"1st class compensation, perks for Detroit airport execs"

Saturday, June 14, 2008

SIX-FIGURE SALARIES, CARS AND TRAVEL
1st class compensation, perks for airport execs
With independent oversight came more pay and privileges
BY JENNIFER DIXON
The Detroit (MI) Free Press


In the six years since control of Detroit Metro Airport shifted from Wayne
County to an independent authority, the number of executives making more
than $100,000 has more than doubled.

And while other public officials in Michigan gave up free vehicles to save
money, the number of airport executives with car perks also has grown -- by
13. The travel budget, meanwhile, is up eightfold.

Today, Metro has 46 executives who make more than $100,000.

Most large airports surveyed by the Free Press have fewer executives making
that much money and fewer car perks. Only Dallas-Fort Worth and
Minneapolis-St. Paul, of the eight airports surveyed, had more employees
than Detroit Metro making at least $100,000. Only Dallas gave out more cars
than the Wayne County Airport Authority.

Hartsfield-Jackson Atlanta International, the world's busiest passenger
airport, has just seven executives with six-figure incomes. And although
Detroit gives 53 executives a vehicle or car allowance of up to $750 a
month, Atlanta provides take-home cars to only 11 employees.

"The spirit and the theory of the Airport Authority was to provide for more
accountability and transparency," said John Stewart, a former member of the
Michigan House who voted for the authority in 2002. "Some of that has been
accomplished, but it certainly seems like we've got to take a second look at
what's going on out there. Where's the oversight?"

Lester Robinson, the authority's chief executive, earns $215,759 and
defended the salaries, calling them competitive in the field. He also
defended the vehicle policy as a "traditional part of our compensation
arrangements" And he said Atlanta may underpay its executives.

Robinson's salary is in the range of chief executive salaries at airports of
comparable size.

Robinson also contends the authority isn't like other public agencies. It
must spend the public's money to make money, he said, citing the need for
executives to travel frequently to persuade airlines to fly from Detroit or
add routes.

"You can't sell air service sitting at your desk," Robinson said. "Our role
is to provide economic development and air service to the community."

Michael Conway, an airport spokesman, said the airport is better run today
than in 2002.

"We feel our customers are happier," he said. "The airport is run a lot more
like a business. It's less bureaucratic and more nimble. We can react to
crises ... much more quickly."

How the authority works

Then-Gov. John Engler and the Legislature created the Wayne County Airport
Authority in 2002 to improve oversight of Metro Airport amid investigations
into corruption in contracts and wasteful spending.

The authority, which also oversees Willow Run Airport, is funded largely by
travelers and airlines. It receives fees from passenger tickets and
airlines, revenue from parking and other concessions, and federal grants.
Revenue last year totaled $390 million.

Though the authority board is autonomous from the county, four of its seven
members are appointed by the county executive. The governor appoints two,
and the Wayne County Commission names the other.

Robinson, the CEO, approves the salaries of his executives, based on a
recommendation from human resources. Only Robinson's pay is directly
approved by the board.

"It is not the board's role to determine the pay of Mr. Robinson's executive
staff," Conway said. "That authority clearly rests with Mr. Robinson as per
his contract.... However, any board member who asks for any information,
including salaries, is provided that information in a timely manner."

Lawmakers who supported the authority questioned the board's oversight.

"There are supposed to be checks and balances," said former Sen. Glenn
Steil, who sponsored the law. "Obviously, it ain't working."

Bernard Parker, an authority board member since late 2006 and a Wayne County
commissioner, said he was unaware of the size of the salaries and car perks
until contacted by the Free Press.

"That would surprise me and concern me," Parker said.

He also said the airport has to focus on more than making money, saying it
has a responsibility to keep costs under control for the travelers, who
contribute a large part of the airport's budget.

The economy factor

With the state's economy in tatters, other public officials have forfeited
some perks or had their salaries cut or frozen. State residents also have
seen cuts in services.

Members of the state Supreme Court and Court of Appeals gave up their state
cars last year after a Free Press report. So did top members of the Granholm
administration.

