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* Background is here. My weekly syndicated newspaper column…
“What was supposed to be a simple storage warehouse for the Metra transit agency has now buried the nation’s fourth-busiest commuter rail system in a sinking money pit, the ABC7 I-Team has learned.”
The Chicago broadcast station’s scoop last week is an almost perfect encapsulation of why northeastern Illinois’ mass transit fiefdoms need to be busted and reformed.
For your background, the Chicago regional transit system is facing a steep $730 million fiscal cliff in fiscal year 2026, which starts a year from July 1. Gov. J.B. Pritzker and several legislators are demanding that, in exchange for any new operating money, the management of the Chicago Transit Authority, Metra, Pace and the Regional Transportation Authority all be reformed. They’ve all operated as fiefdoms for decades, resisting accountability, cooperation and any attempts to streamline management.
The CTA is the most well-known villain in the transit governance debacles, but it clearly ain’t alone.
Metra bought a south suburban warehouse for $6.8 million in 2020. The purchase did not follow any formal purchasing procedures because, apparently, Metra doesn’t have any. Nobody at Metra would even admit to knowing who touted the property, which was owned at the time by a Metra hand sanitizer provider.
“The [internal Metra report] also stated it could not identify which Metra staffer initially brought the Harvey warehouse property sale option to the Executive Leadership Team prior to its board approval,” ABC7 reported.
Was the property brought to the agency by an independent broker? “No,” Metra’s CEO Jim Derwinski told his board last month. “(T)his was mostly our engineering and materials management team out looking for something that was available,” Derwinski said, according to the ABC7 report.
Unreal.
“Derwinski said the agency was facing potential layoffs of its workforce [during the pandemic], and Metra’s executive leadership team saw the building purchase as an opportunity to repurpose employees to work on and make improvements to the warehouse,” the station reported. Um, they have no union contracts over there?
Metra bought the property “as is” and has since spent another $11.1 million. But the property will require “tens of millions of dollars more to finish” and will take at least two more years, the report continued.
OK, look, Harvey definitely needs investment. And I will be the first to admit our state procurement laws are an unnecessarily complicated mess. Small businesses and nonprofits simply do not have the ability to navigate those laws unassisted, which makes handing out grants an excruciating process.
But, I mean, what the heck is going on over there? Metra is throwing tens of millions of dollars at a warehouse without any sort of purchasing process? The board seemed to be surprised at how deep a hole the agency had dug itself into during its meeting last month. That’s a massive failure by the board, but where the heck are the operating rules?
The thing that just completely blew my mind about the ABC7 story was Derwinski’s cavalier attitude about the taxpayer money it had spent and is committed to spending in the future.
Metra was running short on operating dollars during the pandemic, Derwinski explained, so the agency “saw an opportunity to shift workforce into this building at that period of time to keep them working under capital dollars.” The original purchase was made with state Rebuild Illinois bond funds.
“The fiscal cliff is an operating dollar problem,” Derwinski said. “The capital dollar side about making, taking care of the assets that we’re entrusted to take care of, that’s this conversation right here. The fiscal cliff, it’s real. It’s big. But that really has to do with the operation.”
Excuse me, but how the heck is the state government supposed to trust Metra to spend a massive operations bailout wisely when it’s blowing tens of millions of capital dollars on a boondoggle with no discernible process and almost criminally lax oversight and shrugging it all off as no big deal?
This is exactly why reforms are necessary.
Bust. The. Fiefdoms.
posted by Rich Miller
Monday, Jun 17, 24 @ 7:36 am
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Great stuff thanks Rich.
Comment by I hate Scott Turow Monday, Jun 17, 24 @ 7:56 am
Here is what most don’t understand: the politicians that appoint the board members like the structure.
Comment by Just Me 2 Monday, Jun 17, 24 @ 8:05 am
Excellent column.
(I also appreciate the handle “I hate Scott Turow.”)
Comment by Keyrock Monday, Jun 17, 24 @ 8:16 am
This goes for both sides of the aisle - stop appointing political buddies that are totally unqualified for these positions at the state and federal leve; - these boards are prime examples - plus Pete Bittigieg at the Federal level.
While we are at it get rid of the Illinois Sports Authority and let sports stadiums go to referendum like in KC. Stop giving welfare to Billionaires
Comment by Stop Appointing Political Buddies Monday, Jun 17, 24 @ 8:21 am
If you buy a property “as is” you better have a great engineering report that the property will meet your use requirements. I suppose it needed an EPA clean up too.
Comment by DuPage Saint Monday, Jun 17, 24 @ 8:24 am
This reminds me of the Warehouse in Ash Street in Springfield. A friend of Governor Rauner who lives in New York buys it and weeks later CMS leases it, insulates it and puts in a new HVAC system so the metal shed will be suitable to be used for long term-storage. Governor Rauner overflowed with connivances.
Comment by Stacey Erickson Monday, Jun 17, 24 @ 8:43 am
It’s so simple, when there’s a demand slowdown you just tell IUOE Local 150 that they’re Laborers now. Then they get busy refurbishing warehouses for you.
That’s definitely how that all works. Can I have some more millions now?
Comment by Larry Bowa Jr. Monday, Jun 17, 24 @ 9:09 am
If we don’t bust the fiefdoms, can we at least start proclaiming titles of ennoblement for them? Dibs on Marquess of Mars (Station). I also proclaim Rich Miller the Duke of Ogilvie.
Comment by TJ Monday, Jun 17, 24 @ 9:29 am
There were at most 10 employees working on the renovation of the warehouse, so Derwinskinis grasping at straws for an answer. Project was pushed by his two top hands and the day to fay oversight manager all of a sudden retired. But no worries, he went to work for Metra’s PMO.
CTA gets the deserved bad press, but Metra has top-level bloated salaries with nowhere near the ridership. Metra has 13 employees making more than $200K/year, Derwinski leading tge way at $325K.
The Board approved this purchase and no one even asked about a property inspection. Metra has a Real Estate department, where were they. Saddest part is that this will all fade away and nothing will happen. Nothing to see here.
Comment by James the Intolerant Monday, Jun 17, 24 @ 9:31 am
New Jingle: “Metra, the way to really spend.”
Comment by thisjustinagain Monday, Jun 17, 24 @ 11:51 am
As a daily Metra rider this doesn’t surprise me. I’m still hoping they will right size the schedules so my train is not so crowded. Management and operations is not their forte.
Comment by EP1082 Monday, Jun 17, 24 @ 12:10 pm
I rode Metra today, the arrogance is striking and when trains are moving out of order, they can’t even care to send updated notices for goodness sake.
Break it up.
Comment by Rahm's Parking Meter Monday, Jun 17, 24 @ 12:28 pm
I was today years old when I realized that PACE and the RTA were separate entities. Why?
Comment by The Way I See It Monday, Jun 17, 24 @ 12:30 pm
$6.8 million is nothing.
$730 million is peanuts.
Wake me up when $12 billion of debt backed with sales tax revenue without an adequate revenue stream is news.
The pay the executives bonuses to lose money who can’t pay the vig without scooping and tossing.
Rules are meaningless without accountability.
Comment by Chicago 20 Monday, Jun 17, 24 @ 12:39 pm