The Express is dead to me, part 2

I already wrote about some of the problems I have with Robert Gammon’s Van Hool screed (this week’s Express cover story). I thought I’d said my peace, but after rereading the story, and engaging in a short exchange with Robert Gammon in the comments section of the article (which he ended with the extremely mature “This is the last time I’m going to respond to you because you obviously have no idea what you’re talking about”), I realized that I have a lot more to say.

If you didn’t read it, here’s the link, but for those who don’t want to waste there time, here’s the deal. Gammon’s story is about the Van Hool buses, which I (and everyone I know) happen to like much better than the old buses, but have generated some very aggressive complaints from some riders. Although the anti-Van Hool movement, spearheaded by Oakland activist Joyce Roy, can be extremely loud, they haven’t demonstrated in the past that they can turn out much in the way of numbers.

Anyway, Gammon spends nearly 4000 words interweaving rider complaints about the Van Hools with (nearly always innaccurate) descriptions of AC Transit’s failings, inefficiences, and budget problems. By conflating the purchase of allegedly expensive, allegedly dangerous, and certainly (gasp!) foreign-made Van Hools and alleged ridership declines and service cuts, Gammon implies that AC Transit has placed the purchase of these buses over the interests of its riders.

What’s particularly sad about this story is that Gammon clearly doesn’t understand, well, the first thing about public transit or the history of AC Transit. The article is riddled with errors that might be forgivable from, I don’t know, a high school student? But from a full-time investigative reporter after a three month investigation, they’re beyond embarrassing.

So let’s get into just how misleading this story is, and also how little Gammon understands about transit.

Farebox Recovery

A key measurement of any public transportation agency’s financial health and its ability to be self-sustaining is known as “fare box recovery.” This measurement calculates how well rider fares cover an agency’s annual operating costs — the higher the fare box recovery, the more financially efficient the agency.

Throughout its history, AC Transit’s fare box recovery has been below par. Between 1997 and 2001, for example, it was just 25 percent, or about one-third lower than the national average, according to the agency’s own records. That is, riders paid about 25 cents of every dollar the agency spent on annual operating costs, while taxpayers covered the rest. During the past five years, the agency’s fare box recovery has turned abysmal, plummeting to about 17 percent, or about half the national average.

Okay, there’s several things wrong with this.

First, he’s comparing apples to oranges.

According to the National Transportation Profile, the average farebox recovery ratio for all forms of transit (including commuter rail, light rail, ferries, cable cars, monorails, etc.) is 34.9%. But the national average for bus systems is a much lower 27.8%. This is because buses have high operating costs, whereas the costs for things like rail and ferries are primarily capital costs. Farebox recovery ratio is determined by dividing passenger fare revenue by total operating costs. But that figure is for every transit system in the US, not large agencies like AC Transit. The average farebox recovery ratio for the top 50 agencies in the US is a still smaller 24.1% (XLS!). So while Gammon is correct that AC Transit’s farebox recovery ratio is below par, it isn’t half the national average. Or even close to half.

Of course, national average isn’t even a normal metric agencies use to measure by. Transit agencies generally measure their performance against a peer group – the premise being that it doesn’t make sense to measure an agency like AC Transit against CTA in Chicago or the local bus in Grand Junction, Colorado. Areas with higher costs of living will have higher salaries. When you look at system performance within the Bay Area (PDF!), you see that AC Transit outperforms nearly every other bus operator in terms of farebox recovery.