Also last year, House Speaker Andy Dillon banned representatives from
traveling out of state at taxpayer expense, while Senate Majority Leader
Mike Bishop maintained a similar policy imposed by former Senate leader Ken
Sikkema.

The state also has sold five state planes and more than 2,700 fleet
vehicles.

In Wayne County, executive salaries were cut 14% in 2003 and some county
agencies have trimmed budgets as much as 25%. In Macomb County, meanwhile,
elected officials took a 2-year pay freeze, and county vehicles are replaced
less frequently. Oakland County offered retirement incentives and froze
hiring.

Lower-ranking workers at Metro Airport also have been squeezed. The
authority contractor who operates Metro's parking lots and garages has
lowered the wages of parking attendants.

Steve Hicks, president of Teamsters Local 283 in Wyandotte, said after the
airport hired a new contractor in 2002, wages fell from $14 to less than $9
for garage attendants at the McNamara Terminal. They and the cashiers at the
Smith Terminal now make $12.25. Others make $13.25.

"They should be ashamed of what they're doing" with public money, Hicks said
of executive spending.

Less are getting more

In 2002, the last year Wayne County controlled the airport, 765 county
employees worked in airport operations, with 20 making more than $100,000
and 39 with access to a take-home car.

The airport now has fewer employees, 699. The number with take-home vehicles
has stayed the same, 39, but 14 receive a monthly car allowance of $600 to
$750. In 2002, records show, only one person working for the airport
received a flat-rate mileage allowance.

Over that same period, spending on salaries, wages and fringe benefits for
all authority employees grew 19%, according to the authority's 2007
financial report. A Free Press analysis found the salaries of county
executives who moved to the airport rose by an average of 45%.

By contrast, Wayne County workers saw their salaries, wages and fringes grow
just 2.7% from 2002 to 2007 -- well below the 16% rate of inflation over
that period.

As the county's airport director, Robinson made $157,013 in 2001. As the
authority's chief executive officer, he makes $215,759, an increase of 37%.
As the airport's second in command when it was run by the county, Daniel
Kerber earned $127,644 in the No. 2 job at the authority. He now earns
$188,613 as executive vice president/operations.

Airport officials defended the raises, saying executives have more complex
jobs than when they were at the county.

Thomas Naughton, who earns $190,436 as the airport's chief financial
officer, also contended that when the cost of operating the McNamara
Terminal, a new runway and 11,000-space parking garage are subtracted, the
airport is actually spending less today than when it was a county
department.

Naughton was the county's chief financial officer before moving to the
airport. He made $146,102 in that position seven years ago.

Wayne Doran, a member of the authority board since 2002, said an outside
consultant recommended the higher salaries when the authority took control
of the airport.

"It was our challenge to structure this so we could bring in executives who
had experience on an airport basis, not on a county employee basis," Doran
said. "Our challenge was to make a good business successful and keep it
growing. We're doing our desperate best to do that. You get good people to
do good jobs."

Authority records show most of the top 10 executives at the authority came
from Wayne County jobs, including Robinson, Naughton and Kerber.

The authority has budgeted $790,000 for travel this year. That's down from
$853,223 last year, when the Free Press first raised questions about the
authority's heavy travel. But it is far more than in 2002, when the airport
spent about $98,000 on travel, according to county and airport records.

Conway said the 2002 costs are deceptively low because they reflect travel
only of airport officials. He said other county officials also traveled on
airport business that year. Conway also defended the higher travel spending
in recent years, arguing the trips have paid off -- bringing more airlines
to Detroit, including low-cost carriers.

The authority's board meets about eight times a year and has no staff of its
own to monitor or pick apart authority spending.

Brendan Dunleavy, a former Wayne County auditor general, said that's a
problem because board members "only know what management tells them."

The authority does have an internal auditor, but the auditor reports to
Robinson, and Dunleavy said that also is questionable.

"The inmates are in charge ... with no oversight at all," said Dunleavy, who
warned of this problem when the authority was set up.

Robinson said he would never interfere with the auditor's independence and
noted that it was the Legislature that called for the auditor to report to
him.

Conway said the board's audit committee also can ask the internal auditor to
"audit anything, and they have."

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