RIDING THE METRA RAILS WITH KATHY POSNER
Kathy PosnerIn 1974 the Illinois General Assembly created the Regional Transportation Authority (RTA) to coordinate public transpiration throughout the six-county Chicago metropolitan region. In 1984 the “Metra” name was introduced as the name for the commuter rail system. According to the Metra web site, “Today, Metra directly operates seven of its lines and contracts with two freight carriers to run four others. Metra’s contracted services include the Burlington Northern Santa Fe line to Aurora, as well as the three Union Pacific lines: the UP North Line to Kenosha, Wisconsin; the UP Northwest Line to Harvard, with branch line service to McHenry; and the UP West Line to Elburn that was extended from its former terminus at Geneva in 2006.”
The general public did not pay much attention to the running of Metra unless there were stories of rate hikes—until last year when the Executive Director, Phil Pagano, committed suicide by stepping in front of a Metra train, amid allegations of major fiscal fraud and disclosures that he had taken $475,000 in unapproved vacation pay and forged memos. That act finally brought major scrutiny to how Metra was run.
Last week, IL State Rep. Jack D. Franks (D-Woodstock) held a press conference to expose excessive and wasteful spending among members of the Metra Board. The Metra Board oversees the suburban rail system that serves the City of Chicago and the surrounding suburbs. Franks has worked with State Sen. Susan Garrett (D-Lake Forest) to pass legislation aimed at reforming and bringing transparency to Metra, as well as other Chicago transit agencies.
“Transit agencies have spent thousands of dollars on high-priced lobbying efforts to convince lawmakers they need more taxpayer dollars,” Franks said. “But a closer review of where that money is going shows there is an outdated and bloated payroll that includes far too many perks for board members who don’t really need them.”
Franks contends the Metra Board has systematically and intentionally misclassified its board of directors as ‘employees,’ rather than the outside ‘independent directors’ that they are. By definition, outside directors are not employees. As a result of this intentional misclassification, Metra does not issue 1099’s for board member benefits. Rather they are classified as employees and are issued a W-2 in which these multimillion-dollar, taxpayer funded perks are not taxed as income. Notably, no statutory authority exists to classify members in such a way.
As an example, Carole Doris, the Metra board chair, was treated as an employee but not reimbursed as one. She took limousines to $500 per night hotels and was reimbursed for all expenses when other employees would not be. Other state employees are entitled to certain per diem and would be responsible to pay, out of pocket, for such lavish expenses. Doris was fully reimbursed by Illinois taxpayers.
Additionally, former State Senator and former McHenry County Republican Chairman Jack Schaffer serves as another bad example. Schaffer is the Metra board’s Treasurer. Senator Schaffer retired with the General Assembly Retirement System (GARS) on January 14, 1999 after 24 years of service. His final salary on which his pension was based was for the position of Commissioner of Banks and Trusts, a job covered by the State Employees’ Retirement System (SERS). Currently, Senator Schaffer receives $8,250.85 per month for GARS and $799.27 per month from SERS – totaling $9,050.12, a figure that will increase 3% annually.
Shaffer is drawing two lucrative pensions, along with free health care provided to retired state senators. His Metra board position, which involves one meeting per month, affords him yet another pension. On any other board, a part-time independent contractor would be not eligible for a pension. All that is on top off a $15,000 Metra board salary. Additionally, over the past five years, Schaffer has taken over $105,000 in Metra-paid health care, even though one of his state pensions already provides it.
“On any other board, Schaffer would receive a 1099 and be taxed on the health care perk, but because he has been improperly classified as an employee this taxpayer backed perk is entirely tax free,” said Franks. “Not only has Schaffer unnecessarily taken $105,000 in health benefits, he has shorted taxpayers tens of thousands of dollars in taxes owed on these perks because of the intentional misclassification of his position.”
“I will ask the proper authorities to investigate whether these actions rise to sanctionable activity and call for the immediate removal of Schaffer as a board member. Furthermore, I demand that he repay the State for all of the duplicative health care costs and pay taxes on those perks,” Franks added. “Governor Quinn is seeking to take $85 million from road funds to give to Metra for operations while tax dollars are being squandered, the Metra board’s culture of entitlement and lack of accountability has gone on far too long.”
Franks has introduced legislation to remove the salaries and benefits for all transit agency board members and to consolidate the Metra, Regional Transportation Authority (RTA), Pace, and Chicago Transit Authority (CTA) boards into a single agency.
“Metra Board members are supposed to be independent watchdogs appointed by their respective county board chairmen,” Franks said. “Instead we have political cronies who have allowed its executive director to loot the system and board members doing prison time for taking bribes.”
