RTA Ponders Funding, Leadership After CEO Splits

DETROIT—The abrupt departure of the Regional Transit Authority's prospective chief executive, John Hertel, this week left board members scrambling to respond to a chaotic new reality. At their monthly meeting Wednesday, they were faced with two monumental questions: how to fill the now vacant CEO position and what to do about plans for a ballot measure on RTA funding that could go before voters as early as November.

Last August, following a national talent search, the board selected Hertel, general manager of the metro Detroit SMART bus system, as the RTA's CEO. Although he had been working with the authority for the last several months, he declined to sign an employment contract during that time. Tuesday he announced he would be leaving the RTA to remain with SMART as it pursues a crucial millage renewal scheduled for this summer.

Even before Hertel began working with the authority, board members had been looking into moving ahead with their own funding ballot measure, which could take the form of a vehicle registration fee.

The RTA currently lacks a long-term funding source which it needs to meet operational costs and carry out projects like planning and implementing a high-speed bus network for the region. Despite this dilemma, RTA staff expect the organization’s finances to be solid through the end of fiscal year 2015.

"Start-ups are never easy. There are always bumps in the road," said RTA Board Chair Paul Hillegonds in his opening remarks at the board's Jan. 15 meeting in Detroit. "This is certainly a disappointment for us. It sets us back on the timeline."

Afterwards, a lively discussion ensued on the ballot measure and Hertel's replacement. Both issues are intertwined, as an extended talent search for a new chief could hinder the RTA’s preparation for a four-county vote in November.

Board Member Richard Murphy (Washtenaw) suggested the RTA engage in a strategic goal-setting process before proceeding with the CEO search or the ballot measure. His colleague Matthew Wirgau, however, disagreed, saying their goals were laid out clearly in the legislation which established the authority.

Wirgau, a former administrator with the Federal Transit Administration, also cautioned his fellow board members on the challenges involved with a ballot drive.

"I think everybody needs to realize how hard it is going to be get a funding source passed--not just for Southeast Michigan, it's anywhere in the country," he said. "Let's reopen the search. Let's cast a wide net right now, as fast as we can. .... We may be looking at '15 or '16 before we're ready."

Board Member Roy Rose (Macomb) was hesitant to take up the ballot measure in 2014, pointing out the RTA's current lack of funds for an educational campaign and the possibility of conflicting with millages being planned by service providers like SMART and the Ann Arbor Area Transportation Authority, which is also contemplating one for later this year.

Alluding to Detroit Mayor Duggan's recent appointment of Dan Dirk's as the city's new transportation director, Board Member Lisa Franklin (Detroit) urged her colleagues to capitalize on recent momentum.

"With Hertel in place [at SMART], DDOT with a new start, I think it would be a mistake to open up the search again," she said. "We've already opened it up nationally, and we have two people who did not make it in the principle round that are seasoned, qualified, passionate and ready to make a change."

"We've got to step out on a limb and move forward,” she added. “We've wasted enough time, and if we wait until '15-'16 we're talking 2020 before we even break ground.”

Faced with this lack of consensus, the board decided to wait for a recommendation from its executive committee, which will take up the issues at a Feb. 3 meeting.

As for Hertel's perspective, he shared his thoughts on leaving the RTA, an organization he has long championed, in a statement released Tuesday.

“Because the millage is less than seven months away in all three counties and all the other duties I have at SMART, I will remain as the general manager,” he said. “I look forward to continuing my work at SMART and cooperatively supporting the efforts for improved regional transit in southeast Michigan.”

Although initially critical of Hertel’s selection as RTA chair, Board Member Franklin told Mode Shift that she respected his decision to stay with the suburban service provider.

“To be perfectly honest with you, I really admire Hertel for waiting,” she said. “If he had signed that contract six months ago, that money would have been out of our budget. So I think with him working closely with us and seeing how the RTA is moving and what direction we plan to go, [Hertel]  going back to SMART puts us in even a better position.”

Wednesday’s board meeting also included a presentation from the RTA Public Transit Providers Advisory Council, made up of SMART, DDOT, AAATA and the People Mover. Jim Fetzer of SMART told the board that the group had begun a fare coordination study, was looking into the development of common performance standards and had reached out to the organizers of the planned M-1 Rail streetcar service.

Carmine Palombo of the Southeast Michigan Council of Governments also updated the board on the Woodward Avenue Rapid Transit Alternatives Analysis study, which is looking into the development of a high-speed bus line along Woodward Avenue. SEMCOG recently concluded a series of community meetings on proposed routes and designs for the project. Palombo said the meetings were well attended and that stakeholders at the gatherings appeared to be in rough agreement about the direction of the project.

The RTA and SEMCOG are working together to move forward with the federally funded bus line project. Members of the RTA Board are expected to take up the issue next month.


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