Finally, there’s the issue of farebox recovery as a measurement. Many transit advocates consider farebox recovery ratio (PDF!) a poor method of measuring transit efficiency. What farebox recovery really measures is fare policy, not system efficiency. In fact, the National Transportation Profile doesn’t even include farebox recovery on their list of performance measures. For performance measurements, the National Transportation Profile considers 2 metrics each in the categories of service efficiency, cost effectiveness, and service effectiveness. Here’s how AC Transit measures up with national figures:

Service Efficiency

Operating Expense/Vehicle Revenue Mile
National Average 2005: $7.8
AC Transit 2005:$10.90

Operating Expense/Vehicle Revenue Hour
National Average 2005: $98.7
AC Transit 2005:$127.85

Cost Effectiveness

Operating Expense/Passenger Mile
National Average 2005: $0.8
AC Transit 2005: $1.15

Operating Expensive/Unlinked Passenger Trip
National Average 2005: $2.8
AC Transit 2005: $3.56

Service Effectiveness

Unlikned Passenger Trips/Vehicle Revenue Mile
National Average 2005: 2.8
AC Transit 2005: 3.06

Unlinked Passenger Trips/Vehicle Revenue Hour
National Average 2005: 35.2
AC Transit 2005: 35.89

So while AC Transit’s operating costs are above par (which is unsurprising, due to the high cost of living in the Bay Area), you’ll notice that in terms of service effectiveness, the agency is outperforming national averages.

Ultimately, this whole discussion of farebox recovery is frankly, irrelevant, since, despite what Gammon seems to think, operating costs have absolutely nothing to do with Van Hools or any other bus purchase. Farebox recovery has declined due to rising operating costs, specifically rise salaries and benefits, which have skyrocketed from $111,221,053 in 1997 to $198,852,158 in 2006.1

Capital Costs versus Operating Costs

Between 2000 and 2007, rising salaries and medical benefit costs, along with higher fuel prices and expensive buses, caused the agency’s annual operating expenses to spike from $195.2 million to $290.5 million. (emphasis added)

Okay. This is beyond pathetic. You know what? I’m used to Gammon having an agenda, and skewing the facts in order to push it, often omitting key information, stuff like that. But this is unbelievable, even for him. Either Gammon, after a “three month investigation” simply doesn’t understand the first thing about transit funding, or he’s being outright dishonest. I don’t even know which is worse. I really don’t understand how anyone could look at AC Transit’s budget information and not get this.

For those who are unclear: there are 2 separate budgets for a transit agency – operating and capital. Operating costs pay for, well, operating – employee salaries, fuel costs, bus repair, etc. Capital costs are for things like buying new buses and building shelters. Often they have entirely different funding sources. Passenger fares, for example, (which Gammon complains were raised while the agency was buying “expensive” Van Hool buses) are used solely to cover operating expenses, never, ever for capital costs. His entire argument is undercut by the fact that he doesn’t even acknowledge (or maybe even understand?) that this is a different pool of money. (I’m assuming that he will address this in at least some form next week when he talks about washing, but to leave it out of this story remains dishonest.)

Anyway, Gammon claims that AC Transit has spent $97.2 million on the Van Hool buses in the past six years. Since Gammon was paid for three months to investigate this, and I’m doing it in my spare time over three days, I don’t have time to get the docments that would verify the amount of money he claims was spent on Van Hools. However, since virtually everything else Gammon mentions in the story is wrong (seriously – he can’t even get the numbers right about how much AC Transit’s tax measure costs2), I’m going to say that I see no reason to believe him. Even if he is right, however, there’s two things I wonder about. First, the repeated implications throughout the story that the Van Hools are unneccessary and and the agency has been wasting money on them completely ignores the fact that we have to buy new buses every year no matter what. Yes, even if AC Transit had not switched to low-floor buses, European or otherwise, we still have to replace aging parts of the fleet.

Second, it is unclear in the article whether the alleged $97.2 million includes expenditures like the $21 million spent on just 4 hydrogen fuel cell buses (and honestly, if someone wants to write an expose on problems with AC Transit, the real scandal isn’t speedier buses – it’s their annoying practice of prioritizing energy experimentation over service). The fuel cell buses are made by Van Hool, I guess, but their exorbitant cost has nothing to do with the manufacturer.

In any case, AC Transit has not, on the whole, been spending any more money on capital costs since the introduction of the Van Hools than they were spending in prior years.

Ridership Declines and AC Transit history

Gammon asserts 4 times in the article that ridership has declined under the leadership of AC Transit General Manager Rick Fernandez, which I explained in Wednesday’s post is simply not true.

