MTC, not AC Transit, is responsible if BRT is canceled.

Friday night’s AC Transit Special Board meeting depressed the hell out of me. I expected it to be depressing going in. After all, the Board was being asked to choose between cutting lifeline service and, for all practical purposes, cancelling BRT (PDF). But then it was even worse than I expected.

So, as you may remember from last Thursday’s blog, AC Transit staff has come up with an idea that could help them avoid about half of their proposed service cuts. They would take about $80 million in funds earmarked for BRT from two different pots – CMAQ and RM2, and transfer the money to their operating budget. Both funding shifts involve approval from other agencies (in the case of CMAQ, the FTA and the MTC, and in the case of RM2, just the MTC). You can get a little more background on all this from yesterday’s post on Transbay blog.

Technically, if AC Transit does go ahead with this funding shift, BRT will still continue in planning. Except, of course, there won’t be any money left to build it. And no manner what anyone says otherwise, giving up this cash essentially amounts to an abandonment of BRT. Of course, it’s always possible that some money will fall out the sky and let us move ahead with it. But for the purposes of this conversation, let’s be real and call a spade a spade.

Anyway, as some of you might have read in a comment I left on Thursday’s post, TransForm, longtime supporters of BRT, suggested that rather than swap all the funds right away, AC Transit go ahead with reprogramming the CMAQ money, a much less questionable action than the RM2 swap. This would allow them to maintain the same service preservation for three years. In the meantime, they would create a task force to study longer term funding options, and explore new ideas about how to get agency operations back to fiscal health. If they couldn’t come up with anything, then they would always have the option of looking back at the RM2 funds later. In any case, TransForm argued, the swap of the voter approved RM2 funding was much too big a decision to be made in such a rush, and particularly at a Friday night meeting with 72 hours notice.

When I saw their proposal, I thought it was a great idea, and was thrilled to see that not everyone was as hysterical about all this as I had been . I went to the meeting sure that the Board would see the logic in their suggestion, and move ahead with it.

AC Transit General Manager Rick Fernandez had other plans. He explained to the Board that the MTC, while open to having a discussion about funding swaps, wanted to see a “sustainable 10 year plan” for maintaining their service before they allowed any kind of funding switches.

A couple of Board members were clearly interested in the idea of just using the CMAQ for now, and dealing with the RM2 issue later. Director Elsa Ortiz floated the idea of some kind of “trigger,” where the RM2 funds would come into play after three years if the situation with the economy had not improved by then.

The General Manager responded firmly that waiting was not a good idea because the MTC is open to the idea now, not tomorrow, and tacked on that it didn’t matter anyway, because if something changed later on and the RM2 funds had been reprogrammed for operating, they could just use them for BRT anyway. Though he repeated this suggestion multiple times throughout the night, his disregard for separation of funding pots appeared to comfort exactly nobody in the room.

Despite repeated questions from the Board about delaying the RM2 reprogramming, his line remained the same – if you wait, MTC might change their minds, so we need to “Strike while the iron is hot.”

Director Ortiz just kept repeating that she didn’t want to committ to reprogramming all the money right away and the General Manager just kept saying too bad, and frankly, this whole exchange went on way, way too long.

At-large Director Chris Peeples wasn’t into the idea of setting a trigger for three years down the road, but also wasn’t thrilled with the idea of just saying go on the RM2 swap immediately, asking for a few months to come up with other ideas:

I’m willing to say let’s do some period of three months or six months rather than 72 hours…I’m willing to talk about it rather than take an action that everyone will see as an abandonment of BRT.

The General Manager was still not having it:

I understand what you’re saying. But MTC wants to see a sustainable plan.

If you’re getting bored reading about what I’m sure seems like a very repetitive discussion, well, I don’t blame you. Imagine how we all felt sitting in a Board room at 8 o’clock on Friday night (which was, for me, the fourth night in a row public meetings sucked up my evening). In any case, you get the picture. That went on for a while.

Director Greg Harper noted that he was (wisely, I believe) suspicious of the MTC, and pointed out that while the fund shift might solve some problems now, it wasn’t a long term solution:

If we’re just going to go on mainlining the heroin of capital funds into our operating expenses, that doesn’t cure anything. There’s a cliff out there somewhere.

Which is a pretty excellent point, considering the General Manager’s endless refrain all night of “sustainable 10 year plan.” There is nothing sustainable about using one time monies that voters approved for something else to keep the buses running. And, of course, there’s nothing “10 year” about a plan that only solves the problem for 6.

