Lhota’s Last Ride

Bill Lhota intended to be a short-timer at COTA. Seven years later, he’s finished his tune-up and handed over the keys.

By
From the March 2012 issue of Columbus CEO
  • Todd Yarrington
  • Todd Yarrington
  • Todd Yarrington
  • Todd Yarrington

It’s a winter afternoon and Curtis Stitt is dashing down High Street, his executive-appropriate slacks and footwear barely hindering him as he maneuvers his way to the bus stop. He makes it on the bus—the No. 2—before it pulls away from the curb, as does Marty Stutz.

COTA President and CEO Bill Lhota, distracted by a cellphone call, does not.

Just as Stitt, then senior vice president and chief operating officer of COTA, and Stutz, vice president of communications, marketing and customer service, realize they’ve left their boss behind, the bus pulls away. COTA drivers make special exceptions for no one, top brass included.

Lhota, who’s retiring from COTA as of Feb. 29, wouldn’t have it any other way. Later, he says all employees are expected to follow the rules, which allow passenger pickups only in bus stop zones.

It’s that buttoned-down, fair-is-fair approach that made Lhota the right man for the top job at the Central Ohio Transit Authority, say those who know him. He was brought into COTA at a tough time. The budget was bloated. Routes were being cut. Between 1998 and 2003, COTA’s operating expenses had grown by 36 percent even as the miles traveled shrank by 19 percent, The Columbus Dispatch reported. Its per-passenger cost had grown by 59 percent in five years.

It was among concerns about management shortcomings and the agency’s worsening finances that the other shoe dropped: President and CEO Ronald Barnes had hired a recently resigned board member to a part-time consulting gig, a move the Ohio Ethics Commission ruled violated ethics laws. Barnes resigned in August 2004.

In a month’s time, COTA found a replacement: Lhota, a retired 37-year veteran of American Electric Power, most recently its president of energy delivery and executive vice president of subsidiary AEP Service Corp.

Despite his executive experience, Lhota, an engineer by training, was not an obvious choice. Although he’d co-chaired a COTA sales tax levy renewal campaign in 1989 and served on a committee studying a monorail for the city, he could count only one time when he’d had occasion to ride the bus. “The last time I took a COTA bus was when my brother and I were in college and his car got towed. We had to ride the bus downtown to extract his car out of the impound lot,” Lhota recalls.

The transit authority’s board was looking for “someone with demonstrated leadership and executive management experience; someone we thought could be nimble. We were looking for somebody who was well-respected in the community and had performed public service. We were looking for someone who demonstrated the highest levels of integrity, and lastly—and most importantly to me—we were looking for someone whose last named rhymed with COTA,” says former board chairman Bill Porter, an attorney with Vorys, Sater, Seymour and Pease, who approached Lhota about the job.

Mike Curtin, who recently retired as associate publisher emeritus of the Dispatch to run for statewide political office, has known Lhota since his AEP days. “Sometimes it takes an outside expert without preconceived, preordained biases to come in and bring a very fresh perspective and a very fresh outlook on an operating model. Bill is not only one of the smartest guys in the room, he has almost unlimited empathy for the common guy,” Curtin says.

Lhota’s wife, Susan, a former COTA trustee, convinced him to take the job. “She said, ‘Bill, I’ve listened to you for 37 years tell people at AEP that when the community asks them to do something, they need to step up and do it, and now you’re saying you don’t want to do it.’ I knew it was all over then,” he recalls.

Lhota knew what he was getting into, likening the task before him to an even more logistically challenging mode of transportation. “We’re trying to replace a jet engine with the plane still in the air,” he told Columbus C.E.O. (“Can Lhota Save COTA?” December 2004)

In his tenure at the transit authority, Lhota helped steer it back on course. To be sure, COTA still has critics. But the authority increased service, added bus lines, updated its fleet, renovated facilities, and, in the process, helped bolster its battered public image. A 2004 Dispatch analysis found that of nine peer authorities, COTA had the second-highest operating costs per hour of service. COTA documents show that figure as a little more than $100 per revenue hour, 32 percent higher than its peers. By 2010, COTA had closed the gap to 8 percent over peers’ expense, or slightly less than $110 per revenue hour. Says Curtin, “Bill went in there in his very engineer-like, very methodical way to examine every nut and bolt in the operation. … He went in to challenge the workforce to work with the management to build a sustainable operation, one the public could have confidence in.”

Turning the Corner

When Lhota came to work, he ditched the company car and executive perks such as priority parking in COTA lots. He became a regular presence on the buses, making hundreds of trips around town, asking riders, “Tell me everything you don’t like about us.”

Lhota “learned in a first-person way what our customers needed and wanted, and he wrote it all down on that yellow pad he carries around, he brought it back to the staff and changes happened,” says Linda Mauger, chairwoman of COTA’s board of trustees.

