Santa Clara County Grand Jury • 2008-2009

2008-2009 Santa Clara County Civil Grand Jury Report Santa Clara Valley Transportation Authority Taking the Public for

Published: June 01, 2009 27 pages
Ver PDF original

Findings and Recommendations 17 findings

F1a
The term “watchdog” is a misnomer. The structure and composition of the CWC called for in 2000 Measure A, as well as how the CWC responsibilities are interpreted by VTA staff and the Board, prevents the CWC from performing its duties effectively.
No recommendations for this finding
F1b
Although arguably the CWC may have technically complied with the minimum functions specified in Measure A, the CWC is failing the public by not providing reliable information to make intelligent decisions regarding transit in the county.
No recommendations for this finding
F2
The CWC is not independent. CWC members are appointed or have their appointment approved by the VTA board, the very people they are charged with overseeing. In other transportation agencies in California, citizen oversight bodies are appointed and/or approved by independent third parties (See Appendix A).
Related Recommendations (4)
R2
CAC/CWC members are approved by the VTA Board, compromising independence of thought and action.
R2a
The Grand Jury recognizes that the assignment of members of the CAC as the CWC is part of existing law and cannot be changed without a new ballot measure. However, the Board is at liberty to change the CAC bylaws and hence change who approves membership in this combined committee. The Grand Jury recommends that the Board change the bylaws so that the selection process is conducted by, and selections approved by an independent third party.
R2b
Former elected officials should not be allowed to sit on the Citizens Advisory Committee to eliminate the possibility of bias from prior responsibilities. 16
R2c
The CWC should have its own staff, independent of VTA staff, to set meeting agendas, coordinate project investigations, write reports and do other tasks assigned to the CWC.
F3
The CWC is not in control of its own agenda. CWC bylaws do not explicitly allow members to participate in setting the agenda for their own meeting. Other VTA committees such as the Policy Advisory Committee have this explicit right. The CWC chairperson reviews the staff-proposed agenda in advance and can suggest changes. Other members only view the agenda when formally published.
Related Recommendations (1)
R3
The bylaws should be amended to allow the CWC to prepare and set their own agenda without involvement of VTA Staff. If VTA Staff wishes to place an agenda item, they should consult with the CWC Chairperson, not the other way around.
F4a
While meeting the minimum requirements, CWC reports to the public have not been comprehensive, timely, or complete. The CWC has published only two three-page status reports since its inception in July 2006. The financial audit for FY 2007 (June 2007) was conducted by an independent auditor retained by VTA staff, not an independent auditor retained by the CWC. In FY 2008, audits of 2000 Measure A expenditures will be conducted by BOTH an independent auditor retained by VTA and an independent auditor retained by the CWC. The CWC has failed to take the opportunity to file more frequent reports on Measure A 2000 expenditures, such as monthly or quarterly reports.
No recommendations for this finding
F4b
The CWC has failed to inform the public that the 2000 Measure A sales tax revenue is not sufficient to complete all of the Measure A programs, and federal and state funding has not been identified to fill the gap. This has been clear to VTA management for some time.
No recommendations for this finding
F5
The VTA staff has forced its own perspective on the CWC regarding committee roles and responsibilities. VTA staff dictates have stifled independent thinking on the part of CWC members.
Related Recommendations (1)
R5
The Board should direct VTA staff to revise its training materials and memoranda to include best practices of other transit agency watchdog committees and encourage the CWC to establish its own priorities and responsibilities. See Appendix A.
F6
Board workplans and meeting agendas are developed primarily by VTA staff.
Related Recommendations (1)
R6
The VTA Board should prepare its own agendas and workplans. The Chairperson of the Board should consult with Board members, standing and advisory committees and VTA staff to formulate the agenda.
F7
With the exception of members from San Jose and the County, Board members have inadequate staff support to fully participate in Board activities. The volume of information supplied to Board members can serve to obscure key issues that deserve focus.
Related Recommendations (1)
R7
The VTA Board should have its own staff, independent of VTA staff, to set meeting agendas, do project investigations, write reports, publish minutes and do other tasks required by the Board. 18
F8