Director Davis wasn’t interested, and urged the Board to focus on the “bird in the hand.” He pointed out that AC Transit is hardly the only agency desperate for operating funds, and worried that if they delayed a decision on the swap, someone else could get ahead of them in line to do it and AC Transit would lose their chance.

Which is an excellent point, and perhaps sparked Director Ortiz’s next question, which was basically that since every other agency in the Bay Area is in the same boat as AC Transit with respect to operating fund shortfalls, who the hell would ever agree to take the fund swap anyway?

The General Manager didn’t miss a beat:

Well, BART is capital intensive…

Which planted a thought in my head, and two days later I still can’t decide if I’m being ridiculously paranoid now, or was being ridiculously naive a week ago for not realizing what was actually going on in the first place, which is that BART wants to take AC Transit’s BRT money and funnel it into the fucking Airport Connector. I hope against hope that it is just a hysterical figment of my imagination. The idea of AC Transit having to give up on BRT in order to preserve service is heartbreaking enough. The thought of that money going to, of all things, the Airport Connector makes me want to throw up. (And BTW, if it is a paranoid fantasy, it isn’t mine alone. Directors Harper and Fernandez both referenced the possibility during the meeting.)

In the end, the Board ended up agreeing to request that the MTC divert the CMAQ funding immediately while they convened a task force to explore other funding possibilities, which would report back with their ideas within 4 months. The decision wasn’t speedy, of course. Before they could vote, we had to sit through yet more back and forth with the General Manager about how the MTC isn’t going to give them the CMAQ unless they give up the RM2 as well, and that even though they only want to flip the CMAQ, they need to authorize forsaking RM2 as well just in case, and the Board saying over and over again that no, if MTC won’t give them the CMAQ without the RM2 money, then staff had to bring that back to the Board and get their authorization for it.

At long last, the General Manager consented to follow the Board’s instruction, but more or less promised to come back with a “No” from the MTC. As he put it, the problem with the Board’s request is:

It is not what Steve [Heminger, Executive Director of MTC] asked for.

Gee, that’s comforting. Who elected Steve Heminger, again? Oh, that’s right. Nobody.

And that’s where we left it. AC Transit wants to reprogram their CMAQ money to prevent half the proposed service cuts for the next three years, and would like to take four months to pull together a long term plan for dealing with the operating funds crisis. If they can’t think of any other options, they will reconsider the issue of whether to explore a RM2 swap. Their staff assured them repeatedly that the MTC will not approve reprogramming one pot of money without the other, citing the need for a “sustainable 10 year plan” and opposition to the use of “one time funds” MTC staff as the reason. If MTC Executive Director Steve Heminger says no to letting AC Transit use the CMAQ without giving up RM2 money as well, then the Board will have another special meeting soon to decide whether they’re willing to give up the RM2 money in order to preserve service.

I will get into whether they should or shouldn’t give up the money if it comes to that in a future post (the short version: it hurts, but they should), but for now, I just want to conclude by calling attention to the completely fucked up situation MTC is putting AC Transit in. They have money, the CMAQ, that they are allowed to use for service. They have other money, RM2, that is only for one very specific capital project, and that was approved by voters. They are being told that in order to use the CMAQ, they have to agree to swap the RM2 funds as well.

The ostensible reason is that MTC needs to see a “sustainable 10 year plan” before agreeing to let AC Transit plug some budget holes. This is complete bullshit. The funding task force proposed by Director Peeples’s task force has a much better chance of creating a “sustainable plan” than the RM2 swap, since the RM2 swap’s chance of being sustainable is, by definition, zero.

Also, MTC doesn’t give a flying fuck about sustainable operating plans, or they sure as hell wouldn’t keep throwing money at their favorite child, BART, which has a staggering long term structural deficit. Instead of asking BART to figure out a way to fix their damn problem, they keep passing them buckets full of cash to build more money losing extensions that will inevitably make the operating deficit problem worse. And the Commissioners don’t give a hoot. In fact, they acknowledge that BART is making their problems worse by building extensions at the same time as they vote to award them the money! (“I believe BART is building a permanent leak into their system, but you know…inertia.”)

Good for the AC Transit Board, insisting that if the MTC is going to hold their CMAQ funds hostage for the RM2 ransom, that MTC needs to come out and spell out that that’s what they’re doing. And when that happens, I hope the public will step up and show the MTC just how outraged they are with what is going on. I realize the Metropolitan Transportation Commission operates under most people’s radar, and that it’s nearly impossible to hold any of them accountable for any decision, which is why they continually make such terrible ones. But it’s one thing to just throw public money away on far flung freeways and trains that nobody rides. It’s another thing entirely to tell AC Transit that they have to choose between cutting lifeline service to the seniors and disabled and giving up the only major public transit improvement in the entire inner East Bay, sacrificing the voters’ trust in the process. It’s disgusting, it’s unethical, and people should be up in fucking arms over it.

