| Santa Clara VTA | Riders Union |
We have analyzed VTA's 2004/2005 Fiscal Year Recommended Budget. This is the second consecutive year we have done something like this. Last year, we found and reported over $20 million in waste of your transit tax dollars by VTA in its 2003 Fiscal Year budget. 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.
As always, 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.
A Microsoft Word version of the report - presented to the VTA's Administration and Finance Committee on May 28 - can be found here.
If we missed anything, do not hesitate to let us know.
Prologue
On April 18, 2002, the Santa Clara VTA Riders Union (SCVTARU) presented some solutions for the Santa Clara Valley Transportation Authority (VTA) to help resolve what we began to see as a budget crisis. (This was one year after VTA enacted a 3% service reduction due to lack of transit operators and mechanics due to the great "dot-com" bubble.) Amongst the ideas we proposed: development fees (similar to what already exists in San Francisco) and fees for parking in county-owned or city-owned parking lots, and use of bonds against 2000 Measure A ("BART Tax") funding. Many of our ideas are in use or have been used by other transit systems throughout the nation to generate transit operations revenue.
According to its 2003 Fiscal Year Budget, 80% of VTA's revenue for transit comes from local sales taxes. About 10% of the revenue comes from the fare box, while the rest comes from various state and local grants. The ongoing recession - now in its third year - has resulted in loss of transit revenue for VTA. It is interesting to note that, in 1995 when the concept of the Santa Clara Valley Transportation Authority was being drafted, plans to supplement the revenue with fees for parking and development were scrapped due to internal politics.
Within a one-year span, VTA had a business review team - led by San Jose Mayor Ron Gonzales - review VTA's business practices as it relates to transit service. In November 2002, that team basically recommended transit riders pay more to use the county's transit system. This despite attempts by SCVTARU to consider our plan over what we felt was a vastly inferior plan put together by the Business Review Team.
In December 2002, VTA formed a financial stability committee - chaired by County Supervisor Don Gage - with the first meeting on January 7, 2003. At the February 19, 2003 meeting of this committee, SCVTARU again presented its ideas to this committee. In May, when the committee gave its final recommendations, many of our ideas were deemed as impractical and were thus rejected. The committee is targeting either another sales tax or an advisory measure for additional revenue for transit operations for November 2004.
Over the last year, the VTA has reduced transit service in Santa Clara County by 14%. VTA has also had a 10% fare increase in that span. Currently, VTA is proposing another 10% fare increase, as well as a 21% further reduction in transit service and reductions in paratransit service, to take effect in August 2003 and October 2003, respectively. Clearly, VTA cannot wait any longer to implement another revenue stream for operating Santa Clara County's bus and light rail system. With the recent opening of additional lanes on Highway 101 in the southern portion of the county and other highway projects under construction, combined with the recent and proposed service reductions and fare increases, VTA has basically told Santa Clara County taxpayers, "Want to get around in Silicon Valley? Get in your car." This philosophy - despite an ongoing economic recession with no end in sight, the ongoing war on terrorism, and the continued instability in the Middle East - will continue to facilitate Silicon Valley's dependence on the automobile for access to employment opportunities, health care, education, and recreation.
This philosophy, in the long run, will hurt Silicon Valley as a region in terms of increased traffic gridlock, longer commute times, more pollution in our air, and a useless mass transit system that is a poor alternative to traffic gridlock. SCVTARU finds it ironic that an area such as Silicon Valley - the technology engine of this country - cannot provide a cost-effective, high quality mass transit alternative to traffic gridlock that makes the region resemble Los Angeles more and more every day. As VTA receives federal funding from the Metropolitan Transportation Commission - recently ordered by a federal court to develop and implement plans to increase transit ridership by 15% by 2006 - it is bound by court order to do whatever is required to ensure the Commission complies with the court order.
Our findings in this document will identify the funding within VTA's 2004 and 2005 Fiscal Year budget needed to prevent what we feel is the destruction of the county's bus and light rail system.
