Ann Arbor Transportation Authority Chief Executive Officer Michael Ford and the AATA have agreed to a new contract.

The AATA board approved paying Ford $160,000 for one year starting on October 1, 2010, the first day of this fiscal year. That does not include a one-time bonus of $7,754, an automobile allowance of $10,010 before taxes and other benefits.

Ford, who was hired by the AATA in July 2009, will not receive a base salary increase this year, and the contract is set up to continue as is unless either party ends it. Each October, the board will send Ford a compensation letter instead of voting on a whole new contract.

The new contract clearly spells out that the evaluation of Ford will coincide with the budget process each year. This year, the evaluation process must begin before Sept. 1 and end no later than Nov. 30.

The annual review includes evaluation of achievement of goals, feedback from the board on performance of key responsibilities and evaluation of financial and operating outcomes for the preceding fiscal year.

Pay will be determined by examining compensation for CEOs of similar size transit authorities. The board will also look at changes in compensation for executives of governmental organizations in the region that are of similar size and revenue.

AATA board Chairman Jesse Bernstein said the review process was done “idiosyncratically” in the past and the board aimed to create a clear, set process.

“It definitively states that the board has a responsibility to evaluate the CEO, which is good for the CEO and for the board," he said. "We will give feedback on performance and it will force us all to have the discussion about the CEO, how well they’re doing and what they’re doing. It's best to put that in contractual language, so if the board doesn’t follow through, the CEO can say ‘This is part of my contract.’”

He said Ford’s salary is comparable to the higher end of those at transit authorities of similar size, which is one reason a raise wasn’t built into the new contract. Bernstein also said very few people at the executive level in any governmental organizational received a salary increase in southeast Michigan this year.

The one-time, 4-percent bonus, however, was a way “to say thank you” for a strong performance, Bernstein said.

“Given the environment we're in, we can’t say, ‘Michael has done an incredible job and we should give him an incredible amount of money,’” he said. “You can’t do that in the public sector right now.”

All the board members praised Ford’s service and several said they were pleased to see a clear evaluation process tied to the budget. Board member David Nacht commended Bernstein and board member Sue McCormick for negotiating the contract presented.

“It’s difficult during distressful economic times to negotiate a contract with a serious professional who needs to be paid at competitive rates, and you did so keeping a real sensitivity to the community’s needs, watching every nickel spent, and, at the same time, respecting the fantastic level of performance we’re getting,” he said.