He also reveals a total lack of understand of AC Transit’s history. I haven’t the faintest idea where he got the idea that AC Transit was doing well in the 1990s.

Throughout most of its history, AC Transit has operated as a no-frills commuter workhorse. Its American-made diesel buses routinely carried more than 60 million passengers a year up and down the eastern shores of San Francisco Bay, from Richmond to Fremont. By the mid-1990s, the agency was enjoying boom times under the command of general manager Sharon Banks. But then, in early 1999, Banks suffered a series of debilitating strokes and died.3

Okay. I’ve prepared a little history lesson about AC Transit for your enjoyment, but my editor has informed me that it’s interesting enough to justify a post of its very own. So check back tomorrow for a rare weekend blog telling the fascinating (and disturbing) story of the agency for the last few decades.

For now, you get the short version, which is that this is (unsurprisingly) completely wrong. AC Transit’s ridership had been plummeting for 30 years. All you really need to know is that during these “boom times,” in 1996, AC Transit was so strapped for cash that they proposed eliminating all bus service running between 10 PM and 5 AM, and running only 20 lines in the entire system between 7 PM and 10 PM. An emergency bailout from the State allowed them to salvage some service, but they did end up slashing service 16%, eliminating weekend buses entirely on 12 lines and eliminating all service between midnight and 5:15 AM. Night service was not restored again until 1999, after Banks had left the agency. After a renewal of a 1986 sales tax that the agency depended on for much of its funding failed in 1998, AC Transit Director (and current at-large City Council candidate) Clinton Killian told the Chronicle “If we lose again…We’d be out of business. We’re talking about a four-day-a-week service.”

So basically, AC Transit is now attracting significant increases in ridership for the second time in three decades, the first being a brief period in the early part of the decade when a flood of sales tax revenue fueled by the dot-com boom allowed the agency to dramatically ramp up service. After the dot-com crash, the money dried up and AC Transit was forced to slash service once again. Annual unlinked trips went from 63 million in 1997 to a high of 70.8 million in 2001, then plunged to 62.9 million by 2003. (The ridership surge, then decline due to service cuts was exacerbated by the elimination of a program, introduced in 2001, that provided bus passes to kids at the same time.) With the introduction of the 72R that year, the agency was finally able to attract new riders again, and by 2006, annual unlinked trips were back up to 66.9 million – not up to dot-com heights (this is what Gammon is referring to when he talks about a 9% plunge in ridership), but better than the agency had been doing for years beforehand.

Gammon implies a causal connection between the introduction of the Van Hools and a decline in ridership, when in fact, there is a strong correlation between the introduction of the Van Hools and the increase in ridership. Ridership has increased since the introduction of Van Hools to beyond mid-nineties levels.

Why this matters

I want to make it very clear that I do not support everything AC Transit does. I think they have made some very poor decisions in the last several years. But buying the Van Hools was not one of them. If there is a devil in the story of AC Transit, it isn’t Rick Fernandez, or the evil Don-Perata backed AC Transit board and their wasteful anti-American buying practices, but Prop 13, which permanently deprived AC Transit of a stable funding base.

Gammon’s entire argument is fundamentally flawed due to his willful ignorance of the way transit systems work. I don’t know if there’s an ethical issue with just being wrong about everything, but at best, this is the height of professional irresponsibility. It seems fitting that these seemingly endless poorly-researched hit pieces on public transit are coming from a paper that chooses to house its offices in transit-inaccessible Emeryville – the complete ignorance of transit issues is reflected in their stories about eBart, BRT, high speed rail, and now this. Why would Gammon know anything about the bus? He doesn’t ride it.4

The shocking level of dishonesty in this story disturbs me not just because I like the bus, but because it pains me to watch local media so completely abdicate their responsibility to tell the truth. This story isn’t just slanted. It’s completely wrong. (Which, incidentally, is why I was very surprised to see the Capricious Commuter, whose writing I generally enjoy, say about the story “Gammon is careful to give both sides”.) When the Express is happily running feature stories full of outright lies, it only gives more fuel to Ron Dellums’s disturbing attempts to instill a sense of distrust in news reporting. The more stories like this you read, the more legitimate his arguments begin to seem.


