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We have documented some of the waste identified in VTA's 2003 Fiscal Year Recommended Budget. This is the first time we have done something like this. Note that we are not endorsed nor affiliated with the VTA in any way.
Waste that was identified by SCVTARU is in BOLD text. Our notes on this fiscal year's budget are at the end of this document.
Get your copy of the VTA's 2003 Fiscal Year Recommended Budget at any library in Santa Clara County, or at VTA's Customer Service Office at N. First and Santa Clara Streets in San Jose. Alternately, you can get an Adobe Acrobat copy from VTA's web site.
Be advised that web links outside vtaridersunion.org will open up another browser window. This makes it easier for you to read the budget while referring to relevant information that is not in the control of vtaridersunion.org.
If we missed anything, do not hesitate to let us know.
In the General Manager's message (dated 4/30/2002), Peter Cipolla basically states that the VTA will propose a budget with 2% less operating expenses, as well as a 5% service reduction, a 15% fare increase, and nearly 300 layoffs. This is due to the recession, and thus the loss of local sales tax revenue needed to run the bus and light rail system. Cipolla states that failure to address the situation over the next few months will result in "an even more critical situation" (read: more service cuts) next June. He finally states the need to secure revenue streams to support the transit system.
The resolution to approve the budget is appended at the front of Section I. A brief history of everything VTA is about (mission statement and vision) is in this section. VTA has 461 buses in active service, including 139 new low-floor buses. VTA has nearly 30 miles of light rail with 50 stations, 14 park-and-ride lots, and 50 light rail vehicles (LRVs) in service.
This section also summarizes how much VTA pays for various transit services that serve Santa Clara County (Caltrain, ACE, Dumbarton Express, the Highway 17 bus service, employee shuttles, DASH, and the Airport Flyer).
Budget is $341 million for this fiscal year but $336 million in revenue is projected for this year. Deficit is projected to be over $30 million, with $25 million coming from "debt services". There is a $3.5 million increase in the contingency funding for the Office of the General Manager. That fund, according to the VTA, is used to fund urgent and unexpected programs or projects not specifically identified and budgeted. The budget admits that their strategies to minimize the impact of the recently-approved fare hikes and services are "for the time being." The VTA admits that even a sudden turnaround in the economy will not be enough to offset the budget deficit.
A "special committee" of three (3) VTA executives reviewed VTA operations expenditures and to implement a 15% cost reduction plan. The final claim was that VTA could not find the money for the 15% reduction goal without cutting various services. Missing from the 2003 Fiscal Year Budget document are notes from that meeting. A mid-year budget review will take place at the January 2003 VTA Workshop.
In the last 2 years, 80% of VTA's operations budget comes from local and state sales taxes. According to the VTA, ridership will be reduced by 1.5% to 51.5 million riders/year due to the service cuts. The VTA says that fares comprise 10% of the operating revenue, and that the fare increase will result in an increase of $4.6 million in revenue in the 2003 Fiscal Year Budget.
VTA is using preventative maintenance to reduce the $30 million operating deficit, with no stable funding available. VTA admits that "ultimately, we will need to replace our infrastructure assets."
Operations wages and benefits on page 26 features an increase of one non-transit position despite 254 layoffs in bus and light rail operators, mechanics, and support staff. That non-transit position is a "Senior Management Analyst" at $107,000 per year. There is an undisclosed $300,000 expenditure in Other.
VTA implies that a $1 million reduction in recruiters means that they will be right where they were in the summer and fall of 2000 - unable to hire personnel to maintain the system in good economic times.
A $3.2 million reduction in consulting for IT staff at VTA is noted. Elimination of 4 planning positions for $327K in savings means unplanned requests from the community will take longer (if at all) and possibly at the expense of staff attention to other programs.
$711K in reductions to media advertising on page 32 mean VTA can't advertise itself as an alternative to driving.
Page 47 - $582K missing in undisclosed "contractual agreements" reduces $780K in position elimination savings to just under $200K. This is for the budget of the Office of the General Manager, Peter Cipolla.
