Brad Underwood: The Right Person in the Right Seat

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This story first appeared in the November-December 2009 issue of Texoma Living!

When Brad Underwood took over the stewardship of TAPS, the area’s public transit system, he knew fixing the organization was just a matter of putting the right person, in the right seat, on the right bus.

Brad UnderwoodThere is a wire-mesh business-card holder on Brad Underwood’s desk in his office at the TAPS headquarters in Sherman. The cards in the holder face Underwood’s chair. “Most of the people who come in here already know who I am,” he said. The real purpose of the holder is to support a button attached to the back, facing the visitor. It reads, “But we’ve always done it this way,” in the middle of a circle with a slash, the international shorthand for “don’t.”

If Underwood hadn’t brought that philosophy to the Texoma Area Paratransit System, the public transportation operation might not exist today, and people without alternative means of getting around in the seven North Texas counties it serves would be walking. When he joined the TAPS board in April 2007, the system was hanging on by a spark plug wire, a million dollars in debt and close to liquidation.

Other systems in the state were already eyeing TAPS’ rolling stock and deciding what parts of the carcass they wanted to salvage. Then—but wait, here comes a bus. We’ll get back to this adventure in a bit.


Adamson Bradley Underwood, to provide the extended moniker, was born and raised in Bonham.  He graduated from Bonham High School in 1996, went to Grayson County College for a year and a half, and then crossed the river to enroll at Southeastern Oklahoma State University in Durant.

While in college, Underwood applied for a job with Sears in package pickup, loading up the TVs and appliances in the customers’ cars. “I came in for the interview in a coat and tie and met with Heather Strange, the number two person in the store. After a three-hour interview, she put me in appliances, one of the choice spots in the store, one usually reserved for their top sales people.” Underwood spent five years selling appliances, very successfully selling appliances. Several years he was the top salesman in the store.

Heather Strange saw talent in the college kid who applied for a blue-collar position wearing a white collar and tie. Brad Underwood saw talent too. When he became the executive director at TAPS, one of his first hires was Strange. She now heads the TAPS accounts payable department.

After graduating from Southeastern with a degree in marketing, Underwood applied for a sales job with Grand Homes, a high-end builder in the Metroplex. “They never had hired anyone right out of college. They liked their salespeople older,” recalled he, “but I met with the sales manager, and it went well. He asked me to come back on Friday and meet with the regional president.” Figuring he had the position, Underwood went away happy, and Friday he met with interviewer number two.

“It was a strange interview. He said, ‘Tell me about yourself,’ and as soon as I started talking, he turned to his computer and started typing. Through the whole interview, he was typing, texting on the phone. He never even looked me in the eye. Eventually he stood up and said, ‘You’re not a salesperson, you’re a builder. I’ll hire you as a builder.’”

Underwood didn’t want to be a builder, so he told the vice president thanks but no thanks and left, wondering during the drive home if he had blown a good opportunity.  Apparently Grand Homes was wondering the same thing, because a few hours later the sales manager Underwood had first met called him, apologized, and asked him to come back on Monday to meet with yet another rung on the corporate ladder.

This rung was Mar’Sue Heffner, and she was not just another rung, but the number two person at Grand Homes. “We hit it off. She hired me and assigned me to work under the guy who had said I was a builder.”

No, Underwood was not a builder. Yes, he was a salesman, and how. The first year he was “rookie of the year.” The next year he was “salesperson of the year,” and then, with a little help from his wife, Mandy Ray, a Denison girl he met at GCC, he was “father of the year,” or at least he looked at it that way.

“All of a sudden the whole world changed, and my wife and I started talking about what we really wanted to do, and it wasn’t what I was doing.” Selling houses, even expensive houses, was a time-gobbling job. Underwood was often working seven days a week and coming home to his wife and son Adam at their Frisco home late in the evening. That was not the way he and Mandy thought things were supposed to be.

“I decided I would start a mortgage company,” said Underwood, and the means by which he chose to accomplish this seemed as precipitous as the decision itself. Underwood called on Casey Miller, a business acquaintance who had a mortgage business. “I told him, ‘If you’ll let me come to work for you, I’ll do it for free. I work for nothing for six months or as long as it takes.’”