Eugene Bradley
Founder, Santa Clara VTA Riders Union
May 23, 2003
Operating Budget
Page 20 of the VTA's 2004/2005 Fiscal Year Budget details that over 2/3 of VTA's revenue stream comes from local and state sales taxes - down from 80% in the 2003 fiscal year. This is due to an 8.4% decrease in other forms of funding, a 1% decrease in local 1/2-cent sales tax revenue, and a 1% increase in fare box revenue from the 2003 fiscal year. Also, there is a 0.6% increase in federal grants (used for maintaining the county's bus and light rail system) from the previous fiscal year.
On page 26, there is no listing for budgeted position changes by classification. In fact, there is a disclaimer that the information "...will be provided at a later time." This information was included on page 26 of the VTA's 2003 Fiscal Year Recommended Budget. This classification lists the changes in the number of employees at any position at a particular department. Thus, we were unable to determine how many specific employees will be hired or released for this budget.
SCVTARU founder Eugene Bradley contacted the VTA's Fiscal Administration office at (408)321-5630 to obtain this information as well as information on VTA division and pay ranges missing from this year's budget. Mr. Bradley only received the information on VTA employee pay ranges. In a letter mailed to Mr. Bradley on VTA letterhead dated May 20, 2003, VTA's Chief Financial Officer, Scott Buhrer stated that the other information was unavailable with no reason given as to its unavailability.
For ADA Paratransit services on page 28, VTA mentions that the first two (2) phases of its "Paratransit Service Business Practices Improvement Plan" were implemented this fiscal year to reduce costs via actions such as streamlining operations, consolidation of services, and contract renegotiation with vendors. Despite VTA anticipating an 8% increase in paratransit ridership in the 2004 and 2005 fiscal years, VTA is proposing to replace "door-to-door" service with "curb-to-curb" service, and to reduce service to the minimum service level required by the Americans with Disabilities Act (ADA).
Recently, SCVTARU interviewed a former Outreach paratransit driver regarding paratransit issues. The driver, who wished to remain anonymous, told SCVTARU that, in order to serve South County paratransit riders, Outreach vehicles (all of which covered white) must drive at least 25 miles from their garage in San Jose to reach the passenger, drive the passenger to their destination, and return to San Jose. In other words, to take a paratransit rider from Morgan Hill to a destination in San Martin, the Outreach vehicle will have traveled a total of at least 50 miles to take a paratransit passenger for at least three miles. Worse, Outreach paratransit vehicles serving South County cannot obtain gasoline at commercial gas stations - they can only fill up at their garage in San Jose. The former driver revealed that, by not exclusively using Yellow Cabs with wheelchair capabilities based in South County, VTA is wasting $9 million per year.
Division Budgets
In a December 2002 VTA Workshop, VTA General Manager Peter Cipolla and General Counsel Suzanne Gifford deferred salary increases for this fiscal year. However, there is a $151,000 increase in Wages and Salaries, as well as a $211,000 increase in Benefits, for the Office of General Counsel. According to VTA on page 48, the increase in benefits are due to rising health care costs for employees and retirees. As with the Office of the General Manager, specific budgeting by number of positions and salary were not made available to the general public by VTA for reasons they did not disclose, and "will be provided later."
For accessible services on page 51, VTA claims their four-phase "Paratransit Service Business Practices Improvement Plan", budgeted at $31.8 million for this coming fiscal year and $32.7 for the 2005 fiscal year. To implement the rest of the plan, VTA will hire a "Senior Management Analyst" and an Accessible Service Representative at $199,000 per year.
On page 52, it is disclosed that other cost reductions for Paratransit services "will be provided at a later date."
On page 55, VTA states it eliminated two "cost centers" that are for dispatching buses and (re)training bus/light rail operators, to save $869,000 this fiscal year. However, VTA will require ten (10) new light rail operator positions - at $36,150 each - to operate newly expanded light rail service along Capitol Ave. to Alum Rock in the summer of 2004.
On page 59, VTA says that $845,000/year will be needed in the 2005 fiscal year to pay for nine infrastructure support positions for the Tasman East/Capitol light rail extension, due to open in the summer of 2004.