1. Gammon repeatedly links the agency’s skyrocketing operating costs with the purchase of the Van Hools:

Fernandez defends AC Transit’s financial record and said there were many reasons why its fare box recovery nose-dived. “It’s hard to take a look at it in isolation,” he said. “Our costs have skyrocketed. The cost of medical has gone up dramatically. Fuel costs are up dramatically.”

But it’s also the case that buying expensive European buses has cost the agency several million dollars in the past half decade. And the costs for riders are likely to keep rising.

2. Gammon complains:

It also convinced East Bay voters to approve one sales tax and two property taxes in the past eight years — Measures B, AA, and BB. The last one, BB, which voters approved overwhelmingly in 2004, is a $48-a-year parcel tax that has generated about $17 million annually for the agency.

Let’s start with Measure B. Measure B, which passed with 81.4% in 2000, was a renewal of a 1986 half-cent sales tax. It was a county-wide measure that raises funds for a variety of transportation projects, including BART, ACE, paratransit, and pedestrian and bicycle safety capital projects. Only 22% of Measure B funds goes to AC Transit’s operating funds.

Next up: Measure AA. Measure AA, which passed with 68.1% in 2002, is a $24/year parcel tax that goes specifically to AC Transit. Measure BB, which followed in 2004 and passed with 72.5% of votes, was an increase and extension of the Measure AA parcel tax, adding another $24/year per parcel, not a $48/year, as Gammon asserts. There is absolutely no excuse for this sort of error.

3. Gammon annoyingly follows this with an implied attack on new manager Rick Fernandez’s qualifications:

AC Transit’s seven-member board of directors immediately promoted one of her deputies, Rick Fernandez. He had arrived in the East Bay a few years earlier after a career in midlevel management at New Jersey Transit and had never run a transit agency before.

That statement sort of implies that it’s normal for AC Transit to hire managers who have run transit agencies before, or at least that Sharon Banks had. Guess what Sharon Banks did before she was promoted to AC Transit general manager? She was their lawyer. Seriously. She had not only never run a transit agency before, she had never even worked in management of one. She had never done anything but be an attorney!

4.

But as bouncy as the forty-footers are, this reporter found the sixty-foot, accordion-style Van Hools an even rougher ride. AC Transit plans to make these four-door sixty-footers, which cost about $530,000 apiece, the backbone of its Bus Rapid Transit system. But on the potholed streets of Oakland, along San Pablo Avenue and East 12th Street, the sixty-footers’ suspension makes them a poor choice for commuters. In the rear of the bus, the ride was so jarring that it was impossible to read a newspaper or magazine.

If Gammon ever rode the bus, he would know that accordion-style buses have nothing to do with BRT, or even Van Hools. AC Transit has been using accordion buses along busy routes like the 82 line forever.

7 thoughts on “The Express is dead to me, part 2

  1. Capricious Commuter

    Talk about your hit pieces! I think you were a little hard on Bob, although I also had trouble making the link between the Van Hool purchases and AC Transit’s misfortunes. I did read this all the way to the bitter, bitter end. You make a lot of good points, but I really can’t stand to see a fellow reporter slammed like this. Seems one could criticize the story without raising questions about the writer’s character.

  2. V Smoothe Post author

    Capricious Commuter –

    I have long-standing serious problems with Gammon’s deceptive and often bordering on libelous reporting, so while my words may seem particularly harsh, rest assured that it wasn’t only issues with a single story that brought on this level of invective.

    And on a less mature note – he started it. Seriously. In response to my comment listing ridership data from the National Transportation Profile, his response was “You obviously have no idea what you’re talking about.”

    Having said that, you’re probably right that I could have been less personal in my critique, and I will bear that in mind for future posts.