$253K increase in security. Proposed budget for security eliminates late night security guards at South SJ LRT stations (Capitol, Cottle, Snell, Blossom Hill) and daytime security at Reamwood and Vienna stations. Proposed budget increase patrols for crime and vandalism in the East Valley, a VTA garage in Mountain View, and Gilroy's Caltrain station. (page 53)
The elimination of 24 Bus Operator trainee positions and four (4) Light Rail Mechanic trainees to save over $1.5 million is bad news for transit operations. This elimination guarantees that when the economy fully recovers, the VTA will not have the operators nor mechanics needed to meet the transit demands of the public.
$497K increase in Other and Miscellaneous spending in the ops-maintenance budget on page 63.
Development and Congestion Management budget on page 80 - $1.4+ million increase in "Other Services" spending - specific funding with dollar values undisclosed.
Page 83 - elimination of one Senior Customer Service rep. and 5 Customer Service Representatives to save $325K has the following consequences:
58 projects were closed, cancelled, or scaled back. Amongst the casulties: 33 Replacement and 25 Expansion buses (money went to preventative maintenance funds). Also, the VTA will try to save money by leasing the new light rail vehicles just purchased. To save more money, the VTA will only focus on high-priority projects to improve service on Line 22. (unspecified)
Pages 96-97 -- $2.3 million increase in consultants to "address multiple issues" for the Downtown/East Valley light rail project.
Last June, the VTA Board and the Santa Clara County Supervisors spent $10 million of your 1996 Measure B transit tax dollars on a parking garage next to Sunnyvale's Caltrain station - a garage that is expected to be completed by this fall. The garage is expected to be completed this fall.
VTA is also spending $3 million of your tax dollars this fiscal year on artwork for the Capitol light rail project.
Finally, as reported recently on our mailing list, a total $3.2 million of your tax dollars is being wasted on unnecessary litigation and overbidding against Homer J. Olsen, Inc., a contractor. Here are the sordid details below:
Because our company filed a lawsuit against the Santa Clara Valley Transportation Authority (VTA) they have awarded contracts to other contractors at an additional cost of 1.2 million dollars above our low bids...VTA has spent approximately 2 million dollars litigating against our claims instead of accepting a binding arbitration decision we have requested...VTA appears to want to continue litigating to feed more millions of the taxpayers dollars to their L.A. lawyers and claims consultants...Monies our company is entitled to would have cost the taxpayers less if recovered by frugal alternate dispute resolution, instead of the expensive litigation that has been going on for 3 years.
Final analysis: Only certain portions of VTA's proposed 2003 Fiscal Year Budget were zero-based. A zero-based budget implies that managers need to build a budget from the ground up, building a case for their spending as if no baseline existed -- to start at zero. Traditional modified-based budgets (what the VTA uses) start with last year's expenditures and add a percent for inflation to come up with next year's budget. A zero-based budget, when implemented correctly, can identify waste better than a traditional budget. San Francisco's MUNI, from what we heard, is implementing a zero-based budget. In addition to implementing stable revenue sources soon, the VTA will need to have its entire budget zero-based if it is truly serious about identifying waste in our tax dollars.
We have identified $5.1 million in waste of your transit tax money in VTA's 2003 Fiscal Year Budget. Given VTA's recent action of reducing service and raising fares on May 2, that waste is clearly money that should have gone into preserving bus and light rail service. When combined with the $16.2 million in waste of your tax dollars that is not mentioned in the VTA's 2003 Fiscal Year Budget, the total amount of waste is $21.3 million! In other words, over 2/3 of VTA's $30.1 million budget deficit is due to spending on consultants, lawyers, and political pet projects instead of better mass transit service.
Clearly, this is your tax money for mass transit that should have been spent on
There needs to be full accountability for your tax dollars that are spent on mass transit in Santa Clara County. If you have not done so already, please contact the VTA Board member(s) for your city and let them know that they need to place your VTA bus and light rail service as first priority.
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