Lhota also created and launched the Leaders of the Future Program in partnership with Franklin University. Recently renamed the William J. Lhota Leaders of the Future Program, it identifies potential COTA leaders and provides training and development opportunities. “I recognized that we needed to build the bench strength at COTA and we needed a program to do it,” says Lhota. COTA pays the $600 fee for each of its participants. This year, five employees are enrolled.

Under Barnes, COTA had pushed to expand its offerings, in part through two 1999 ballot issues. Voters agreed to make COTA’s 0.25 percent sales tax permanent, but rejected a proposal to boost bus service and fund the first phase of a light rail system through a separate 0.25 percent sales tax. Still, Barnes pushed on, looking at rights-of-way and environmental studies and securing as much as half of the light rail project’s $500 million cost through federal mass transit grants.

Lhota tapped the brakes. “Back in 2004 I believed—and still strongly believe—that until COTA can demonstrate it can run a world-class bus company, it has no business moving into other forms of transportation,” he says.

Fortifying Finances

In 2004, COTA posted a $1.8 million deficit, its third in four years, on a budget of $71.4 million. Lhota calls that time COTA’s “darkest hours.” It was time to make changes. “We laid people off, we cut services,” he says. COTA raised fares and closed facilities, too. When a three-year contract with drivers, members of the Transport Workers Union Local 208, expired, Lhota brokered an agreement for a two-year pay freeze and moderate increases afterward.

Lhota wanted more tax revenue, but acknowledged the need to do some housecleaning first. “We said we can’t go [on the ballot] in 2005, because we haven’t restored our reputation, we don’t have a plan and we don’t have a balanced budget. … By 2006, we had all three,” he says. First, Lhota reached out to the business community, asking Columbus Chamber members to help identify areas in need of improvement.

That outreach helped COTA eek out a win in November 2006 for a 10-year, 0.25 percent sales tax levy to fund its long-range transit plan. Ty Marsh, then president and CEO of the Columbus Chamber, says Lhota “could articulate the issues and points in terms a businessperson could readily grasp and understand. … When the levy proposal came along, there were a lot of questions and concerns and everything else, but I think it was very fortunate that Bill was the one answering them, because from a business community standpoint, they respected Bill and had confidence.”

The ballot initiative enabled the authority to expand service after years of reductions—running buses more often and later, adding new routes and restoring some that had been cut. COTA logged about 625,000 fixed-route service hours in 2006; almost 837,000 were driven in 2011.

COTA now carries about the same number of passengers as it did at its 2001 peak, “but we’re doing it with 30 less buses and 25 less operators,” Lhota says. In 2011, ridership was 18.5 million passengers; of roughly 800 employees, about 495 operators drive the 302-bus fleet.

The transit authority ended 2011 with a $28 million surplus on a $93 million budget. Still, trustees voted in November to raise the cost of fares and passes by 9 percent to 25 percent, depending on the service. Local fares now cost $2 instead of $1.75; a 31-day local route pass went up $7 to $62.

Lhota says the increase reflects COTA’s belief that customers should foot about 20 percent of the cost of transportation. Stutz says fares now account for 17 percent to 19 percent of revenue; sales tax revenues make up most of the remainder. COTA’s 2012 budget is $98.9 million. CFO Marion White told the board that the fare hikes would bring in an additional $3 million, despite a slight—and short-term—dip in ridership that typically accompanies such moves.

Other changes are on tap for 2012. COTA plans to add 40,000 service hours to make more frequent runs on existing routes. While contract negotiations are still under way with unionized staff, nonunion workers will see a 1 percent pay raise.

In recent years, COTA has also changed its feast-or-famine approach to fleet management. “When you have an older fleet and you haven’t been replacing your buses on a regular basis, then they cost you more to run,” says Mauger. Instead of waiting for a windfall of grant money to replace many buses at once, COTA now replaces one-twelfth of the coaches annually. The average bus is around five years old, though some are up to 11 years old. Last year, COTA purchased 40 buses; in 2012, it plans to buy 23 at $350,000 to $370,000 each, says Stutz.

Better Buildings

The fleet wasn’t the only area in need of spiffing up. “One of the things that was done for many years was all of COTA’s facilities were let deteriorate; there was no maintenance put in,” says Lhota, who led the relocation of COTA’s administrative and sales offices from its remote operations center at McKinley Avenue to 33 N. High St. The authority paid $4.6 million for the building and $9 million for updates. There’s no employee parking, encouraging employees, who can ride COTA for free, to do so.

COTA also constructed a Mobility Services Facility on Fields Avenue. The 104,000-square-foot building, completed in January 2011, can house up to 104 paratransit vehicles and administrative offices. The transit authority is seeking LEED Silver certification from the U.S. Green Building Council for the $21.7 million facility. COTA funded $18.3 million of that from federal grants, including $4.2 million from the American Reinvestment and Recovery Act (ARRA).