Like that, Underwood was in the mortgage business—sort of. He quit his job with Grand Homes and set to learning a new trade. “My wife couldn’t quite understand what I was doing,” Underwood said, “but I convinced her it would work out.” He spent three months learning Miller’s business, and in January 2002, he started his own mortgage business.

Another part of the Underwoods’ goal was to get out of the big city and back to the small town life they had grown up with. They accomplished that in short order, moving back to Bonham in the fall of 2002 and into a house, a family home, that had been given to Brad when he graduated from high school.

“The mortgage business is a very closed business,” said Underwood. “It’s very knowledge based, and until you get the knowledge, it’s a hard thing to do. It’s sort of like being an apprentice. There are no courses on how to do it, and there are not a lot of people who want to teach you the business.”

In 2002, the blue sky wheeling and dealing in the home loan business, encouraged and subsidized by the political infrastructure in Washington, was booming, and so was Underwood’s business. He joined with a partner in Dallas and got into the highly lucrative field of mortgages written under government programs. In the frenzy to get in on the bonanza, lenders’ standards fell, prudent business practices that had held sway for decades went by the way, and people with money to lend began to peddle home loans like used cars—“No job, No credit, No problem.”

At one point, Underwood’s company had fifty employees, was doing business from coast to coast, and was closing seventy-five to one hundred mortgages a month. Then…. Well, we know what happened then.

“In April of 2008, I got a phone call from my partner in Dallas. He said there was a problem, and I needed to get over there immediately. I walked into the conference room and there sat the principal vice presidents of the biggest banks we did business with. The bottom line was that they were bust. As brokers, we had about ninety loans that had been approved and in some cases closed, and we had no money.”

Underwood and his partner found another lender, a solvent one, and took care of business, but the big boom market was dead. Underwood’s company had a good record, still had customers, but the new regulations imposed too little, too late, and with an uncommonly heavy hand by the government, made the mortgage business unpromising and unprofitable. “We couldn’t even cover the overhead,” he said, “much less make any money.”

Three Clangs of the Bell

In the salad days, when things were good, Underwood had begun to devote more of his time to community service. In 2005, he became the youngest person elected to a seat on the Bonham City Council, and by March 2007, he was the vice mayor, a position he still holds. He also served on the district oversight committee for the Bonham ISD, and he and Mandy along with Adam and daughter Taylor, born in 2006, were active in the First Baptist Church. By Underwood’s assessment, “Life was great.”

“We were at a city council meeting one night when the mayor leaned over to me and said we needed someone to serve on the TAPS board. I told him I would find someone or I’d do it myself.” At the next meeting, when the question came up again, he had to admit he had not been able to recruit anyone for the job, so Mayor Roy Floyd took Underwood up on his offer and appointed him to the post.

“The mayor said it was an easy job. They only met once a quarter, and things pretty much ran themselves.” Deed done. Case closed, and Bonham had a new representative on the TAPS board.

Imagine for a moment that it is April 14, 1912, about thirty minutes before midnight, and you are a junior officer on the White Star Lines RMS Titanic. You’ve been called to the bridge, told you’ve been promoted and will take over as Officer of the Deck when the watch changes. You have not finished with the congratulatory handshakes when the ship’s bell clangs three times and lookout Fredrick Fleet shouts down the speaking tube, “Iceberg dead ahead!” Got it? If so you now have an idea of what happened to Brad Underwood.

“In April 2007, I went to my first board meeting in Muenster. We went up to a small room and into executive session. It was given to us at that point that we were $985,000 in the red. That’s a million dollars, and we didn’t have it and didn’t know where we could come up with it. Our expenses at the time were about $350,000 a month. We had a credit line of $350,000 that was maxed out and past due. Our aged payables, ninety days or greater past due were running at $500,000. At that point, it was ‘What are we going to do? How are we going to fix it?’”

The Wheels on the Bus Go Round and Round

None of this makes much sense without an examination of what TAPS is and how it works. It is the Texoma Area Paratransit System, and no, it is not designed to ferry troopers of the 82nd Airborne Division from one place to another.

“Paratransit” is an auxiliary system to the more common forms of public transportation. It is a child of the 1970s, when think-tank urbanologists were looking for ways to supplement the public mass-transit systems then seen as a panacea for many urban and environmental ills.

