UTA Defends High Salaries on Twitter

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Hot off the heels of a report from the Salt Lake Tribune that the Utah Transit Authority (UTA) doubled the bonuses company executives received last year, the agency defended its lavish salaries and bonuses on Twitter Sunday night.

Not only did UTA hand out $1.7 million in bonuses to company executives in 2013—with some individuals receiving $30,000, a bonus higher than the annual salary of some employees at UTA—but UTA also recently went to the Utah State Legislature, hat-in-hand, asking for the State to allow counties to put tax increases on the ballot to boost their budget.

UTA argued at the time that there was not enough money available to fund new transit programs, due, in part, to UTA taking on large amounts of debt in order to finance the construction of rail programs over the past 15 years. An independent legislative audit from January, 2012, noted that debt payments from the construction of such projects “will consume a larger portion of sales tax revenues and impose a financial strain on UTA.”

But the subject of the Sunday evening Twitter debate wasn’t over the bonuses or budget shortfalls, it arose from the lavish salaries UTA executives are raking in. Retiring rail service general manager Paul O’Brien was paid $450,618 last year (including bonuses). UTA General Manager Michael Allegra netted over $346,000—including almost $50,000 in leave and over $87,000 in benefits. UTA General Council Bruce Jones received over $333,000 in pay and bonuses. To put those numbers in perspective, the Governor of Utah’s annual salary is $151,294.

When compared to similar positions in other transit authorities across the country, such pay rates are quite lucrative. The Executive Officer of the largest transit system by ridership, Carmen Bianco of the New York City Transit Authority, makes just under $175,000 annually. New York’s subway system alone sees an estimated 1.9 billion riders annually, and its bus system sees 791 million riders each year. The General Manager of the Massachusetts Bay Transportation Authority (MBTA), Beverly Scott, who runs the third largest transportation system in the country, receives an estimated $220,000 annually, managing an estimated total ridership of 474 million annually.

Comparatively, UTA only has a total annual ridership of 44 million.

These facts, however, did not deter UTA from defending its position on Twitter Sunday night. In an exchange between the official @RideUTA account and Utah Political Capitol co-founder Eric Ethington (@EricEthington), UTA claimed that “all salaries are based on market value and are below or average for the industry.” Ethington, now a resident of Boston, further queried which “market value” scale UTA was using, as the UTA general manager makes more than the heads of the Los Angeles, Denver, San Francisco, Phoenix, and Boston transportation authorities.

The UTA official running the account noted that the link Ethington had provided was from 2010, and that it may no longer be correct. The official then stated they would follow up with Ethington after they looked into the figures.

UTA has yet to respond to Ethington’s request for further clarification.

Here’s the full conversation:

12 Replies to “UTA Defends High Salaries on Twitter

  1. Mr. Haring,

    Your blog post contains innacuracies and ommissions. Your salary comparisons are apples to oranges. The salaries from transit agencies outside of Utah that you refer to are base salaries. You compare them to total compensation of UTA officials that includes base salary, vacation leave, sick pay and retirement accounts.

    Also, when you refer to Paul O’Brien’s compensation for last year, you left out that he received a one-time vacation payout and transfer of sick time to a health account because he was retiring, something available to all UTA employees. That was part of the twitter conversation, if you care to review.

    Sincerely,

    Remi Barron
    Senior Media Relations Specialist
    Utah Transit Authority

    1. Hello, Mr. Barron;

      I’m a little shocked that you would consider annual benefits, leave, and bonuses invalid to the conversation. Any amount of compensation is funded via tax dollars, so while it may be categorized in a different way for tax purposes, it amounts to the same result for the public.

      If you read the supporting documents I quoted to @rideUTA on Twitter, you’ll note that the executives of other transportation authorities which are much larger than Utah’s are making far less than Mr. Allegra (eg. the head of the Los Angeles system makes almost $309,000 and does not have additional incentives or bonuses).

      It seems extremely disingenuous to claim that because a base salary may be lower, additional pay should be discounted.

      On Twitter, @rideUTA claimed that all salaries and compensations are based on “fair market value.” What market value is being used to reach that conclusion? I am struggling to find any other example of an executive of such a relatively small transit system making more than those managing major systems.

      1. Eric, he wasn’t invalidating consideration of benefits, leave, and bonuses. He was saying that if you’re gonna compare compensation in Salt Lake to compensation in LA, you should measure it in the same way. Totally fair.

        1. Cole, I would agree that Mr. Barron has a point, except that in the Los Angeles example I provided, all additional incentives were already included in the $309,000. Just because other cities include their total benefits in their salary figure, while UTA chooses to try and hide additional pay be relabeling as benefits or incentives, doesn’t mean it should be a separate comparison.

