Goodbye Freddy Boy Video

They are making a video for Fred Gilliam at Capital Metro this week. So that would be the staff there making gushy love love remarks on video about how wonderful Fred Gilliam is. When this agency does stupid, they usually follow it up with at least three or four more stupid things in succession. So these past two weeks it was the Fred Gilliam trip to Disney World for Capital Metro, paid for by us. This week, a sweetheart video and party for this horrible GM. It just goes to show you how totally fucked up CMTA is - fucked to the core, not surface kinda fucked up.

I would hope that this video junk would get published on You Tube soon. I would also hope that the public would crash his goodbye party this week. Details coming soon.

Today's print article from the Chronicle. Yes, it certainly sounds like Gilliam was at least pushed to leave, that comment, "I cannot confirm that" is a read between the lines kinda thing. I think Watson thinks Gilliam is a big boob, but he never says anything too critical. Anyway, goodbye Gilliam, and we wait for the next less than impressive transit stooge, either dumb-ass Doug Allen, or some putz from out of state on the Transit Exec Circuit. Bottom line is do not expect much change there at CMTA, Gerald Daugherty is correct that Rail has caused substantial damage to the organization for decades to come, and the citizens and employees of CMTA will be paying for this mess for a very long time.



HOME: OCTOBER 9, 2009: NEWS
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Gilliam Retires
Cap Metro switches gears
BY LEE NICHOLS



Fred Gilliam
Photo by Lee Nichols

No one was singing "Ding-Dong, the Witch Is Dead" (out loud, anyway), but there was likely a collective sigh of relief among both supporters and critics of Capital Metro last week when CEO and President Fred Gilliam finally announced his retirement, effective Oct. 16.

While those close to the transit authority generally said Gilliam's tenure had its ups and downs, it will likely be most remembered for the downs of its last couple of years: a commuter rail system that still has not debuted long after it was originally scheduled to start, a labor strike, and a financial crisis.

But despite public perception that Gilliam may be jumping from – or was pushed from – a sinking ship, he told the press last Wed­nes­day that his decision was purely financial, not political. "Today is the last day that I can accept" an early retirement package offered by the Cap Metro board of directors earlier this year, said Gilliam, 67. "If I miss the window of opportunity, I will not be able to take advantage of the early retirement. ... If I miss it, it's just like throwing money away."

Asked if local elected officials had pressured him to call it quits – specifically, state Sen. Kirk Watson is rumored to have told Gilliam to leave or be forced out – Gilliam said, "I cannot confirm that." Watson would not confirm it either.

Gilliam added that he would not have retired if the package hadn't been dangled before him. "There's never a good time" to retire, said Gilliam. "This organization ... always has projects going on. You just never come to a good point in life when you're the leader of it that you're going to have that opportunity where you don't have anything to do."

Does he have any regrets? "I wish we had not established an opening date for the rail as quickly as we did," Gilliam said, referring to the original fall 2008 start-up date that has since been pushed back to the first quarter of 2010 at the earliest. "That has created more negative news."

The reaction of board members to Gilliam's retirement was mixed. "I am impressed with Fred Gilliam," said Leander Mayor John Cow­man. "I think what he came into and what he went through to get us to where we are is like night and day. ... The efficiency of the system, the more businesslike atmosphere that we're headed toward – not there yet, but we're headed toward – he's the leader, and he went through hell."

"He did the best he could with what he had to work with," said board chair and Travis County Commissioner Margaret Gomez. She said people should look toward both a failure of Cap Metro to establish sound financial policies early in its existence (it was created in 1985; Gilliam has been CEO since 2002) and unanticipated problems converting freight rail tracks to commuter rail as part of the story. "We can't totally blame him for the mistakes. He is highly respected within the transit industry."

"It's probably best categorized as up and down," said Austin Mayor Pro Tem Mike Mar­tinez, the board's strongest critic of Gilliam. "Fred was brought in to get rail up and running. The first election we lost, the second one we prevailed, but now we're struggling again. We've lost community confidence, and the rail line isn't up and running.

"It's time for a leadership change," he continued. "I think Fred is a good man who has nothing but the best of intentions for his community and for Cap Metro, but we are struggling right now with organization morale, with [finding] a leader that has an organization going in a clear direction."

Predictably, Jay Wyatt, president of Amalgamated Transit Union Local 1091, which represents most of Cap Metro's drivers and mechanics, was less charitable. "I think this place has been pushed down below the ground because of his mismanagement of this place," Wyatt said. "I hope the board will be wise enough to go out and find somebody that knows what they're doing. ... [Not] how [former board chair] Lee Walker hired him. Do a national search to find the best qualified person."

