Why SEPTA has to pay $450,000 in salary to an executive it terminated in 2021

By Ryan W. Briggs and Juliana Feliciano Reyes, Philadelphia Inquirer

PHILADELPHIA — Turns out leaving a SEPTA job can be just as lucrative as working there — at least when you're at the top.

The agency effectively paid an executive to leave and has been responsible for his six-figure salary — plus severance costs — ever since he departed the agency, way back in December 2021.

Former SEPTA deputy general manager Robert L. Lund, Jr. remained the agency's third-highest paid employee last year, collecting a $297,076 annual salary despite formally exiting the organization well over a year ago, according to an Inquirer review of the transit agency's payroll records.

SEPTA spokesperson Andrew Busch confirmed that Lund, who has moved to the Pacific Northwest, will continue being paid until June 30, after which he will become eligible for pension benefits. By then he will have collected a total of nearly $450,000 in salary and severance payments since SEPTA terminated his employment.

Busch explained that SEPTA eliminated Lund's position in a COVID-era reorganization about a year into a three-year employment contract he and the agency signed in January 2020. While the spokesperson called his departure "a mutual parting of the ways," under the contract's terms SEPTA must continue paying him through the end of the contract and provide six months of severance as a penalty for termination.

Lund won a raise that increased his final salary by $32,000, or 12%, before SEPTA opted to terminate his contract.

Reached by text message, Lund declined to comment.

Oregon property records show he and his wife, longtime Berwyn, Pa., residents, purchased a half million dollar home outside of Tumelo, Ore., in August 2017. According to his LinkedIn, Lund has worked since May 2022 as a program manager for the Seattle-based engineering firm Gannett Fleming.

SEPTA has meanwhile grappled with critical ridership declines and grim finances since the dawn of the COVID-19 pandemic. SEPTA expects its $423 million in federal COVID aid to dry up next year and plans to dip into its $300 million rainy day fund to make up the difference.

Even so, Brian Pollitt, president of the Transit Workers Union Local 234, which represents about 5,000 SEPTA employees, said he wasn't surprised by Lund's deal.

"This is just another example of SEPTA having tons of money for managerial personnel and no money for the frontline workers," he said.

Thomas J. Ellis, a SEPTA board member, said employment contracts like Lund's are necessary to ensure executives remain independent and are able to speak out against the general manager — "rather than be wary as an at-will employee." He noted that the board does not approve these contracts.

Asked if it was a problem to continue paying employees who no longer work at the agency, Ellis said "buying out" execs was a common business practice.

"If that helps the agency, then I don't have a problem with it," he said, adding that "we're an agency that spends a lot of money, so something may look large when it really isn't, or could actually be saving us money."

Terminating Lund's contract a year early triggered a severance provision requiring SEPTA to pay him another $148,000 — or six months of pay.

Lund, a 20-year veteran of the agency, oversaw the agency's construction and maintenance division prior to his promotion to deputy general manager in 2020. The division included a team that was investigated by the FBI for the misuse of company credit cards. A string of those employees pleaded guilty to bilking SEPTA out of nearly a million dollars.

Lund was not charged by the FBI. Pollitt referenced the FBI investigation when speaking about Lund's deal, saying SEPTA "rewards bad behavior" of its managers.

SEPTA has a record of enticing other top officials to leave.

In 2019, it agreed to pay its then-assistant general manager of operations Ron Hopkins 13 months of his $201,011 salary after he departed. The deal, according to Hopkin's agreement, "intended to provide him the opportunity to ... retire from the Authority's service with an unreduced pension and certain retiree benefits."

SEPTA gave similar deals to at least six other officials over the last decade — including special counsel Robin Lewis, who received six months of pay to leave in 2020. SEPTA sued The Inquirer last year to keep the agreements private. Lewis declined to comment last week.

The elimination of Lund's position came about a year after General Manager Leslie S. Richards took over at the agency, and reshuffled a number of top leadership roles.

It also came a few months after Lund's name surfaced in connection with an ethics scandal.

The agency has long engaged in a practice of rehiring recently retired staffers to so-called "part-time" jobs that sometimes paid annual salaries higher than $200,000, while those staffers also had begun collecting their pensions.

In late 2019, Lund oversaw one such subordinate who retired and was hired back for a position earning $129,000 annually. A few months later, the same employee quit this part-time role to take a job with a private engineering firm — only to be contracted as a $60-an-hour consultant reporting to Lund. A SEPTA lawyer had signed off on the arrangement, records show, but he later said he did so mistakenly.

In October 2021, about two months before Lund's departure, the Pennsylvania State Ethics Commission found the arrangement violated both state ethics guidelines and SEPTA's own contracting rules.

Staff writer Thomas Fitzgerald contributed to this article.

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