  3. len raphael

    for the years in the transit report, a limitation of muni financial info was that operating expenses don’t include depreciation and amortization of equiptment and building expense so you can’t easily compare the cost efficiency of buses to rail. that might have changed for 2007 data. The ac transit web site states that there is not enough space on their site to post their 2007 financial statements so can’t tell if depreciation is included in operating expenses for that year.

    so without a guestimate for depreciation, have to take your statement as gospel that the true operating expenses of buses including capital depreciation is not inherently higher than say bart.

    looking at the efficiency ratios for other northern californ transit agencies in that link you gave, suggests that AC is better than some and worse than others. But those fare and ridership numbers suggest that overall public transit is barely surviving in the bay area and needs vast infusions of public money to subsidize relatively few riders, but would need some comparisons to total cost of automobiles w all associated costs to know.

    if operating cost per passenger is higher for buses than rail, and equipment fixed capital costs relatively lower, why doesn’t AC mothball the big vehicles except for peak times, and run Emery Go Around size buses more frequently during the off peak hours? Maybe not in East O and Richmond, but in much of North Oakand off peak hours the AC busses appear to be 10% occupied.

  4. V Smoothe Post author

    Len –

    No need to take my statement as gospel – I have provided links to all the necessary information. I encourage you to page through the National Transit Database’s information – the National Profile and the Top 50 Agencies profile. Fare revenue and operating costs are broken down there for every agency by mode of transport, so you can see how the numbers work. Rail has higher farebox recovery ratios because it is capital cost intensive rather than operating cost intensive – when you figure in capital costs, rail is a more expensive form of transit.

    I’m not sure why you came to the conclusion that public transit is barely surviving, however. I would argue that the subsidies spent on public transit are small compared to the taxpayer subsidies for automobiles, and note additionally that a very important benefit of public transit is that it is taking those cars off the road, easing congestion for drivers. Not to mention the larger long-term environmental costs of driving. That’s an argument that deserves a post of its own, though. For now, I would encourage you to read through this Capricious Commuter post and the accompanying comments.

    I’m not quite sure I understand what you think the benefit of not using large buses during off-peak hours is. If you can clarify, perhaps I’ll be able to respond to that better.

  5. Eric

    Using smaller buses off-peak will make it look like operations are more efficient, since buses will look fuller, but I would hesitate to conclude that that would reduce operating costs all that much. It doesn’t seem like you’d save all that much on fuel, and of course there are still labor costs. And that doesn’t even take into account capital costs associated with accumulating an off-peak fleet. VTA is starting to introduce smaller buses on community service routes as part of its new service plan, so we’ll see what magnitude of savings that garners.

  6. chris k.

    I read the feature somewhat quickly, but one of many questions this series of exposes seems to beg is: “Has anyone at AC Transit taken bribes in exchange for the contract to purchase these buses.” Matters of possible public corruption are fair game for examination by the press and the public. Of course, we should also examine and scrutinize the checks and balances on such contracts and spending, from the AC Transit Board and other oversight mechanisms. Sadly, many local voters around here don’t even bother to cast informed votes for the elected spots on the AC Transit Board.

    That being said, personally, I’m an advocate of the most aggressive BRT alternative, with a separated right of way so the “Subway on tires” doesn’t have to compete for space with egomaniacal private car drivers.

    In regards to the country of origin of the bus equipment, believe it or not, I was hit with a note of sadness after Enrique Penalosa’s, moving, standing-ovation-bringing speech in City Hall last year learning from Rick Fernandez that the coming BRT system equipment would not be made by American workers.

  7. Julie W

    all the politics and skewed statistics aside, I have to say I hate those buses! Maybe they’re okay for in-town trips, but they are insanely uncomfortable for trans-bay commutes. I hate that half the seats face backwards, that you have to climb up onto platforms to the seats, that there is not nearly enough legroom for 4 people sitting on seats opposite each other, and that the suspension is so bad you nearly hit the ceiling when going over freeway bumps at 60 mph! Bring back the good old green commute buses!