Another perspective comes from longtime Capital Metro critic Gerald Daugherty, the former Travis County commissioner who was voted out of office last November: "It was probably time for Fred to go," Daugherty says. But he puts more of the blame on Walker's push for rail. "Most of the things that have happened the last 10 years have happened on the watch of one person that is no longer there. ... The demise of this organization – and I have said it for a long time – rail will put this entity on an unsustaining path of not being able to do what public transit in Austin needs to do, and that is have a superior bus system where most people can get around."

Outside the board, Watson – who chairs the Capital Area Metropolitan Planning Organization, responsible for regional transportation planning – said Gilliam's retirement "comes at an opportune time" and he hopes that a new board (created from state legislation Watson got passed in the spring) will complement a new manager. Watson said he hopes the board will mainly focus on a new CEO with strong management skills over specific transit experience: "I don't even care if he can spell 'bus,'" said Watson, giving the example of General Motors looking outside its industry for a new CEO.

The name of current executive vice president and Chief Development Officer Doug Allen has been thrown about a lot as Gilliam's possible replacement. Asked if he wanted the job, Allen said, "I'll cross that bridge when I come to it."

"The next CEO – or general manager, which is what it really should be titled – is going to have to come in with a clear understanding that community confidence has to be regained," said Martinez. "A clear, definitive path moving forward, and how we achieve that, the goals and objectives, needs to be laid out."

Link for Capital Metro Contracts Info

You want to browse Capital Metro contracts and how much they spend? Paste this URL in your browser and research whatever you want to know.

http://www.demandstar.com/supplier/bids/agency_inc/bid_list.asp?_RF=1&f=search&mi=159656

Transportation Code that CMTA has dodged since 1990

Hmm. related to the FBI appearance yesterday?:

This rule below from the Texas Transportation Code means that CMTA was required by law to submit services to open and competitive bid that have been operated by Star Tran Inc without competition since 1990. We can hardly measure the massive cost to the community in wasted tax dollars and bad management caused by this failure of CMTA. You might wonder, why would they do this? Well, the fact is that CMTA and Star Tran managers work side by side, and this relationship is too friendly, so that CMTA cannot bring themselves to submit this work to open competition because they know that many of the very highly paid Star Tran managers would be unemployed. So apparently retaining golf buddies and cocktail party friends in the money soaked "public transportation circuit" is more important than either following the rule of law, or respecting tax payer money. And remember, almost $30 million in your federal deficit dollars from the Stimulus Bill are heading toward CMTA right now.

Sec. 452.107. PURCHASES: COMPETITIVE BIDDING. (a) Except as provided by Subsection (c), an authority may not award a contract for construction, services, or property, other than real property, except through the solicitation of competitive sealed bids or proposals, including the reverse auction procedure, ensuring full and open competition.
(b) The authority shall describe in a solicitation each factor to be used to evaluate a bid or proposal and give the factor's relative importance.
(c) The executive committee may authorize the negotiation of a contract without competitive sealed bids or proposals if:
(1) the aggregate amount involved in the contract is $25,000 or less;
(2) the contract is for construction for which not more than one bid or proposal is received;
(3) the contract is for services or property for which there is only one source or for which it is otherwise impracticable to obtain competition;
(4) the contract is to respond to an emergency for which the public exigency does not permit the delay incident to the competitive process;
(5) the contract is for personal or professional services or services for which competitive bidding is precluded by law; or
(6) the contract, without regard to form and which may include bonds, notes, loan agreements, or other obligations, is for the purpose of borrowing money or is a part of a transaction relating to the borrowing of money, including:
(A) a credit support agreement, such as a line or letter of credit or other debt guaranty;(B) a bond, note, debt sale or purchase, trustee, paying agent, remarketing agent, indexing agent, or similar agreement; (C) an agreement with a securities dealer or investment adviser, broker, or underwriter; and (D) any other contract or agreement considered by the executive committee to be appropriate or necessary in support of the authority's financing activities

FBI at Capital Metro

The FBI showed up at Capital Metro today in two vans. They proceeded to look through papers and get statements from people in the Sun Room. They later took boxes and computers. Apparently the local media are under a gag by the FBI

Transit Tyrant - Leaving with his Golden Parachute?

Read post from Chronicle below: We can only hope that this well baked incompetent GM of Capital Metro Fred Gilliam IS really leaving. We can hardly think of any one person who has done more to entirely fuck up everything at Capital Metro more than this used up old guy. Yet, he is still collecting an enormous check every month, and drives a nice Buick on our dime. O and also please recall that he will walk out of CMTA with a 30 year retirement with a monthly income way-way higher than the average working Austin-ite. You are not supposed to figure out that he has been there like 7 years, but walks out with 30 years of retirement. How dumb are we Austin? So far the Board and all over there have duped us pretty darn well.