Both the Hay Report and the State Auditor Report recommended that the VTA Board make every effort to insure that new board members have transportation experience by appointing new members with previous transportation experience and reappointing members for multiple terms. Nevertheless the Mayor of San Jose recently appointed two new board members to represent San Jose who have no previous transportation experience.
Related Recommendations (1)
R8
New VTA Board members must have transit knowledge. The VTA Board should require at least one full year on the PAC or another VTA advisory committee prior to being appointed to the Board.
F9
VTA failed to provide an updated Measure A Revenue and Expenditure Plan per their published schedule. As a result, voters were deprived of critical information necessary to make an informed decision regarding 2008 Measure B, an additional 1/8 cent sales tax to fund operating costs for a BART extension to San Jose / Santa Clara. The VTA had sufficient time and information to complete this update and made a deliberate decision not to publish it prior to the election. As a result, voters were never told that full funding for the BART extension would jeopardize the completion of the other Measure A projects.
Related Recommendations (3)
R9
Other Funds 17,889 $ 18,172
R9a
The VTA Board should explain why these facts were withheld from the public.
R9b
In future elections, the VTA Board should ensure that VTA staff provides the public with a comprehensive explanation of the ramifications of each measure, including the impact on both capital and operating funds, projections and budgets, as well as the effect on other projects.
F10
VTA effectively suspended the shovel-ready light rail extension to Eastridge, without informing the VTA Board or the CWC in advance. Additionally, they used evasive language to prevent the Board and the public from understanding the true status (“reaffirming” support) of the project. The people of East Valley deserve better from the representatives of San Jose on the VTA Board. 19
Related Recommendations (3)
R10
Interest Earnings on Avg Bal (1.5%) 9,976 $ 15,523 Total Revenue $ 12,947,251 $ 21,921,028 In order to begin Measure A programs in advance of tax collection, VTA issued anticipation bonds. $445M in proceeds from bond sales, which has to be repaid from Measure A revenue, was already on the books before a single dollar of tax was collected. By June 30, 2008 Measure A long-term debt was still $371.8M. Debt service cost over the life of Measure A was projected to be in excess of $2B in the 2006 Revenue and Expenditure Plan. At its April, 2008, meeting, VTA General Manager Michael Burns introduced the proposed process and guidelines to update the 2000 Measure A Revenue and Expenditure Plan. Concurrently, the Board was in the process of making key decisions on the BART project, the Eastridge light rail extension, and the Caltrain double-track to Gilroy. Approval of the updated Revenue and Expenditure plan was tentatively set for September 4, 2008. In an April 28, 2008, San Jose Mercury News article, Mr. Burns advised that his agency relied on overly optimistic scenarios that it could fund the $20+ Billion in transit improvements. He conceded that the current expenditure plan does not work and that it was clear that all projects could not be afforded. At its June 11, 2008 meeting, the Downtown East Valley Policy Advisory Board was told by VTA staff that the Capitol Light Rail Extension to Eastridge had completed the design phase but was being suspended pending the updated Revenue and Expenditure plan. Particularly noteworthy was the fact that VTA staff suspended the project without prior Board authorization. In a memo to the Downtown East Valley Policy Advisory Board dated June 19, 2008, the General Manager reconfirmed the schedule of the planned update to the Revenue and Expenditure Plan. At the August 7, 2008 VTA Board meeting, several significant events occurred: • Mr. Burns advised that the Light-Rail Extension to Eastridge “has not been stopped but that there is not enough money to complete all of the Measure A projects. . .” The Board “reaffirmed” its support for the project and recommended continuation of planning and design activities. However, property acquisition, utility relocation construction and completion of bid documents for construction contracts were not authorized. • Measure B to increase sales tax by 1/8 cent to be used for BART operating costs was placed on the November ballot. • The staff presented a report to the Board supporting the sufficiency of the 1/8 cent tax proposal to cover the projected deficit in BART operating costs. The conclusion was based on a new 30-year sales tax revenue estimate. This report also provided sufficient information to update the revenue estimate in the new Revenue and Expenditure Plan. The September, 2008, scheduled presentation of the update to the Revenue and Expenditure Plan was not delivered and never rescheduled. The