Page 64 mentions that specific cost reductions in the Administrative Services department "will be provided at a later date."
Pages 65-66 discuss the "Silicon Valley Rapid Transit Project." Page 66 still estimates the project at $3.7 billion in 2001 dollars. A report released in March 2003 by a fellow organization, TALC, revealed nearly a $2 billion cost increase with the San Jose BART extension - and groundbreaking on the extension has not started yet. These are cost overruns that the public has not been informed about. That report can be found at http://www.transcoalition.org/reports/tr_inj/tr_inj_home.html.
Pages 68 and 79, where the management tree for the Office and Construction and the Office of Development, state that specific budget by position "will be provided at a later date." The same disclosure is provided on page 83 for Transit Planning and Development, and on page 86 for the Fiscal Resources division. On page 87, details for cost savings for this department "will be provided at a later date."
Capital Budget
Pages 98 and 99 cut the budget for Caltrain station and track improvement projects to $52,230,055 from $125,770,000 in the 2003 Fiscal Year. No formal explanation was given by VTA in the 2004/2005 Fiscal year budget as to why the reduction took place.
Also identified from pages 100-102 were budget increases for the following capital projects from the 2003 fiscal year:
No explanation was given in the VTA's 2004/2005 fiscal year budget as to why the budgets for these projects increased.
Further examination for the budget came in via a post to our email list: "On page 115, the reduced scope of VTA internal capital projects by an oversight committee reduces by $25,000 the purchase of office furniture from an original estimate of $234,000. Also on page 115, the General manager office reconfiguration was reduced by $32,000 from the original estimate of $71,000. And again on page 115, office furniture modification/Reconfiguration FY03 was reduced by $41,000 from $100,000. A total of $307,000 is being wasted on office furniture and reconfiguration.
Again on page 115, the $100,000 for Bus Farebox replacement was eliminated...Page 117 cites $400,000 for LRT Drainage IMPROVEMENTS at Bayshore and Manila.
For the internal operating capital projects, there is no estimate of future cost savings. No benchmark to measure cost effectiveness and savings of the current capital expenditure in future years. An example is the $800,000 expenditure for Electronic Scheduling and Run Cutting Software on page 116.
Conclusion
Overall, we identified $28,566,698 wasted in one form or another by VTA in their 2004/2005 fiscal year budget. The $9 million saved by exclusive use of wheelchair-ready South County-based Yellow Cab service alone can negate the need for a 10% fare hike VTA's Board of Directors will decide at their June 5 meeting - a fare hike that is supposed to save VTA $5 million this fiscal year.
SCVTARU also questions the need to spend $307,000 for office furniture as well as reconfiguration for the Office of the General Manager - particularly in a budget crisis.
SCVTARU also questions why VTA management has failed to seriously consider constructing the San Jose BART extension into phases instead of building the extension all at once. Given BART's long history of a minimum 100% cost overruns, and given the current budget crisis, many more millions can be saved with this method. The saved millions can then be used to restore lost transit service in the near term.
Finally, SCVTARU finds it disturbing that VTA left out critical information such as Budgeted Positions By Division and Classification - Appendix B - in the printed 2004/2005 fiscal year budget. Our founder, Eugene Bradley, had to contact VTA Fiscal Administration to get Appendix A (Classification By Division and Pay Range). That this information was not available to the public during the VTA's public hearings for the 2004/2005 fiscal year budget held earlier in May made those meetings into a total sham. Such action only indicates that VTA has something to hide in terms of more waste in its 2004/2005 fiscal year budget.
With new light rail service coming on line next summer, and with citizens needing transit as an alternative to driving, VTA needs all the revenue it can get its hands on. As the VTA is a government agency beholden to the public trust, to propose a budget where critical information left out of the public eye is to further erode the public trust. The Valley Transportation Authority must show more fiscal responsibility in a budget crisis like this, if it is to gain the public trust needed to pass any form of "bailout" ballot measure.
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