In traditional systems such as bus lines and light rail, the riders came to the carriers. With Paratransit, this was reversed, and the carriers came to the riders. If this sounds familiar, it is. Think of taxi cabs. Call them, and they will come. But for many people, cabs were either too expensive or too scarce to provide the needed services.

This was particularly true for riders with special needs, the elderly and the disabled, and early on, these passengers became a big part of the paratransit ridership. This market increased with the passage of the Americans with Disabilities Act in 1990, which mandated increased access to public transportation.

TAPS began in the mid 1980s, under the auspices of the Area Agency on Aging, with the consolidation of transportation services provided by thirteen Senior Centers in Cooke, Fannin and Grayson Counties. The individual centers pooled their station wagons and vans and a transit system came into being, operating under the umbrella of the Texoma Council of Governments. TAPS became an independent, non-profit Texas corporation in 1987, although TCOG still provided oversight and served as a conduit for some of its funding.

Under Vin Hammonds, the TAPS executive director from its onset until he retired in late 2006, the system expanded beyond the original three counties to include operations in Clay, Jack, Montague, and Wise Counties as well. That year the system operated sixty-seven vehicles and logged about 400,000 individual, one-way passenger trips.

The Gas on the Bus Goes Glug, Glug, Glug

Buses don’t run on gasoline or diesel, not really. They run on money. It costs, on average, about $60 an hour to operate a TAPS bus, and the fares come nowhere close to covering those costs. “We’ll never be able to charge what it costs to provide the service,” said Underwood. “No system can. We will always have to be subsidized. Public transportation is a service like fire and police. It’s never going to support itself.” So who does support it? Why, the taxpayers of course.

“We get most of our funding from two sources, the Federal Transportation Agency and the Texas Department of Transportation,” said Underwood. “The FTA says, ‘We’ll give you 50 percent of the funds you need to operate your business. TxDOT says, ‘We’ll give you between 50 and 80 percent of your costs—we usually get about 73 percent. So the gap is what you have to come up with.” Let’s see, 50 percent from the FTA, 73 percent from TxDOT—that’s 123 percent. It’s not a bus line, it’s a gravy train—except. Except, of course, that doesn’t work that way.

“Say your budget is a million dollars,” said Underwood. “The FTA will provide $500,000 of that. You’re still half a million short. Say TxDOT covers 50 percent of that, $250,000. Now you’re a quarter of a million dollars short. The system has to make that number up from donations, fares, grants and subsidies from local governments to keep going.” Finding the money is one thing. Getting the money is something else, and therein is a problem that Underwood believes lay at the heart of TAPS’ economic woes. Here’s a bare bones explanation.

First, governments, both federal and state, work on a “you pay now, we’ll pay later” system. When the gasoline distributor fills the storage tanks at the TAPS garage on Texoma Parkway, TAPS pays him and then submits the bill to the appropriate agency for reimbursement. Rather than fund the transit operations for a year or six months at a time, the FTA and TxDOT dole out the money in dribbles and dabs, so managing operating cash flow is critical to survival.

To compound the difficulties, TAPS is actually two bus companies in one. Service in Sherman and Denison is considered part of an urban system. Everybody else rides on the dime of the rural system. The money comes from different twigs of the different branches of the different limbs of the bureaucracy. Are you still with us here?

Both TAPS urban and TAPS rural have contracts with multiple entities within the whole, dealing with federal contracts, state contracts, EED (elderly and disabled) contracts, VCR (vehicle capital replacement) contracts. And let’s not leave out Medicare and Medicaid.

All the groups are fond of paper, reports that is. “We have a full-time employee who spends forty hours a week just doing reports for Medicare, which is about 17 percent of our ridership,” said Underwood.

The Bus Stops Here

When we left Brad Underwood, it was April 2007. He was attending his first TAPS board meeting and had just been told that the public transportation system was broke. “The next board meeting was in July, in Gainesville, and I don’t think we had a quorum,” he recalled. “Then we met again in November, again in Gainesville, and had an election for a new board chairman.”

Board member and Cooke County Commissioner Gary Hollowell nominated the Bonham representative for the post. “I said I’d do it, if Sheriff Gary [Grayson County Sheriff Keith Gary] were the vice chairman. I knew he was such a strong leader in Grayson County, and we would need that to turn the organization around,” said Underwood. Gary agreed and Underwood was elected.

