11/16/2011 03:25 pm ET

Muni Audit Finds Costly Dysfunction Inside Transit Agency

An external audit of Muni released earlier this week had some harsh words for San Francisco's beleaguered transportation agency.

Last year, the Board of Supervisors commissioned Los Angeles-based CGR Management Consultants to prepare a report assessing San Francisco Municipal Transportation Agency's capital programs.

The audit found virtually every one of SFMTA's recent major projects has gone over-budget during construction and, not counting the Central Subway project, those overruns have added some $87 million to the agency's budget. "This is mainly because the planning process is flawed, risk analysis is not performed for most projects, project controls are weak [and] the financial impacts of overruns are not fully analyzed," the report charged.

As with most large-scale infrastructure projects, the majority of overruns came as a result of delays during construction. On average, most projects studied were 475 days behind their scheduled date of completion.

The audit recommended revamping the agency's management structure with an increased focus on streamlining internal decision-making processes and centralizing ownership of each project to a specific team instead of having it spread out diffusely throughout the agency.

"Risk analysis is not performed for most projects," said the report. "Most projects overrun their baseline estimates for budget and schedule. As related in SFMTA documents, time and effort is wasted operating antiquated capital program processes supported by out of date information technology."

With these controls in place, the report estimates that the agency could shave between five and ten percent from its overall capital budget--that's well over half of the $23 million deficit Muni faces this fiscal year.

Implementing these procedures for the construction of the Central Subway is especially crucial, as the project is significantly larger than any other the agency has ever undertaken. The report admits that revamping the organizational structure of this particular endeavor will be difficult because construction of the extension of the T-Third line though to Chinatown is already well underway.

"Some of these findings are very disturbing," said Supervisor David Campos told Streetsblog following a San Francisco County Transportation Authority hearing on report. "We have heard repeatedly how there are limited resources that the MTA has available, but this audit points out...that a big part of the problem is that we're not doing enough with the resources we do have."

The report didn't exclusively paint SFMTA's management mechanisms in an unflattering light. It favorably compared the $1.5 billion Central Subway project to New York City's $4.7 billion 2nd Avenue Subway. The San Francisco project came in at a price tag of only $930 million per mile to the New York project's nearly $1.9 billion per mile.

Last week, SFMTA ventured a number of options as to how the agency will be able to close Muni's projected long-term budget deficit of $1.6 billion over the next two decades. Some of the agency's suggestions included a 25 cent rate hike, charging riders a quarter to use a transfer, making parking fines more expensive, expanding parking meter hours to include evenings and Sundays, installing between 500 and 1,00 new meters, increasing the price for businesses renting out a parking space for a full day, charging businesses a fee for the operation of courtesy parking lots, raising the city sales tax, imposing a parcel tax and increasing the vehicle license fee.

Proving instantly unpopular with the public, the proposed fare hikes were taken off the table almost immediately after being proposed.

SFMTA management said they agreed with the majority of the report's recommendations and will work to implement many of them. The San Francisco Examiner reports:

Ed Reiskin, executive director of the SFMTA, said the agency would probably characterize some of the audit's findings differently, but he added that the report would be helpful.

He said the SFMTA is working hard on increasing the accountability of its capital program by making the costs and scheduling projections of its projects more accurate.