Syracuse, N.Y. – Centro’s board members have moved its most recent chairman into the six-figure, top job at the bus authority in Central New York without any external search or formal interview process.
At the same time, the board is letting Brian Schultz continue to run his private, financial advising business while he oversees a multimillion-dollar state authority that provides about 10 million bus trips to riders in four counties each year.
Schultz went within 24 hours from heading a volunteer board that oversees policy and spending for Centro to a paid, full-time executive position. He would soon run the day-to-day operations for Centro and report to the same volunteer board he had led for eight years. His former board colleagues appointed him to the executive position.
The hiring process was expedited because the need to fill Centro’s top job arose earlier this year, just as the coronavirus was beginning to spread across New York, Centro officials said in recent interviews with syracuse.com | The Post-Standard.
A national search for an external candidate, they said, could take a year. Instead, they wanted someone they felt knew the job, and who could start quickly, as the bus system faced the public health and financial uncertainties created by Covid-19.
Ultimately the board decided within a two-month span to hire one of its own. That meant Schultz, as the board chairman, went from initially heading the replacement effort to quickly stepping aside after he became the only candidate.
Schultz also got approval from the state’s ethics commission to keep his job as president of Choice Point Advisors LLC in DeWitt – and to keep his income from that job private.
Schultz officially took over as Centro’s CEO on Aug. 1. His salary is $172,000.
The board never formally interviewed Schultz for the job, nor reviewed a resume or asked for recommendations, Centro Chairman Nicholas Laino said. The board also didn’t consider hiring an interim, according to Laino.
Rather, Laino said, the members of the board relied on their years of experience working with Schultz, who joined the board in 2004 and became chairman eight years ago.
“We felt that Brian would be a natural fit,” Laino said of the decision made in March. “It was important to maintain the continuity in the organization.”
Centro’s decisions don’t violate state law.
But the actions do raise questions about the independence of the board and whether the authority went against the spirit of state legislation meant to draw a clear line between the governing board and the CEO.
On March 27, Centro’s board approved a three-year employment agreement with Schultz that would put him on the payroll.
On March 31, Schultz resigned as board chair.
The next day, April 1, he began working as Centro’s executive vice president. That was an interim position created to allow him to work side-by-side with the outgoing CEO.
In August, Schultz stepped into the top position at Centro.
When asked if the hiring decisions sidestepped a law meant to keep the board and executive separate, Schultz rejected the idea.
“Absolutely not,” Schultz said in an interview with Syracuse.com | The Post-Standard.
“It was just to get me in and get a transition period,” he said. “I didn’t want to start July 31 and have the existing CEO walk out the door. I needed some time to work with him.”
Rick Lee, the outgoing CEO, agreed. “He really wasn’t in a dual role at any time,” Lee said.
Schultz, 51, of DeWitt, has worked for more than two decades as a financial planner and adviser. In late 2012, Schultz founded Choice Point Advisors, where he continues to serve as president. He’s also been a DeWitt town board member and is a DeWitt fire commissioner.
In addition to his time at Centro, Schultz serves as treasurer for the New York Public Transit Association and chairman of the policy committee of the Syracuse Metropolitan Transportation Council Policy Committee.
He said at one point in his career, he managed a staff of 50 to 60 people.
Now he’s the fifth director of Centro, managing a state authority with a $78 million budget with more than 600 workers. Centro provides bus service in Onondaga, Oneida, Cayuga and Oswego counties. The authority also gets Syracuse high school students and Syracuse University students to classes.
Schultz said he’s excited about leading Centro. He described himself as a hands-on board chairman, who worked closely with Lee, an assessment both Lee and Laino agree with.
Lee headed Centro for nearly five years. He retired, he said, to spend more time with his grandchildren. While heading Centro, Lee said, he spoke with Schultz multiple times a week, on issues ranging from government relations to maintenance to operations.
“I talked with Brian four days out of seven days out of the week,” Lee said. “He’s been very involved in helping me manage the organization.”
Schultz also brings new ideas to the bus authority. He wants to create a bus loop around downtown Syracuse, to help those who live, work and spend money downtown to move easily around the city. He wants to implement a smartphone payment plan, too.
“We’ll never be cashless,” he said. But he wants to implement mobile ticketing for those who want it.
At the same time, he’s continuing to serve as president of his financial investment business.
Laino said the board never asked Schultz to give up the outside work, nor did Schultz say keeping the outside work was a deal breaker.
Rather, Schultz agreed to make Centro his priority, Laino said.
In an interview with syracuse.com, Schultz said he’s working at Centro more than 40 hours a week. He says he’s hired more staff at his financial firm. They can deal with clients, and buy and sell assets on their own, he said.
Schultz said he would not take phone calls, check email or make financial trades related to his business while at work at Centro. “I have a staff that’s empowered to do all that,” he said.
In its ruling, the state ethics commission noted that Schultz pledged to work 30 to 35 hours a week at Centro, and another 15 to 20 at his private business. Schultz also must recuse himself if any Centro business appears to or actually does conflict with his private work.
It’s unclear how much money Schultz makes at his business. Centro provided syracuse.com | The Post-Standard a copy of Schultz’s latest financial disclosure form, a state requirement for policy makers. With the state ethics commission’s approval, Centro redacted the salary range information associated with Schultz’s business.
That information should be public, in part because the size of the private-sector salary could show how focused Schultz is on each job, said Blair Horner. He’s the executive director of the New York Public Interest Research Group, a government watchdog group.
“If he’s going to be allowed to moonlight, the public should have all access to that,” Horner said.
There’s nothing inherently wrong with allowing a state employee to earn outside money, Horner added. After all, Gov. Andrew Cuomo sold a book while in office, which the governor disclosed.
“That area should be as transparent possible,” Horner said of making money on the side.
The board has the authority to hire a CEO without going through a specific hiring process, according to Jeffrey Pearlman, the director of the Authorities Budget Office, who did a cursory review of Centro’s governing law at syracuse.com’s request.
Yet the law does speak to hiring. It prohibits the manager, or head, of Centro from also being a member of its board.
That law was written, Schultz said, in response to Centro’s structure under its first chairman, Warren Frank. Decades ago, Frank served as top executive and on Centro’s board at the same time.
That’s not what happened with Schulz. Yet it was an internal move.
“Generally speaking, a broad search is a better search,” Horner said. “Outsiders can bring new perspectives to an organization and can offer skill sets that can be beyond that of internal candidates.”
Schultz said he learned in January that Lee planned to retire at the end of July. That set Schultz, as board chairman, into the role of finding a replacement.
Schultz said the board in February considered various options. Launch a national search. Hire from within the existing executive staff. Or turn to Schultz, who’s been on Centro’s board since 2004 and chairman for the past eight years.
It was Lee who suggested hiring Schultz.
The board then discussed the replacement during two executive sessions at regular board meetings in February and March, Schultz said.
Schultz said he recused himself from those discussions, meaning he left the room and never participated in any vote that put him in the CEO seat.
In the end, the board hired him with a unanimous vote.
Schultz says he is not a bus rider. Since being hired, he’s been riding various bus routes, seeing how riders use and experience the system.
He wants to make it easier for residents like him, who live in the suburbs, to use Centro. To commute to work, he said, he’d have to walk a half mile to a bus stop, ride to the downtown hub, then transfer to a bus to get a ride to Centro’s offices, just a few blocks away.
“That’s one of the things I want to change about our service,” he said. “It’s very difficult and time consuming, right now, to be in a suburb and get to work.”