So how did the Chairman of the Board of Metra react? Davis issued a prepared statement that said she considers the treatment of Metra board members no different from that of the CTA, Pace and RTA boards and numerous state-sanctioned boards. The old “everybody else is doing it why can’t we” defense does not cut it with me.
Maybe the Illinois legislature should take a page from Mayor Daley’s playbook and just encourage everyone to bike to work.
Read More From Planet Posner Here.....
The general public did not pay much attention to the running of Metra unless there were stories of rate hikes—until last year when the Executive Director, Phil Pagano, committed suicide by stepping in front of a Metra train, amid allegations of major fiscal fraud and disclosures that he had taken $475,000 in unapproved vacation pay and forged memos. That act finally brought major scrutiny to how Metra was run.
Last week, IL State Rep. Jack D. Franks (D-Woodstock) held a press conference to expose excessive and wasteful spending among members of the Metra Board. The Metra Board oversees the suburban rail system that serves the City of Chicago and the surrounding suburbs. Franks has worked with State Sen. Susan Garrett (D-Lake Forest) to pass legislation aimed at reforming and bringing transparency to Metra, as well as other Chicago transit agencies.
“Transit agencies have spent thousands of dollars on high-priced lobbying efforts to convince lawmakers they need more taxpayer dollars,” Franks said. “But a closer review of where that money is going shows there is an outdated and bloated payroll that includes far too many perks for board members who don’t really need them.”
Franks contends the Metra Board has systematically and intentionally misclassified its board of directors as ‘employees,’ rather than the outside ‘independent directors’ that they are. By definition, outside directors are not employees. As a result of this intentional misclassification, Metra does not issue 1099’s for board member benefits. Rather they are classified as employees and are issued a W-2 in which these multimillion-dollar, taxpayer funded perks are not taxed as income. Notably, no statutory authority exists to classify members in such a way.
As an example, Carole Doris, the Metra board chair, was treated as an employee but not reimbursed as one. She took limousines to $500 per night hotels and was reimbursed for all expenses when other employees would not be. Other state employees are entitled to certain per diem and would be responsible to pay, out of pocket, for such lavish expenses. Doris was fully reimbursed by Illinois taxpayers.
Additionally, former State Senator and former McHenry County Republican Chairman Jack Schaffer serves as another bad example. Schaffer is the Metra board’s Treasurer. Senator Schaffer retired with the General Assembly Retirement System (GARS) on January 14, 1999 after 24 years of service. His final salary on which his pension was based was for the position of Commissioner of Banks and Trusts, a job covered by the State Employees’ Retirement System (SERS). Currently, Senator Schaffer receives $8,250.85 per month for GARS and $799.27 per month from SERS – totaling $9,050.12, a figure that will increase 3% annually.
Shaffer is drawing two lucrative pensions, along with free health care provided to retired state senators. His Metra board position, which involves one meeting per month, affords him yet another pension. On any other board, a part-time independent contractor would be not eligible for a pension. All that is on top off a $15,000 Metra board salary. Additionally, over the past five years, Schaffer has taken over $105,000 in Metra-paid health care, even though one of his state pensions already provides it.
“On any other board, Schaffer would receive a 1099 and be taxed on the health care perk, but because he has been improperly classified as an employee this taxpayer backed perk is entirely tax free,” said Franks. “Not only has Schaffer unnecessarily taken $105,000 in health benefits, he has shorted taxpayers tens of thousands of dollars in taxes owed on these perks because of the intentional misclassification of his position.”
“I will ask the proper authorities to investigate whether these actions rise to sanctionable activity and call for the immediate removal of Schaffer as a board member. Furthermore, I demand that he repay the State for all of the duplicative health care costs and pay taxes on those perks,” Franks added. “Governor Quinn is seeking to take $85 million from road funds to give to Metra for operations while tax dollars are being squandered, the Metra board’s culture of entitlement and lack of accountability has gone on far too long.”
Franks has introduced legislation to remove the salaries and benefits for all transit agency board members and to consolidate the Metra, Regional Transportation Authority (RTA), Pace, and Chicago Transit Authority (CTA) boards into a single agency.
“Metra Board members are supposed to be independent watchdogs appointed by their respective county board chairmen,” Franks said. “Instead we have political cronies who have allowed its executive director to loot the system and board members doing prison time for taking bribes.”
So how did the Chairman of the Board of Metra react? Davis issued a prepared statement that said she considers the treatment of Metra board members no different from that of the CTA, Pace and RTA boards and numerous state-sanctioned boards. The old “everybody else is doing it why can’t we” defense does not cut it with me.
Maybe the Illinois legislature should take a page from Mayor Daley’s playbook and just encourage everyone to bike to work.
Read More From Planet Posner Here.....
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