| Debt-Ridden NTTA Gives Huge Paychecks to Consultants |
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| by Tom McGregor | Mon, Nov 9, 2009, 10:11 AM |
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The Houston Chronicle reports that the "NTTA has long relied on five top-priced consultants who routinely charge the agency three to four times what a staff member might earn to perform various tasks such as to design, build and repair its roads and to address legal problems."
NTTA's executive director, Allen Clemson, estimates much of the work NTTA pays to have been performed by someone else costs approximately three times more than if the agency did it. Clemson, who took control of the agency five months ago, claimed he's reviewing how it spends cash. The debt of NTTA has come to about $7 billion while it expanded its network of toll roads in the past few years. According to the Chronicle, "hundreds of firms are paid to work for NTTA each year, including some small outfits and some that are national engineering powerhouses. Five top-dollar firms have held key roles for NTTA since long before it was created in 1997 out of the old Texas Turnpike Authority." The NTTA pays hefty legal consultant fees to Locke Bissel & Liddell, one of the most prestigious and most expensive law firms in Texas. The law firm, in 2008, billed nearly $7.7 million in legal fees to the NTTA, which was three times more than it billed in 2006. Approximately $3 million paid for NTTA's aggressive push for right of way, a program which has been seeking 200 parcels of property for planned expansions. Just as NTTA's borrowing has soared, payments made to McCall Parkhurst, its bond counsel sine 1955, surged to $3.4 million, up from $233,148 two years earlier. The NTTA also paid millions for other legal tasks, many of which could have been accomplished at a cheaper rate by smaller firms or by an attorney on the NTTA payroll. Until last month, NTTA had no lawyer on staff, but it just hired one at a salary of $215,000. As reported by the Chronicle, "on the engineering side, NTTA, has contracted with HNTB, a national toll giant, for nearly 60 years. HNTB recently paid two of its staffers $273 to assemble routine packets for NTTA board members but billed it at $757." To read the entire article from the Houston Chronicle, link here: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it 
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Comments (2)
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written by John Weekley , November 09, 2009 There is often a thin line of actual "cost" between consultants and doing the same work internally. But, priced competitively, consultants are often less expensive than employees, because of the hidden long-term costs of employees. o There is less accounting for consultants o There is less management involved with consultants o A company can often contract with a number of experts with a consulting firm for less than what one employee would cost o Cash flow is usually better with consultants o There is a better frame of legal recourse with consultants than employees o It is easier to terminate a consultant than an employee o Studies show there is far less lost work with consultants than with employees o Consultants need a much shorter Learning Curve to become competent to do a job than most employees o There are no long-range problems or costs associated with consultants normally associated with employees And, of course, the ever-popular: o It's easier to blame mistakes on consultants than on your employees to customers or the boss That said, this story sounds like Allen Clemson hasn't yet used the sharp budget knife for which he was famous at Dallas County. If NTTA is paying over $750 to have board packets assembled, then it sounds like Allen could use a Chief Of Staff or a senior staffer to reduce those costs. Board packets are generally administrative tasks; not legal work. If the E.D. of NTTA was anyone but Allen Clemson, I'd be more suspicious of wasteful spending. But, unless he's had a frontal lobotomy or gone over to the dark side of budgeting, his reputation for watching money as though it were his own and he was earning interest on it precedes him. The transition from an executive staff role to an executive management role can be a difficult one. But, there are excellent consultants available who can smooth out the rough spots. Fascinating article, and very timely given the state of the economy and the ways organizations are adapting.
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written by furrpiece , November 10, 2009 There is another side to this that is reasonable to present. An organization deeply in debt should NOT be hiring consultants at top dollar, especially because many of them are hungry for business and facing shortfalls in this horrible economy, and would work for less. It's a market-driven economy. Allen Clemson has, for the most part, been a bureaucratic gate guard; not a manager. He has closely guarded the county's money, which all of us appreciate. But, he has not been a proponent for efficiencies and technologies in a timely manners, and has not been either an executive or a manager in the true meaning of those terms. In a political organization such as Dallas County, politicians don't want to attract voter anger by expanding the size of government with new employees and departments. So, the marching orders to Clemson are reflective of that condition, and he is told to hire more consultants - or authorizes the hiring of more consultants instead of employees. This isn't to suggest Mr. Clemson is incapable of managing a private business. But, it does take into consideration a very different mentality in county government that one finds in most operations like the NTTA. Schools such as SMU, U of D, NTSU, and others have plenty of business professors willing to act as consultants to help develop business plans and structural/organizational changes aimed at better balancing the needs of the organization with the financial realities of its crushing debt,tight credit, and the economic realities of continued consumer and business cutbacks. In times of financial difficulties, it seems like many operational consultants are right behind PR consultants in the cost cutting line. I also understand there is no shortage of hungry accountants and business planners. Write comment
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The debt-ridden North Texas Tollway Authority (NTTA) pays hundreds of millions of dollars annually to contractors for work, much of which admitted by top officials costs three times more than if the entity did it, itself.
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