about Ford: he’s people-oriented. Robben cited Ford’s answers about cost-cutting, which revealed that Ford understood that labor was the largest part of the budget. Board chair David Nacht solicited any negative impressions by asking his colleagues to identify deficits and red flags. For his part, he noted that the board had identified a “strong budgeting type” as one of the criteria they’d specified, and on that scale Ford was somewhat of a “stretch candidate.”

Ted Annis began his remarks by saying, “I like this fellow a lot.” Annis described Ford as pliable and adaptable. “Part of me wants to love him to death,” Annis said. But Annis said that as he listened to Ford’s answers, a number of them were not on target, and “not crisp and clear.” It  made him wonder, continued Annis, if Ford was seasoned enough to take the job. Annis appealed to his previous experience in hiring, when there was a situation where he was desperate enough to fill a position that he looked past his concerns, that it had been a lose-lose proposition for his organization and the candidate.

Nacht allowed that he shared Annis’ unease, but noted Ford’d resume and other things he heard in his answers made him a good candidate.  Nacht said, “I do not like him as an interviewee,” saying he preferred crisper answers. What Ford offered, Nacht said, was something more amorphous, what Nacht called “a softer approach.” Nacht said he felt that this approach would be able to generate support in the community for transit by approaching people “in that very Ann Arbor-y kind of way.”

Annis allowed that Ford was a listener. He then recruited Griffith to help him read through a dim copy of a recommendation letter from San Joaquin, which he said was a very strong letter of recommendation. Annis said that on Ford’s list of accomplishments in the letter, the establishment of data metrics and usable information, as well as the charting of objectives were the kind of points that impressed him. But Annis said that the same kind of crispness suggested in the letter was not on display during the interview. Annis said that he was dismayed that Ford didn’t seem to be aware of his own metrics. With respect to the crispness issue, Annis allowed that he’d perhaps been influenced by the other candidate (Carl Jackson), who was extraordinarily crisp.

Nacht noted that Ford had not backed down when pressed by Annis about the possibility of simply CC-ing Ford on requests to the head of the finance department, which he felt was important. Robben said that he was struck by Ford’s emphasis on aligning the people with the position. Nacht followed up on Robben’s comment by saying that Ford had expressed in a diplomatic way that he’ll make tough decisions about people who are not performing up to expectation.

Outcome: The board voted unanimously to enter into negotiations with Ford to become the CEO of AATA.

Note: Ford was not present for the deliberations, but returned to the board room – to applause from AATA staff who attended – to hear the news, and stayed for the remainder of the meeting.

Auditor’s Report

Dave Fisher, of the accounting firm Rehmann Robson, gave the board a clean bill of health after the firm’s audit. The report included an evaluation of controls in place for federally-funded programs, and Fisher reported that there were no questioned costs. In his verbal presentation to the board, Fisher highlighted some suggestions for “closing the loop” on some procedures that included initialing of certain documents, plus the involvement of an additional person in key controls like payroll maintenance. Board chair Nacht confirmed with AATA controller Phil Webb, who attends AATA board meetings, that he was comfortable implementing Fisher’s recommendations.

Then Nacht expressed his dissatisfaction with the level of service that had been provided by Rehmann Robson, saying, “The entire accounting profession seems ‘out to lunch’!” In the fall of 2008, Nacht said, when the country was going through a major financial crisis, AATA had received no communication from Rehmann Robson with any type of advice or concern.

Jesse Bernstein took a bit of the edge off the moment by lightheartedly asking if there was a procedure for disagreeing with the board chair.  Bernstein said that the role of the auditor was to come in once a year and check that procedures were being followed, not to provide financial advice. Annis confirmed with Bernstein – which he did –  that what Bernstein was saying was that “we shouldn’t be beating him up.”

Annis said he thought that much of AATA’s money had been put into U.S. Treasury bills, but that it had been the board in the form of Paul Ajegba, Sue McCormick, and himself who had “taken the bull by the horns” to do that. Webb spoke up to say  that in the summer of 2008, when the property tax revenues had come from the city of Ann Arbor and had hit the bank all at once, he had not done as good a job as he should have in parceling the amount out among several banks in a timely fashion to spread the risk. Queried by Nacht, Webb said that procedures were in place to ensure that the parceling out happened this year. Webb also said that based on the first six months of the fiscal year, AATA was on course to stay within its budget this year.

Purchase of Service Contracts: Increase to Reflect Fully-Allocated Costs

The AATA is funded partly by a property tax millage paid by Ann Arbor property owners. The AATA provides service to communities other than Ann Arbor – Ypsilanti, Ypsilanti Township, Pittsfield Township, and Superior Township – through “purchase of service” contracts. As the AATA staff memo on POSAs indicates, in 2008 the board directed staff to bring the purchase of service contracts in line with the AATA’s actual cost by 2012. By way of example, the city of Ypsilanti’s contract for fixed-route service was for $223,316 in 2009. Staff analysis is that to match the “fully-allocated cost,” that number would rise some 30% to $291,034.

In deliberations on the resolution adopting the increases to the POSAs, Ted Annis ventured that if he were the mayor of Ypsilanti, his “push-back” would be: “Okay, do it less than $103 per service hour!” Annis voted against the resolution.

Outcome: With dissent from Annis, the board adopted the resolution to bring POSAs in line with fully-allocated costs.

Ann Arbor Transportation Plan Update: Conditional Support

In reviewing Ann Arbor’s transportation plan update, which was presented to the board a few months ago by Eli Cooper, the city’s transportation program manager, the board identified $63 million in improvements attributed to the AATA. The resolution adopted by the board stressed that the board supported the plan, but had no source of funding for the $63 million identified. During brief deliberations, Ted Annis said that the wording of the resolution was “beautiful” but that he worried that city council members and other politicians might only remember the headline and forget that the AATA was explicitly not committing to the $63 million.

Outcome: Unanimous adoption of the resolution of conditional support for the Ann Arbor Transportation Plan Update.

Present: Ted Annis, Charles Griffith, Jesse Bernstein, David Nacht, Paul Ajegba, Rich Robben

Absent: Sue McCormick

Next regular meeting: Wednesday, May 20 at 6:30 p.m. at AATA headquarters, 2700 S. Industrial Ave. [confirm date]