15 thoughts on “MTC, not AC Transit, is responsible if BRT is canceled.

  1. transbay

    Thanks for transcribing this thorough record of the meeting, coupled with dramatic reenactment. Despite the depressing subject matter, this post was an order of magnitude more fun to read than the meeting was to attend.

  2. Andy K

    Sad state of affairs in Transit funding. This is how boondoggles get built all around the Bay Area- Doyle Dr. has a similar saga. the MTC seems to always play one group off the other in order to build huge projects of seriously questionable utility.

    I wonder if it is possible to get anything done right here.

    Your post was an entertaining read though – too bad it is not fiction.

  3. david vartanoff

    MTC has ALWAYS acted as a subsidiary of BART–staff at the top has often been ex BART officials. MTC’s record of money fudges to support blatantly wasteful BART plans is very long. The “swap” (embezzlement is closer) of Dumbarton Rail’s $91 million from RM2 to beef up the Warm Springs Trojan Horse is merely the most recent. While I am not a supporter of the BRT project, I certainly agree that MTC/BART’s OAC is a total waste–not to mention what useful transit could be done with that money instead. The real story here, in my view is a very old one–MTC and BART represent the affluent generally whiter suburban mindset which could care less whether urban citizens get anything. They are interested in commuter service for the briefcase crowd and sanitized airport access. AC in turn has turned much the same direction–they do a monthly brown bag outreach to Transbay commuters–where is the same interest in the concerns of the much more numerous local East Bay riders?

  4. Karen Smulevitz

    The EastBayExpress carried an interesting article by Robert Gammon (There’s No One In Charge, 9/23-29, 2009), about how the Bay Area needs a strong regional transit agency to interconnect the various services efficiently, and how the MTC just isn’t the entity that will make regional transit work smoothly, or use taxpayer money wisely.
    I was inspired, once again, by watching PBS this weekend and being reminded of the heroic fight by David Brower against the powers that be. When Dinosaur was about to be dammed and flooded, President Eisenhower said, “That dam will be built”, but it wasn’t. Brower lost the next fight, Glen Canyon, but when they were about to dam the Grand Canyon, he prevailed by telling environmentalists, “This doesn’t have to happen”, and they stopped that project.
    Believe – we must believe – that the OAC doesn’t have to happen.

  5. Hayden

    David V.,

    In terms of funding, I’ve always thought of MTC as more a subsidiary of Caltrans and highway/road funding than any of the transit agencies, at least with respect to amounts of money involved. It typically views its job as being a pass-through–short even of simply providing a bully pulpit as it passes the money on. I’m far from an experienced transportation funding observer, though.

  6. Former Berkeleyan

    Thanks for posting this. It’s really upsetting to see this happening to a project that has been in the works for so long, particularly since it has so much potential to improve the east bay’s transit system. perspective on the MTC was also insightful… thanks for doing the work you do.

  7. markko

    v, if you want to know the real reason that AC is in such a massive financial hole, in spite of the voter approved parcel tax to support their operations, take a look at page 17 (numbered p 14) of this document and pay particular attention to the chart titled “Cost Efficiency – Cost/Revenue Vehicle Hour”. Multiply the increased per-hour cost by the number of revenue hours and you’re looking at an amount of money that AC is throwing away due to poor management and giveaway union contracts.

  8. Barry K.

    MTC management employees are paid on the basis of an adopted Executive/ Management salary schedule.

    • Health Benefits Insurance through the Public Employees’ Retirement System (100% MTC-paid employee and dependent coverage).
    • Agency-paid Dental Insurance (dependent coverage shared by the employee and MTC).
    • Agency-paid Vision Care Insurance, employees only (no dependent coverage).
    • Agency-paid Life, AD&D, and Long Term Disability Insurance.
    • Eleven paid holidays per year.
    • One day per month paid vacation leave; for each year of service, an additional day per year is granted to a maximum of 25 days per year.
    • One day per month paid sick leave, with no limit to the amount of sick leave that can be accumulated.
    • Personal Business leave; up to three (3) days per year depending upon date of hire.
    • Monthly Transit/Parking Subsidy.
    • Public Employees Retirement System (PERS); employee contributes a portion of gross salary on a pre-tax basis.
    • Alternative payroll savings plans (tax-deferred deferred compensation plans, two credit unions).
    • Voluntary participation in employee-paid pre-tax dependent care and flexible spending accounts;
    • Supplemental life insurance

    For non-management employees, see pages 4-5
    ***Annual 2.5% merit pay increase!****$20JrFinAnalyst_Jan.09.pdf

  9. Chuck

    @david vartanoff : “The “swap” (embezzlement is closer) of Dumbarton Rail’s $91 million from RM2 to beef up the Warm Springs Trojan Horse is merely the most recent. [...] They are interested in commuter service for the briefcase crowd and sanitized airport access.”