HOME: SEPTEMBER 25, 2009: NEWS
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Metrorail Watch
How long will we wait for the train?


Capital Metro’s monthly MetroRail progress report lists several accomplishments, such as “relocation of train detection equipment” and “initiated compilation of system integration documentation.” It also mentioned the “vital logic” setback reported a few weeks ago. None of it sounds like major progress. The arm doesn’t move. Off-track: Insistent street buzz says CEO Fred Gilliam is on his way out.

New Posts from Austin Chronicle

Another good article from the Chronicle, giving us more information that the Statesman did in the long articles they present sometime. Again, another reminder that this Board of Directors at CMTA is totally witless and worthless. You would thing that they all would have gotten a drift after the problems that have been found at CMTA Finance this year, and the spending spree on the METRO Red Line. But alas, the Board of Directors sounds as witless and ignorant as ever. They all need a reminder that when they seek re-election in whatever offices they are in we will all be there reminding them with out vote that they are some careless public servants. Wow, more green stamps for Rail spending, and cutting bus services and disabled services. I am not sure you could come across any worse CMTA Board.


From the Austin Chronicle:
HOME: SEPTEMBER 25, 2009: NEWS
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Cap Metro Not Budging on Budget
BY LEE NICHOLS

Monday's public hearing on Capital Metro's proposed FY 2010 budget boiled down to two issues: accessibility for people with disabilities and, to a lesser extent, how to spend federal stimulus money.

Numerous speakers with some form of disability lined up to lambaste the Capital Metro board of directors for the agency's bus stops, which they say are insufficiently accessible to riders in wheelchairs. "Capital Metro, by their own internal surveys by their own staff, have identified that two out of three bus stops continue to have issues with accessibility," David Witte of Adapt of Texas, a disability rights organization, complained to the board. "That's over 2,000 bus stops that have problems. ... Access to the bus stop is not an amenity, it's a necessity.

"The American-Statesman yesterday identified over $40,000 a day being spent on rail projects that are not even running," Witte continued. "If we were spending $40,000 a day for bus stop access improvements ... I wouldn't even be up here talking to you."

On the rail side, representatives of the Downtown Austin Alliance and the Down­­town Austin Neighborhood Assoc­i­a­tion were on hand to vouch for the Lean­der-to-Downtown commuter line. Both oppose shifting $2.6 million in federal stimulus money from rail improvements to regular operating expenses in order to push back a fare increase from January to August.

"We think it's an unwise choice," said the DAA's Tom Stacy, urging that the money be used for the long-term investment of rail. "Currently, in 2007, before the first fare increase [when single-ride fares went from 50 cents to 75 cents], the national average of fare recovery was 17½ percent. After the second phase of the fare increase goes into effect [75 cents to $1], Capital Metro's fare recovery will still be only 8 percent. ... We think it's really important that we not use long-term capital money for a short-term fix for seven months."

Board member and Austin Mayor Pro Tem Mike Martinez said he hears the concerns about the stimulus fund shift but compared it to the Domain subsidies: "What we agreed to was a phased approach, with the second [increase] coming in August of 2010," he said. "For me, our word is our word, whether we make an agreement with a multibillion dollar corporation or with some of the poorest folks in this community."

After the meeting, conversations with some board members indicated that little had been said to move them to request major changes to the budget. Board members said inaccessible stops concerned them, but Martinez said in the current economic climate, there wasn't much more that could be done in this budget cycle. "Let's say, for example, Adapt of Texas goes out and sues. And what if a judge says, 'You have to spend $50 million upgrading your stops tomorrow'? [Then] we're bankrupt. We're shut down. What is the point proven ... if you're going to crush the agency? We're committed to improving those stops, but it's going to be a shared burden moving forward."

Statement of Randall Hume

Here is some typical corporate brainwashing and ass covering from CMTA CFO after being humiliated by the KXAN reporter Nanci Wilson last week. Put your boots on when you read this!


In response to recent media stories regarding the FY2010 budget document, I would like to share the following information with staff:

· In March, Capital Metro began using a revised FY2009 budget. This revised budget was in response to dramatic reductions in the sales tax that Capital Metro receives which provides the greatest part of our funding.

· The budget process used is consistent with the “Best Practices in Public Budgeting” from the Government Finance Officers Association.

· The revised budget numbers reduced operating expenses to meet reduced revenue projections. Capital Metro has operated the remainder of the fiscal year with these reduced budget numbers. The monthly reports provided to the Board of Directors include a budget variance comparison to both the adopted FY2009 budget and the revised FY2009 budget figures.