The board decided that solving the problems at TAPS called for outside help, and so Underwood turned to First Transit, a Cincinnati, Ohio, based company that bills itself as “a bus service solutions company.” First Transit, with fifteen thousand employees, owns buses, operates buses, runs transit systems, manages transit systems and consults transit systems.

Freddy Lessly, the longtime TAPS employee who had moved into the executive director’s position when Vin Hammonds left in 2006, retired in December, right after Underwood took over the chairmanship, and so the first order of business was to find a replacement.

“First Transit had several people in and out of TAPS, trying to get a handle on things, until February 2008, when Bill Giordango came to Sherman to become the executive director,” said Underwood, who gives most of the credit for the TAPS turnaround to the man he calls Bill G. But there is kudos aplenty to go around.

“Once the problems were identified and we started to fix things, a lot of the board members, old and new, became very actively involved. Jared Johnson from Denison was one, Stan Barker, county commissioner from Fannin County, and Gary Hollowell from Cooke County, who was fairly new to the board, and Pastor Jerry Elliot from the City of Gainesville, and that’s just from the tri-county area. We started meeting, sometimes weekly, usually in Sherman, which meant the board members from Clay and Jack and Wise Counties were on the road a lot. But there were a lot of decisions that had to be made.

The decisions made turned out to be good ones. Not necessarily easy ones, but good ones. There were staff changes. “There are two people left from when Bill G. took over as executive director,” said Underwood. And there were financial changes on both sides of the ledger sheet. “We cut expenses, and we started making better business decisions. We looked at what was profitable and what was not. We tried to do the things that made the most sense and were best for the ridership. We had to balance what we could afford with what the community wanted.”

TAPS went from asking how much do we want to spend, to asking how much do we have to spend. The budget became the budget rather than a guideline. “We renegotiated cell phones; we renegotiated service contracts. We cut out things—membership dues, chamber dues, subscriptions to things. Pennies make dollars and dollars make thousands. We made our business smaller. Basically that’s what we did. Cut a little here, cut a little there, but through all that, we always paid our staff.”
The numbers are impressive. When Underwood became chairman of the TAPS board in November 2007, the monthly expenses were running $350,000. By the time Bill Giordango came on as TAPS executive director in February 2008, that figure was down to $300,000. By the next month it was $280,000. Today, with a larger fleet of buses, TAPS has a monthly budget of $215,000.

On the debt side, the results were equally spectacular. “By December 2008, we had paid off our aged payables to the tune of $650,000. We’d paid our $350,000 credit loan down to about $100,000 and that was paid off completely by May of 2009, so we were basically debt free as an organization,” Underwood said.

Deconstructing the Fiscal Breakdown

There were hints of problems before the April 2007 meeting in Muenster. TCOG executive director Frances Pelley had urged Underwood to accept a seat on the TAPS board, and had suggested to him that there might be looming financial difficulties with the bus company, but for most of the board members, there was no warning, no three clangs of a bell.

So what had happened? How had TAPS gone from black to deepest, darkest red in about a year? A detailed examination of that question is not within the scope of this article, but Brad Underwood has a few theories. In line with his philosophy that what’s done is done, and it is more important to look to the future, he is keeping some to himself. Others, he will talk about.

“First, I don’t think there was anything illegal or improper,” he said, adding that a full forensic audit undertaken after he became the chairman showed no improprieties. “I don’t blame it on one person. I think there was just an accumulation of events that took place. The funding formula that TxDOT used to decide how much money you get every year changed. The timing of when you got your money changed too.

“Before 2006, all your grants became active on October 1. The FTA actually allocated the funds in February, but held them until TxDOT began its fiscal year. On October 1, the transit systems got their federal contract and their state contract. In 2007, the FTA decided to make the funds allocated in February available immediately. It was like Christmas in July, or rather February. The kicker was that that meant the next federal contract wouldn’t come around for twelve months.
“It was a perfect storm. You had the funding formula changing, the timing of the funding changing, and system trying to expand. Because it’s so much money, and because you’re always living behind, you can get almost immune to it. It’s a terribly difficult thing to manage unless you are closely attuned to what’s going on.”

