Help pricey at Mass Pike - the decimillionaires, Big Diggers & the "rotting corpse"

July 28, 2008

The Massachusetts Turnpike Authority is getting negative local press for the number of its workers that earn more than $100k/year, while the Turnpike faces financial difficulty. The Boston Herald having obtained the payroll under freedom of information report that 43 Turnpike employees grossed over$100k.

Fulltime senior toll collectors are on $58.7k/yr, the more common regular toll collectors on $53k/yr, part-time toll collectors $39.5k, and seasonal toll collectors $22.9k for a 40 hour week. Some of the fulltime toll collectors boost their annual gross pay by $5k to $15k with overtime. None of the toll collectors so far as we can see make it to $100k/yr.

Still with benefits they are very expensive, and a reason cash tolls are three or four times as expensive to collect as electronic tolls.

Maintenance workers are on similar pay scales to toll collectors on the Mass Pike.

The Boston Herald tracked down two "sign hangers" who pulled in over $100k, although the Turnpike says they are skilled men who also make signs. They apparently worked long hours of overtime replacing signs broken by trucks in the Big Dig tunnels.

At least the LeBovidge sign-hangers aren't being employed to erect signs to stroke the ego of the chief executive - as they were in the days of Republican appointee Matt Amorello. (see "MATT PIKE" sign nearby)

Big Diggers make out like bandits - Mike Lewis double dips

The Boston Globe reports some former Big Dig managers are making out like bandits. Michael P Lewis who as the Turnpike's director of the Big Dig presided over one disaster after another in a decade on the $14.8b project is due to receive between $1.47m and $2.47m in lifetime pension and health insurance payments from the Turnpike, the Globe estimates, even though he was terminated in November last year.

Lewis, 46. is currently taking a Mass Turnpike pension of $73k/year. Despite his sorry record in Boston he managed to get a job next door in Rhode Island. He's at the small state's DOT on $130k/yr.

Other senior Big Dig managers laid off from the Turnpike in their 40s get Mass Turnpike benefits worth 30% of their former salaries for life, with the amounts not mitigated by other earnings.

Alan LeBovidge the CEO of the Turnpike told the Globe the payments to Lewis and other Big Dig managers are a "thorn in our side" and something the Turnpike cannot afford. But he says a state law gives the Turnpike no choice. It mandates the huge payments to employees of state agencies with more than 20 years service who are terminated regardless of their age and their other income.

LeBovidge says he hopes the law will be changed, but it is unclear if the generous benefits to the likes of Lewis can lawfully be taken away.

How can an outsider know if the Turnpike overpays it's top people? Good managers and other professionals anywhere cost $100k+/year. But on a quite modest sized tollroad 43 making over $100k/yr does sound like a lot.

24 of the 43 are on salaries of $100k+, while the other 19 broke the $100k barrier with overtime added to their base pay.

The Turnpike CEO says they are working on getting the right balance between working people overtime and hiring extra staff.

Transit authority has 337 decimillionaires to the Turnpike's 43

The Boston Herald also reports that at the Boston area transit authority (MBTA) there were 337 employees with pay of $100k or more, and the authority is headed up by a guy with name of Dan - we aren't making this up - Grabauskas who is paid $265k/yr. About 6,000 work at the Tee as it is known locally.

LeBovidge at the Turnpike is on $160k/yr which is probably slightly below the average CEO pay on US tollroads.

Whether to back Turnpike refinancing

The current furore about the Mass Pike was set off by a sneaky move by the state Governor Deval Patrick and his lower house allies to allow the Turnpike to refinance $2.4b of Turnpike debt on the state's credit. Turnpike debt is presently "non-recourse debt" more precisely "toll revenue bonds" secured only by the net revenues of the Turnpike - the way most state tollroads are financed.

What is extraordinary about the Mass Turnpike is that it has been saddled with over $2 billion in debt on new construction of the Big Dig without being granted the right to collect tolls on most of that heavily trafficked facility to service that debt.

No other state toll authority has ever been asked to absorb that scale of killer debt obligation without being granted the right to earn revenue there. The harbor tunnels and the Turnpike itself are way too small in revenue potential to carry the cost over-runs of the most expensive and most mismanaged free road in US history.

Patronage, sweetheart deals and financial blunders

The Mass Pike has a heritage of patronage appointments and sweetheart deals with unions. And its former management was conned by too-clever-by-half bankers selling cash-now in return for 'swaption' refinancing that has come back to bite it.

Several other state tollers have similar patronage, union and 'innovative' finance problems. None have a facility with debt like the I-93 O'Neill Tunnel and Zakim Bridge and the I-90 approach tunnels that is all-expense/no-revenue.

That's without any parallel elsewhere.

Only in Massachusetts!

Patrick's sneak blunder

Gov Patrick made a major political blunder trying to slip the "full faith and credit" measure through the legislature by having it quietly attached to an unrelated bridge repair bill. Even the state Treasurer Timothy Cahill wasn't consulted about what is now being widely called a "bailout."

It is a potential bailout, that's for sure. But it only becomes a real bailout if the Turnpike isn't made financially viable meanwhile.

Republicans are reacting with over-the-top rhetoric - one leader said recently the Turnpike is "a corpse rotting from the inside out."

Fact is the management of the Turnpike reached its nadir under Republican governors William Weld, Jane Swift and Paul Cellucci. They put it in the hands of an incompetent meglomaniac, Matt Amorello.

Mitt Romney at least recognized Amorello had to be evicted but was unable to take control of the Turnpike until the last six months of his term.

But Romney did finally start the Turnpike on the road to reform under John Cogliano, though as an election gimmick for his chosen successor he came out at the very end of his term with the harebrained idea that service plazas would pay for the Turnpike while tolls could be abolished. No one believed that and the Republican vote crashed in the election, even along the Turnpike where tolls would supposedly have been discontinued.

On the brighter side internal reforms at the Turnpike started by Romney's appointee Cogliano have been continued, and perhaps accelerated, under Patrick appointee, Alan LeBovidge.

Mary Connaughton, a Romney appointee to the Turnpike board of directors, and a financial consultant, says LeBovidge is "doing a great job" in a difficult environment. She says LeBovidge is concentrating singlemindedly on improving the Turnpike because, independently wealthy and in his mid-60s, he has nothing to lose.

"Abolish it..."

Republicans in the state legislature are now back to an old theme that the Turnpike should be abolished. That's hardly helpful unless they have the courage to suggest an alternative to the Turnpike Authority with some credibility as an improvement - such as finding a private concessionaire to run it.

So far they have shied away from that, preferring to get headlines with "rotting corpse" rhetoric.

TOLLROADSnews 2008-07-28

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