          Let’s also remember, UTA services 169,000 people per day. A far cry short from the 5.1 million a day and 1.3 million a day the other cities are managing. Compensation for UTA execs should in no way be comparable to those other cities.

  2. I agree with Eric. If UTA is going to state that Eric’s anaylsis is an apples to oranges comparison, it should provide an “apples to apples” comparison to validate its position that UTA executives’ salaries are at or below market average. However, even if UTA executives’ salaries are on par with New York, Boston, Los Angeles, and Washington DC, is that a fair market comparison given differences in market sizes and cost of living? I don’t think so. The comparison should also include transit systems of comparable capacity.

  3. So here’s the larger point I’m trying to get at:

    UTA service in Utah is very poor. Even UTA admits that. Service ends early in the evening, routes (bus+Trax) don’t cover enough grounds to make regular use viable for many people. And fare prices are double what they should be.

    When these concerns are presented to UTA, the answer back is almost always about budget shortcomings. That’s a fair point, but if the budget is so minimal (so minimal in fact that drivers and other employees are rarely paid fair wages) – then WHY are the UTA executives raking in such lavish salaries? How does it seem rational or sane that the head of an incredibly small transit authority is making more money than those who are running massive transit systems in far larger cities?

    UTA suffers from top-heavy corruption like no other public department in Utah (at least, not since John Swallow left the Attorney General’s office), and the department’s poor PR rep’s forced line of “we’re competing with fair market value” on executive salaries is not only an insult, it’s down right pathetic.

    1. You are misinformed Mr. Ethington. UTA’s system is the envy of many nationwide, even those that can boast more riders. Our system is a comprehensive one with commuter and light rail, as well as an extensive bus system. Our geographic area is larger than most, which makes costs high. Even so, we have nothing but success stories to tell. UTA added three new rail lines last year. Our bus service was increased. Our ridership reached an all time high of 44 million riders last year and will increase again in 2014. Our dedicated employees manage the agency well, and we came in $7 million under budget last year.

      As for your poor comparison, it’s understandable. People outside of the transit industry often don’t understand that titles vary.

      Remi Barron

      1. Your geographic are is larger than most? Please. Both NYC and Boston’s systems cover larger areas (I’d have to double check LA’s geographical size).

        As for your petty insults.. well, I’ll just laugh.

  4. While overseeing an annual budget of $13 billion and employments rolls in the tens of thousands, the MTA CEO and Chairman earns $350,000 a year and a housing bonus, but by many accounts — particularly that of the TWU — that compensation is far more than he deserves. Even though a mid-six-figure salary sounds good, there’s an argument to be made that New York State is under-compensating the MTA head, and that’s just what Josh Barro put forth on Bloomberg News yesterday.

    As Barro argues, we as a society should be willing to pay top government officials far more than we do, in part in order to entice them to stick around and in part in order to entice them to do a good job. As he notes, in the private realm, someone tasked with leading a $13 billion organization would be compensated much better than the MTA head is, and as we saw with Jay Walder, when the right opportunity — notably at triple the salary — comes around, jumping ship is on the table. As Barro argues of recent MTA departures:
    Unlike presidents and governors, it’s hard to say that MTA executives are compensated in prestige: As Lhota’s poll numbers make clear, the public generally doesn’t know who runs the MTA, and if they do, they’re predisposed to think he’s doing a bad job. So Walder left for a job that … pays more and Lhota to seek one that would bring greater non-monetary benefits…

    Voters expect a lot from top public officials. We want them to be talented managers who run the government well. We want them to stay in their jobs long enough to see projects to completion. We want them not to be corrupt. And we want them to work for a lot less than they could make elsewhere. Dropping the last goal would make it easier to achieve the first three, which is a reason to give Prendergast a big raise.

    Over the last few years, we’ve tried to figure out how to get transit executives to stay in place for longer than a year or two. Absent employment restrictions in contracts — which aren’t legally permissible — a higher salary may be the only way to go. It’s a tough argument for the public to swallow, but how else can we retain top talent anyway?

    http://secondavenuesagas.com/2013/04/24/is-the-mta-ceo-paid-enough/

  5. Somehow, no one seems to compare apples to apples.

    CEO Arthur Leahy of Los Angeles Metro, is paid a salary of $310,000. Per the Metro website, Leahy’s benefits include “deferred compensation and transportation/insurance/living expenses for total employer contribution of 42.5% of salary.” That adds up to $441,750 total compensation.

    Let’s not forget that Mike Allegra has worked for the Utah Transit Authority since the 70’s. There are a number of factors that need to be considered. Is your CEO a political appointed position (which will generally receive a smaller salary) or a professional (engineer, MBA, etc) where the salaries are likely to be higher.

    It’s ridiculous to compare the Governor to professionals. The Governor’s Chief of Staff makes more than the Governor. Maureen Riley at the SL Airport makes 250K+.

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