News Story

Top Transit Chief Salaries Criticized by State Lawmaker

State Rep. Dave Agema, R-Grandville, believes that some of the people working for Michigan's public busing systems make too much money. Peter Varga, CEO of Grand Rapids’ Interurban Transit Partnership (The Rapid), made it on to Agema’s radar after the politician discovered that Varga was paid $193,000 last year.

“Here we are in a recession and these are highly subsidized routes that don’t make money,” said Agema. “I hate telling people what their salaries should be… but I think $193,000 is a little excessive. It seems to be out of whack with the economy.”

Last month, revealed that a bus driver in Lansing was paid $140,000 last year.

The Grand Rapids’ bus authority has an operating budget of $32.5 million and 308 employees.

Ann Arbor Transportation Authority CEO Michael Ford was paid $183,895 last year.  AATA has an operating budget of $24.4 million and 171 employees.

Flint’s Mass Transit Authority general manager Robert Foy was paid $106,800 in 2009. MTA has 450 employees and a $22 million operating budget.

Varga, who has been CEO since 1997, said his salary was determined by his board. He said his base salary was $182,000, and that the extra was vacation time he cashed out and deferred compensation.

Don Lawless, chairman of the Grand Rapids bus authority’s board, said in an e-mail that the authority “requires a CEO leader, not a ‘minder.’ ”

“The board believes (as do many community leaders that make many things happen in Grand Rapids) that public transit is a key component to leveraging all the assets we have in the community to secure its future. We have a goal of incorporating public transit choices into the fabric of the community’s future, in addition to providing transit to those who cannot readily obtain access to private vehicles. That requires a certain level of leadership.”

Lawless also wrote that Varga was paid below industry averages when he started. In 2005, the board approved raising Varga’s pay over a three year period up to that of 75 to 80 percent of his peers. According to Lawless, any other raises were for completing his work plan.

“The board recognizes Peter’s value and many contributions to the organization. We want to ensure that his salary is consistent with what other transit systems around the country offer for a CEO of his talent and experience level.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.