An Detroit transit agency official has been indicted for allegedly defrauding the public of more than $300,000. Michael Norman Anderson was procurement director for the Detroit Transportation Corporation, an agency of the city of Detroit that operates the city’s People Mover.
Photo by Hikki Nagasaki.
Anderson’s job including reviewing and signing off on bills received from various contractors, one of which was called Total Care Restoration — although it wasn’t really a contractor the bills it sent were for work that Detroit Transportation hadn’t contracted for. In many cases, no work was ever done, but Anderson approved payment anyway. Total Care was owned by a man named Terrance Parker.
When the bills were paid, Total Care deposited the checks and Parker withdrew much of the funds in cash. A few days later, Anderson often made large cash deposits in his own account. In this way, at least $304,911.67 was siphoned out of Detroit Transportation into Total Care accounts, some of which allegedly made its way back to Anderson.
From an individual’s viewpoint, $304,911.67 sounds like a lot, but it’s a drop in the bucket compared to the total cost of running the People Mover. Built in 1987, the People Mover is a 2.9-mile line that runs on elevated standard-gauge railroad tracks in a one-way loop around downtown Detroit. It is really just a heavy-rail line but because it is fully automated — no drivers — the FTA classifies it as an “automated guideway” instead of heavy rail.
When planned, it was projected to carry nearly 67,700 riders each weekday. On its opening day it actually carried more than 54,000 people. But over its first year it averaged only 11,000 riders per weekday. Weekday ridership was down to 4,400 in 2019 and less than 2,500 in 2024.
Detroit Transportation spent $21.0 million operating the line in 2024 plus another $6.3 million rehabilitating worn-out infrastructure. Fare revenues of $185,688 managed to cover 69 percent of those costs. Excuse me, that’s 0.69 percent of those costs. In its best years, the line’s fares never covered more than about 15 percent of its operating costs and by 2019 it was down to around 5 percent.
Anderson and Parker probably saw all of this money going out with minimal oversight and decided to take advantage of it. The funny thing is that they probably could have earned a lot more by simply running a legal business serving the transit agency. In 2024, the People Mover put in only about half as many vehicle-miles as it had before the pandemic, yet the city was spending a more on it. After adjusting for inflation, the city spent about $40 a vehicle-mile operating the People Mover in the 2021s but nearly $80 per mile in 2024.
Unlike other transit agencies, this increase wasn’t mainly a result of bureaucratic bloat. That’s because the agency was already bloated before the pandemic. Where the average transit agency spent less than 20 percent of its operating costs on general administration in 2019, Detroit spent well over 30 percent. This declined to 29 percent by 2024. Instead, the main increase in costs between 2019 and 2024 was in infrastructure maintenance.
According to the FTA, “maintenance” includes costs that recur annually, while expenses that must be paid only every few years, such as replacement of track or signaling systems, are “rehabilitation” (the FTA calls them “capital costs – existing” meaning existing infrastructure). Yet Detroit’s non-vehicle maintenance costs fluctuate almost as much as rehabilitation, going from $920,000 in 2019 to $4.2 million in 2024. When rehab costs are included, the costs of running the People Mover went from $41 per vehicle-mile in 2019 to $101 in 2024.
To me, the People Mover is simply a slightly more extreme example of everything that is wrong with urban transit today. It costs a huge amount of money, moves hardly any people, and no one pays any attention when costs rise and revenues fall. Detroit should use this fraud scandal as an opportunity to question whether it needs to keep throwing money at the People Mover at all, but it probably won’t.
If it wasn’t for the above corruption, I’d say that Jacksonville’s people mover – The Skyway – is even worse than Detroit.
Antiplanner, you’ll have fun putting together a piece on the state of Jacksonville’s peoplemover. No one rides it. It’s equipment is running past it’s end date. And the JTA recently admitted that they can’t do their Ultimate Urban Circulator ( U2C ).
JTA has spent $50 million, maybe 65 million, on the first step of the U2C. Basically they went around and installed fare boxes for an automated roboshort bus. Because their grant was about to expire, they paniced and retrofitted some Ford van’s with some after market automated driving equipment.
No one rides is useless loop up and down Bay Street between downtown and the Jags Stadium. They built an “innovatoin center” on prime downtown property to, get this, charge the short buses. They could’ve driven another mile down the road to their intermodal or a smidge past that their big facility for buses to charge them but nope, they had taxpayer money to spend so they had a build an “innovation center” to charge the buses no one uses.
Makes one wonder how Minnesota shut down Northstar without paying back their federal grants. Maybe they punted that since it’s not required for a year or two? If not I wouldn’t be surprised to see Jacksonville employ whatever they did to shut down the $20 million a year mobile homeless cooling system called The Skyway.