The Nation’s Worst-Managed Transit Agency

For years, Washington, D.C. has been considered by many students of government to have the nation’s worst city government. Similarly, the Washington area transit system, Metro, is in contention as the nation’s worst-managed transit agency.

The Metro Rail system was built with federal dollars, with the understanding that local governments would pay for its operation. But no one was prepared to pay for rail reconstruction, which is needed every 30 years or so and which costs a substantial fraction of the original construction cost. Now, some of the system is approaching 30 years of age and is breaking down with increasing frequency.

But Washington’s Metro is not the nation’s worst-managed transit agency — not by a long shot. That dishonor goes to San Jose’s Santa Clara Valley Transportation Authority (VTA).

VTA persuaded local taxpayers to raise sales taxes to construct billions of dollars worth of rail transit lines. But it failed to budget enough money to operate those lines. Even as it opened new light-rail lines in the early 2000s, VTA was forced to severely cut bus and rail service on its existing lines. The result was a 34 percent decline in transit riders.

A few weeks ago, a consultant hired by VTA released an audit blaming the system’s board of directors for its failures. “The Board has approved capital projects that were political solutions to address the needs of certain local neighborhoods at the expense of regional congestion management,” states the audit. “As a result, VTA has built transportation systems that have low ridership and are also expensive to operate and maintain.”

After the audit was published, VTA’s chief financial officer resigned. Unfortunately, none of the board members followed. Instead, they hired a temporary chief financial officer for the munificent sum of $13,600 per week for 39 weeks. That’s a total of $530,400 and more than three times the weekly pay of the previous CFO.

It gets weirder: The new CFO has no history in the transit industry. Instead, he is a former mining company executive who oversaw a shell game of companies taking over other companies. “He has a lot of experience with projects and a lot of our money is tied up in projects,” says VTA’s general manager. There are so many similarities between digging gold and sapphire mines and building transit lines — like none.

One wonders what the new CFO might do. Merge VTA with Washington Metro? Bull the stock with rumors of an untapped source of transit riders? Corner the market in light rail?

Meanwhile, everyone is trying to ignore the gorilla in the corner, which is that VTA’s board wants to spend $4.7 billion to connect the San Francisco BART system to San Jose. The agency only has enough money to build to the edge of San Jose, but even if it had all the money for construction, its general manager admits “we clearly do not have the money to operate the system.” Nevertheless, the board recently voted to spend $185 million — more than half of VTA’s annual operating budget — on preliminary engineering.

Meanwhile, VTA is still short on operating funds, so it is contemplating “eliminating or consolidating” service on more than a quarter of its remaining bus lines.

Almost every Bay Area transit group opposes the BART line. But the audit (which itself cost $500,000 — I would have done it for $5,000) barely mentions the BART line, and the Silicon Valley Leadership Group (formerly the Silicon Valley Manufacturers Group) strongly supports it.

Last June, San Jose voters angrily rejected VTA’s request for a further sales tax increase to build the BART line. VTA’s board members are hoping they can convince taxpayers that they are fiscally responsible enough to deserve a tax increase anyway. But spending $530,400 for less than one year’s work by a temporary CFO hardly seems conducive to gaining the taxpayers’ trust.