In the facility is an eligibility assessment center, which uses a simulated bus ride—including stairs, ramps, sidewalks, uneven terrain and even a mock crosswalk—to determine if a rider can navigate COTA’s fixed-route system. COTA previously used a paper application and interview. “It’s nice that they have a more realistic center to be able to evaluate people’s abilities,” says Jenine Stanley, a vision-impaired COTA customer and advocate for people with disabilities.

Also along Fields Avenue is COTA’s Fixed-Route Bus Facility. The building, constructed in 1984 to store and maintain some 180 coaches, got a $20 million renovation ($5 million from ARRA) to improve its storage and maintenance garage; renovate administrative, dispatch and operator break areas; and add an employee fitness center. The building reopened in 2009.

A $60 million fix to the McKinley Avenue building, which primarily houses a call center and maintenance operations, is in the works, too. That project will include the addition of a compressed natural gas fueling facility and renovations to the garage, maintenance shop and administrative area.

Stitt Steps Up

The relationship between Lhota and COTA was expected to last only 18 months or so, but it turned out to be no mere fling. “He fell absolutely so in love with public transit, and we fell in love with his leadership,” Mauger says. In late 2010, Lhota requested his last contract extension, to mid-2012, to help potential in-house candidates transition to the top job. Trustees created the post of senior vice president/chief operating officer to serve as a stepping stone.

Stitt distinguished himself from a field of internal and external candidates. Since 1999, he had worked his way up the ranks, serving as legislative and government affairs counsel and then vice president of legal and government affairs/general counsel. An advisory board member of Capital University’s Council for Ethical Leadership, Stitt served on the Franklinton Board of Trade and is past president of the Columbus Chapter of the National Council of Black Lawyers. In April 2011, trustees named Stitt SVP/COO.

“I’ve been in the business all of my adult life and these are two incredibly wonderful people,” Mark Donaghy, executive director of the Greater Dayton Regional Transit Authority and president of the Ohio Public Transit Association, says of Lhota and Stitt. Both Donaghy and Rick Ayish, government affairs counsel for the Ohio Public Transit Association, wrote letters to COTA trustees supporting Stitt’s promotion.

Lhota, 72, says he’s confident Stitt, 58, is the right person for the job. The organization, he says, “is on an upward move. I’m confident it’s going to be taken to the next level under the leadership here.”

“COTA is a very well-run transit company, and we don’t think anything needs to be fixed. Bill kind of fixed it,” says trustee Jim Kunk, president of Huntington National Bank’s Central Ohio region and leader of COTA’s succession committee. “We wanted somebody who could take what Bill has implemented and run with it.”

Trustees named Stitt president and CEO on Jan. 25. Before the vote, Mauger said Stitt demonstrated a “consistent and thoughtful management style in a variety of situations” and has been an “ethical and dedicated public leader.”

“Curtis possesses the business and management skills, experience and strategic vision to take COTA to the next level,” Lhota wrote in a note to employees.

Stitt, whose promotion took effect Feb. 1, will earn $155,000. (Lhota’s final salary: $140,689) Stitt says he’s “humbled” to follow Lhota: “He’s done a lot to move the sense of engagement and the culture of the organization forward.”

Lhota, meanwhile, plans to split his time between Worthington and Florida, and will remain involved in the Central Ohio business scene as a consultant and lecturer on arbitration, mediation and ethics.

Looking to the Future

Stitt doesn’t plan to rest on his predecessor’s laurels. “There will be no cruise control,” he says. “There’s still a lot of hard work to do.” The organization must continue to align expenses with its peers. Also, “We’ve got to continue to grow the service in terms of the amount of service on the street and the quality of it.”

That includes the Northeast Corridor Alternatives Analysis (NECAA), a $400,000 study intended to address growing demand for transit service in the Cleveland Avenue area. COTA received $300,000 in federal grants for the analysis.

Of the options being explored, Bus Rapid Transit (BRT) has become the frontrunner. Buses would have a dedicated lane, traffic signal priority, a reduced number of stops compared to local routes, real-time passenger information and improved pedestrian amenities. The Cleveland Avenue BRT could be up and running by 2016. No price tag has been attached to the improvements. Stitt calls the NECCA planning “a next great step for us for service that’s going to meet our need to grow with the Central Ohio population.”

MORPC projects the region will grow 20 percent by 2050. “If we have that kind of growth in Central Ohio, we can’t solve it with just buses,” Stitt says. “The entire community has to recognize that we have to build a comprehensive transit system that’s fully integrated with all of the modes.”

The year 2050 seems far off, but Stitt says COTA must anticipate what tomorrow’s customers will need even as it serves those of today. “Our job is to lay the foundation,” Stitt says. He’s making plans, too, for 2016, when COTA’s 10-year levy expires. “It took a great deal of work to get that extra 0.25 percent in 2006, and I think it will take an equal amount of work to get it moving in 2016.”

As Stitt reports to work every day in the newly renamed William J. Lhota Building, he says, “It’s going to remind me every day of the standard I have to live up to.”

Jennifer Wray is a staff writer for Columbus C.E.O.

Reprinted from the March 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.