The TAPS situation was not unlike that of a long freight train moving over a series of rolling hills. As the train starts up a hill, the slack in the couplings runs out a few inches between each car. Cumulatively, those inches become feet and yards over 120 cars, and when it runs in again as the train moves down the hill, the jolt at the rear can knock a man off his feet. It takes a skilled engineer to prevent the “crack the whip” effect.

Changing Buses

While the aforementioned drama was being played out, Brad Underwood was still running, or trying to run a mortgage business. But by the spring of 2009, a year after the big slide and a year of battling the banks and the government regulators, he and his partner decided it was time to move on.

“It’s a small business. People think it’s huge, but it’s not. It’s a small business. Two thirds of the people on my cell phone whom I used to call were out of the business. Shut their shops, over with, done. There are a few good people left—Vanya Griffith here in Sherman is one. She’s great and still loves doing it, but there are very few people still in the mortgage business. It’s such a regulated thing that it’s hard to even come back.”

So what was he to do? That was the question, and then an offer came from a wildly unexpected source—Fannie Mae. The quasi-government agency whose operations had enriched the few and impoverished the many offered Underwood a job. “They approached me to go to the other side,” he said. “You’ve sold these products, done these things, now come work for us on the regulatory side. You know the ins and outs, you know what these guys are doing; now help us go nab them.”

Underwood was more than tempted. But he was about to take a job he didn’t want, make a move he didn’t want—the Fannie Mae position required he relocate to the other side of Dallas—and give up a lot of the things he had come to believe were important to his family and his community.

“I called Bill Giordango. I had worked so closely with him for almost two years that it was like I’d been working for two companies at once. I said, ‘Bill, I’ve got something to tell you,’ and he said, ‘I’ve got something to tell you first. I’m leaving.’”

Giordango was getting close to retirement and wanted to spend his last years on the job at home in Ohio. Underwood was stunned at the news. “TAPS had been a huge part of my life. I was here once a week, often a couple of times a week for two years. It had become a day to day thing—how are we going to fix this, what are we going to do next, and when Bill said he was leaving, it really depressed me.

“We had come so far. We’d gotten the system back on its feet. We’d got life back in the system, and now, with Bill leaving, we would be in trouble. I didn’t want to see TAPS go backwards. I’d put two years of my life into it, and I am very passionate about what I do.”

Evidently, the same emotions were in the mind of Giordango. “He asked me, ‘Who do you think the board is going to want to serve in this position?’ Underwood said he didn’t know, and Giordango said, “’Would you consider being interim director until they find someone?’”
Underwood said no, and told Giordango that he was taking the job with Fannie Mae. Giordango pressed his case, insisting that Underwood was the man for the job, and the idea was fixed in the chairman’s mind.

It came down to deciding what was really important to Underwood and his family, and without too much argument, home, friends and family, Bonham and TAPS won out. At the next board meeting, Underwood informed the members of Giordango’s decision, and offered to take the job if they wanted him to. The board had a quick executive session and returned with a resounding “Yes,” and TAPS had a new executive director. Underwood turned his chairmanship duties over to a new Chairwoman, Cary Wacker of Sherman.

Back on Schedule

TAPS is back on schedule, literally it seems. Among its recent innovations is an experiment at a more traditional fixed-schedule route. The Roo Route and the Viking Route offer regular service with regular stops between Austin College, GCC and locations in Sherman and the Sherman Town Center.

There are more buses and more riders than ever. “I feel like God has placed me in the position at this particular time with this particular organization because it needed a new life. It needed a new breath put into it. I think that we’re doing that now. If you look at where we were in July, our ridership was 14,444 and that is about where it was in June, and about where it was for the last eight months to a year. Then we started implementing some new things, and in August our numbers jumped to 17,809. September was 21,125. That’s a huge change, and TAPS is beating up the board. I think TAPS needs to be at the forefront of the rural transit districts in the state of Texas, and we’re getting a lot of notice right now from TxDOT and the FTA.”

Brad Underwood is getting lot of notice too. At least one big city transit system has tried to lure him away, but for now at least, he’s not looking for a transfer ticket. At thirty-one, he has a lifetime of possibilities down the line, so there’s no real hurry to pick a stop.

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