Metra Board Awards Nearly Half-Million Dollar Settlement to Former CEO

Offering Metra’s former CEO more than $440,000 in a severance package, as well as a settlement that entitles him to more money if he doesn’t find a job in 13 months, was done to avoid taking on higher costs in court, according to Metra Board Chairman Brad O’Halloran.

But that decision has drawn the attention of lawmakers in Springfield, who are calling for an investigation. The deal has been shrouded in secrecy due to a confidentiality agreement.

“There is a difference of opinion, but also interpretation, of what the past executive director’s rights were under his agreement and what we felt the rights were,” O’Halloran said Monday. “So if you read the agreement, and you say why didn’t you settle for less, we couldn’t. If we could have we would.”

On June 21, the Metra Board of Directors voted 9-1 to accept Alex Clifford’s resignation along with a settlement that would buy him out of the remaining eight months on his contract.

Clifford was granted $442,237 to cover what was left of his salary, which was $252,500 per year, as well as severance, insurance, attorney costs and relocation coverage. The agreement also gives Clifford up to an added $300,000 if he does not find another job within 13 months.

“The cost of litigation for the agency would’ve far outweighed the settlement costs,” O’Halloran said.

According to O’Halloran, costs associated with the settlement will not be passed on to Metra passengers.

“We have a fund set up, a settlement fund, for this type of issue and others, including workman’s comp for example,” he said.

While specific reasons for Clifford’s departure after about five months of closed session negotiations haven’t been disclosed, O’Halloran said among the goals moving forward for Metra is to “build relationships with the key stakeholders.”

Those stakeholders include state and federal legislators, as well as the unions representing Metra staff, O’Halloran said.

“We have 11 different unions we work with and we need to make those relationships stronger,” O’Halloran said. “Two of our unions right now are in federal mediation, which we’ve never had before in the history of the agency.”

He also said mending is necessary with senior Metra staff, as well as with Burlington Northern Sante Fe and Union Pacific.

No plans have been made to fill Clifford’s former position, O’Halloran said.

Instead, Metra Deputy Executive Director/Chief Operating Officer Donald Orseno and Deputy Executive Director of Administration Alex Wiggins will run daily operations. Orseno has spent 39 years in the railroad industry, and worked at Metra since 1984. Clifford hired Wiggins in 2012 from the North County Transit District in Oceanside, California, where he worked as the chief administrative officer. Previously, Wiggins worked as Chief of Staff for the Seattle Department of Transportation.

“They both have assumed specific departments that reported directly to Alex Clifford, and are now reporting directly to either one or the other,” O’Halloran said.

“Both are very strong. Both want to work together as a team. We want to continue that. We think it’ll work out fine, and every month it works out fine, it’s a month we’re mitigating the cost of the overall severance package to Mr. Clifford.”

O’Halloran described the potential $300,000 payout if Clifford doesn’t find a job as “a speculative portion” of the agreement.

“I and the board are rolling the dice that he’s going to get a job,” O’Halloran said. “He’s a high level executive and he’s aggressively looking for a job, so we think in 14 months there’s a pretty good chance he’ll get a job. I think it’s a prudent business decision and it was a decision that needed to be made to move the agency forward.”

State and county officials have been sharply critical of the decision, and have publicly called for more information to be shared.

State Rep. Jack Franks (D-Marengo) and State Rep. David Harris (R-Arlington Heights) have called for public hearings on Clifford’s severance agreement, according to the Chicago Tribune.

The Regional Transportation Authority, which oversees Metra, the CTA and PACE, will be holding the first public meeting next week where O’Halloran has been asked to explain reasons behind Clifford’s settlement package, the Tribune reported.    

“The agency needs to take a deep breath,” O’Halloran said. “It needs to sit back and gain its composure. We have to take a long view and not a short term view. The criticism is short term and will be short lived.”

Clifford’s contract was set to expire February, and he could have resigned without Metra’s board having to pay him a dime, according to a July 5 article on Chicagoist.com.

The Metra Board and Clifford have been called to testify before a hearing of the Illinois House Mass Transit Committee July 11 in Chicago, according to the website, which quoted Franks as saying the settlement is "tantamount to lunacy." The board "ought to be locked up,” he added. “Keep them away from our money.’’

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