VTA Board made no effort to determine the status of the plan or if there would be significant disruption or cancellation of Measure A projects. As a consequence, the public was not informed of the 2000 Measure A 30-year financial situation before the November 2008 election. At a Board Workshop on December 4, 2008, approximately one month after the election, and in the face of sales tax revenue uncertainty, it was decided to forego a full 30-year plan for Measure A and to focus on a two-year capital expenditure plan. The two-year capital expenditure plan is to be made available in June 2009. It is expected to include capital expenditures for the BART extension and two other programs – BRT (Bus Rapid Transit) on the Alum Rock corridor and certain Caltrain enhancements in South County including double tracking to Gilroy. A notable exception in the preliminary documentation is the absence of any funding for the light rail to Eastridge program which appears to have become totally dependent on unidentified federal funding. Since that time the VTA staff has responded to pressure from the Board and agreed to provide a ten-year outlook. This plan has yet to be delivered. If the 30-year Revenue and Expenditure Plan had been updated as planned, it likely would have shown that if the BART extension were built as planned, the remaining 2000 Measure A projects would require massive additional investment by the state and federal government plus additional sales tax revenue from Santa Clara County. 2008 Measure B passed by approximately 700 votes above the 2/3 threshold required for passage. If the updated Revenue and Expenditure Plan had been readily available to the public, Measure B might not have passed. The VTA had sufficient time and information to complete this update and made a deliberate decision not to publish it prior to the election. The public deserves an explanation. Light Rail to Eastridge Project Status According to the Measure A Semi-Annual Report (internal) dated June, 2008, this project was to receive $276.8M of its $334.3M cost (83%) from Measure A tax revenue. Now that virtually all Measure A tax revenue is being reserved for the shortened BART extension project, the light rail to Eastridge project has been put on hold until other funding sources can be identified. The only work currently being done on the light rail to Eastridge project is to modify the completed EIR to meet federal standards in the hope of receiving federal stimulus or other transportation funding in 2010. Use of 2000 Measure A Funds for Non-Measure A Projects Puts Measure A Projects at Risk The VTA Board has approved the exchange (swap) of approximately $107M of Measure A funds for use on non-Measure A programs in exchange for a payback from anticipated State Transportation Improvement (STIP) funds at a future time. The payback from the state depends on state approval of two Measure A projects for state (STIP) funding, approval that is not guaranteed, especially in difficult budgetary times. In addition, these programs are low on the Measure A priority list and may never be built. Board approval of the swap was granted in two separate votes in February, 2007 and December, 2007. As of June, 2008, approximately $9M of Measure A sales tax revenue had been spent on non-Measure A programs. At the same time, the 2000 Measure A program was over $361M in debt, having issued bonds to pay for project development in advance of the receipt of sales tax revenue. There was no prior discussion or notification to the Citizen Watchdog Committee. The CWC was informed after the fact in a report from VTA staff. One key Citizen Watchdog Committee duty is to certify to the public that Measure A funds are only spent on Measure A projects. The CWC needs to make an informed decision about what constitutes spending on 2000 Measure A projects and determine whether the fund exchange meets the CWC’s definition of legitimate spending. Furthermore, the CWC is obligated to inform the public of the fund exchange and expenditures in its reports to the public. At its February 11, 2009 meeting, a discussion regarding the CWC’s responsibilities in this area was initiated by a CWC member and stifled by VTA staff in attendance by reminding the CWC members of the limitations in their responsibilities. The CWC did agree to ask their auditor to “assist the committee in its fiduciary role.” At and following this meeting two members of the CWC resigned, leaving a total of five vacancies. November 2008 Ballot Measures Several relevant facts should be noted with respect to the November, 2008 ballot measures: • VTP 2035 Transportation Plan was first presented to the public eight days after the November, 2008 Election. At the time of the election, the voters were voting to approve a plan that none of them had seen. The plan was formally published in January, 2009. • Measures C & D were approved for the ballot as part of the Consent Agenda. There was no debate