    This is exactly why I think V isn’t being (unnecessarily) paranoid about what’s going to happen to the RM2 funding for BRT if ACT creates a disconnect between the RM2 and CMAQ fund buckets for the project. There’s not a sense for an urgent need for buses through Oakland (and the inner East Bay) because — as I’ve speculated with respect to the OAC — the largest issue fueling why this elevated, expensive, impractical connector is so damned important is mostly because people from the burbs don’t want to HAVE to take a bus through Oakland.

    Taking off the tinfoil hat, I’m glad to see AC Transit proceeding reasonably on this, because as we have seen with other recent funding deluges, the way to really attract funding to a project is to have it as close to “shovel-ready” as possible — at the very least, well planned and funded as much as possible. Keeping the planning going, and having a chunk of money ready to implement the plan is critical, I think, in keeping the BRT project attractive for outside funds.

  10. david vartanoff

    Anyone wishing a sample of ‘suburban attitude toward Oakland transit issues should sample Bart Rage where posts regularly suggest abandonment of BART stations in Oakland, 16th & Mission etc. This from people who use stations with a quarter or less the ridership of those they want to close. No tinfoil hat, just plain speaking.

  11. Drunk Engineer

    markko: AC Transit annual performance figures are published in the National Transit database (you can google it). Compare to any other large US bus transit operator in the database and you will be hard pressed to find any operator that is more efficient. AC compares favorably even against NYC and Muni, which have much greater economies of scale.

  12. david vartanoff

    Cal Supremes refuse to reverse Appellate decision that State Transit funds were illegally stolen from transit agencies by the state. Will be interesting to see if the “embezzled” funds actually come to the transit agencies.

  13. markko

    @drunk engineer, as a matter of fact, i have done those comparisons. a couple of things that you need to be aware of: economies of scale are very elusive in public transit; on the whole, larger operators tend to be *less* efficient than smaller ones (though they tend to be more *productive*) due (most likely) to stronger unions and weaker management as agency size increases. see, for example, on page 13 of the same document (labeled p 10), the chart titled Cost Efficiency by Operator. you’ll note that $/rev hour increases roughly with the size of the operator, and that AC (and Muni, VTA, and Golden Gate) are well above the average of bus operators (you have to eyeball the average of bus operators, for some reason MTC displays an average that includes rail and ferry modes). so, yeah, AC is up there with the other big bus operators. is that okay? does that mean that those people who depend upon AC for their transportation needs shouldn’t hold AC accountable for delivering more service with the dollars that they do have? in my view, this isn’t even a close call. In 2003, it cost AC $120 to run a bus for an hour. By 2007, it was up to $175/hour (or $150 if you factor out inflation). In 2009, it’s even higher. and of the roughly 2 dozen bay area bus operators, only 3 have higher costs. it’s totally fair to criticize MTC, BART, and the state for decisions that make AC’s life and finances more difficult, but we’re making a big mistake by pretending that AC is perfect and has no room to improve on its own.

  14. david vartanoff

    some AC money history. Before 13 AC had a percentage real estate taxfunding deal. They were dumb enough to believe the line from the legislature that the State Transit Assistance replacement of that funding would be enough. We all know how well that has worked, not to mention the ‘Spillover’ money also embezzled by the state. The fixed dollar funding now in place was insufficient when enacted and does not index to rising fuel or labor costs. Unless you are willing to play Reagan’PATCO, labor costs are not going down. Fuel is not going down a lot lower anytime soon either. So, although I am NOT a fan of AC management, I see them as being squeezed as well as making dumb moves. Not only does ridership decline every time they raise fares or cut service, but they have taught a generation that transit cannot be relied on. In the 90s they sold a bus purchase option to Muni because AC didn’t need more buses for less service. More recently, within a year of purchse of the first Van Hools, again, AC had excess fleet resulting in 29 of the VHs going to DC.
    Not a sustainable picture.