or discussion regarding these Measures. • Measures C & D were not discussed at any Advisory Committee meetings prior to the vote of the VTA Board. • The Citizens Watchdog Committee was unaware that the VTA Board was proposing to add responsibility to review and approve the long-range transportation plan every six years. It should also be noted that the CWC ceases to exist on June 30, 2036. • The tax amount for Measure B (1/8%) was approved for the ballot on August 7, 2008, after selected Board members were briefed on a private poll conducted by Silicon Valley Leadership Group regarding opinions of the electorate with respect to additional tax for transportation purposes. The poll indicated that a ¼% tax would not pass while a 1/8% tax might pass. VTA contracted with a private firm (AECOM) to justify the 1/8% level as sufficient. The report was delivered to the Board on August 4,
R10a
The Board should amend the CAC/CWC bylaws to provide the CWC with the authority to review and make recommendations regarding any changes to the priority and status of all 2000 Measure A programs. This is a specific request over and above the responsibilities assigned by the 2000 Measure A ballot wording.
R10b
The staff should not make unilateral changes regarding Measure A projects without prior CWC review and Board approval. Specific procedures should be put into place to assure that the VTA Board has reviewed and approved all changes to the scope, funding and schedule of Measure A projects before VTA staff proceeds.
F11
The VTA Board approved Measure C and D to be placed on the November 2008 ballot as part of the consent agenda and without prior review by advisory committees. This occurred on the day prior to the deadline for the submittal of ballot measures for the November 2008 election.
Related Recommendations (1)
R11
The Board should ensure that ballot measures are submitted for Board approval on the regular agenda (never the consent agenda) after thorough review and discussion at both advisory and standing committee meetings.
F12
The Board put 2008 Measure D on the ballot, assigning the responsibility for citizen review of future VTA long-range strategic plans to the CWC, without notifying the CWC of its intent to do so. In addition, the CWC will cease to exist on June 30, 2036, leaving the subsequent responsibility for review of the long-range plan in limbo.
Related Recommendations (1)
R12
The hastily implemented Measure D needs to be rethought before 2036. The Board should assign the responsibility for reviewing the long-range strategic plan to an organization that will remain in existence permanently. 20
F13
The Board allowed Measure C to be placed on the November 2008 ballot asking voter approval of the VTP2035 plan when neither the Board nor the public had seen a draft of the full plan.
Related Recommendations (1)
R13
The Board should ensure that VTA’s long range strategic plans are thoroughly reviewed and vetted by the public prior to being offered for approval by whatever body is deemed responsible.
F14
Measure A funds were used on non-Measure A projects. The Measure A fund exchange violates the 2000 Measure A ballot requirement that 2000 Measure A revenue was to be spent only on 2000 Measure A programs. But VTA believes it is entitled to use these funds for other programs as long as repayment is certain. It appears that there is in fact repayment uncertainty. Even though the initial $50M swap was approved in February 2007, the CWC certified (over the chairperson’s signature) in the FY 2007 2000 Measure A Status Report that all Measure A revenue was spent only on Measure A programs. It is clear that the CWC does not fully understand its responsibility with respect to this requirement.
Related Recommendations (1)
R14
The Board should give the CWC the opportunity to review all 2000 Measure A fund transfers. The CWC should point out such usage of funds to the public in their reports. The CWC should make a public decision whether this usage of funds is consistent with the intention of the voters with respect to 2000 Measure A.
F15
Measure B on the 2008 Ballot approved a 1/8 cent sales tax for BART operations. Tax collection is slated to start when the BART project receives full federal and state funding. However, VTA intends to start collecting this tax when only the first 2.2 miles of the BART project are funded, not the complete project.
Related Recommendations (1)
R15
The Board should consider the intention of the voters as well as the specifics of the ballot measure when considering this issue. This tax should only be collected when funding for the full 16.1 mile BART extension is obtained from the state and federal government.

Conclusions 16

No Responses Found 2

Government entities assigned to respond to this report. No response documents have been linked in our database.

Santa Clara County Board of Supervisors Elected County Office
Santa Clara Valley Transportation Authority Transit Authority