· The Texas Transportation Code is specific about the budget requirements for transportation authorities. This is the budget section in its entirety:

Sec. 451.102. BUDGET. (a) A board shall adopt an annual operating budget of all major expenditures by type and amount. The board shall adopt the budget before the beginning of the fiscal year to which the budget applies and before the authority may conduct any business in the fiscal year.

(b) The board shall hold a public hearing on a proposed annual operating budget before adopting the budget and shall, at least 14 days before the date of the hearing, make the proposed budget available to the public.

(c) The board after public notice and a hearing may by order amend an annual operating budget.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 451.103. OPERATING EXPENDITURES. An authority may not spend for operations money in excess of the total amount specified for operating expenses in the annual operating budget.



· The Authority is only required to amend the budget if the operating expenses are higher than the adopted budget.

· The projected operating expenses for FY 2009 are well under the expenses in the officially adopted budget so no amendment is required.

· The FY2009 revised budget reduced operating expenses.

· The FY2010 budget document published on September 4, 2009 is a working document. It includes comparisons to the revised FY2009 budget. This illustrates a better comparison between the revised FY2009 budget, the FY2009 forecast based on actual expenses and the FY2010 proposed budget.

· Based on feedback received up to and including the September 21st public hearing, the current FY 2010 budget document maybe adjusted prior to being presented for final adoption at the Board meeting on September 28.

Please feel free to call me if you have further questions.


Thank you for all your efforts to assist us in this very difficult year.



Randy Hume

Executive Vice President, Finance and Administration

Capital Metropolitan Transportation Authority

Austin, TX 78702

Text of Stateman Article

Read the complete text of the article on Rail from the Austin American Stateman on Sunday September 20. Apparently CMTA has finally decided that they do not have clue what they were doing with RAIL. I am also not impressed how both CMTA and the Statesman continue to use fake figures for the Rail costs of $105 million. They used this figure like a year ago, so they want you to think that all the delays and experts and contractors they have brought on are not adding to the costs. Is anyone in Austin really this stupid?


COMMUTER RAIL
Why commuters are still waiting on Cap Metro's train
Transit agency says it didn't realize how daunting a task planning, building and operating a rail line could be.

By Ben Wear
AMERICAN-STATESMAN STAFF
Sunday, September 20, 2009

Capital Metro didn't know what it was getting itself into.

That might sound like a shot from one of the transit agency's critics. Instead, it is in effect the agency's explanation for why its MetroRail commuter line from Leander to downtown Austin is now 15 to 18 months late in opening. And still counting.

Capital Metro, by its own admission, didn't know when it asked voters in 2004 for permission to build the 32-mile line how complex an undertaking it faced, or the full scope of the project, or the work and time required to fix glitches and malfunctions that would arise along the way.

The agency didn't know that:

• It would need a computerized track control system to coordinate train traffic rather than a much simpler approach based on engineers and dispatchers talking on radios. The decision was made in mid-2006 to install that network of trackside signals connected to a central dispatch center.

• Buying components of the track system from two suppliers, to get the lowest bids possible, would lead to communication trouble between the equipment.

• Final installation of the track control equipment would take as long as it did.

• The operation of crossing gates at 65 junctions with roads would be hampered by a variety of factors, among them rain, rusted track and electronic interference in the steel track caused by having multiple intersections in a short interval.

And when it put the project on indefinite hold 16 days before the March 30 opening date — the third launch date — the agency did not know how long it would take to analyze and repair those control systems and crossing gate glitches.

"We had anticipated that as the construction got done and the various systems got installed and turned on, that they would work as intended," said Doug Allen, Capital Metro's executive vice president and chief development officer. "Ultimately, it became obvious that wasn't going to happen."

Lowering expectations

The agency says that if the line were to open soon, about five years after the referendum that authorized it, start of service would still be earlier than for comparable projects. The New Jersey River Line from Camden to Trenton, for instance, was approved by its transit board in November 1996 and opened in March 2004. That 34-mile line, which Capital Metro cited as a model before the 2004 vote, uses diesel-propelled, light-rail-style cars similar to Capital Metro's, shares a line with freight service — and has centralized track control.

Capital Metro officials say the MetroRail project will come in around $105 million, about 17 percent above the original $90 million spending estimate. That final figure, however, does not include the cost of several items closely connected to the project, including a park-and-ride lot built at the Leander station and money spent on "transit-oriented development" near the stations.

The agency is losing about $40,000 in projected fare income every month that the line stays dormant.

"The lesson to be learned is that before we get involved with any future rail activities, we have to be much more deliberate and careful to vet it, to make sure we get good information so we don't have any surprises," said Terry Bray, an Austin lawyer who serves on a transit working group created by state Sen. Kirk Watson and former Austin Mayor Will Wynn in 2007 to review passenger rail proposals.

It remains unclear when the MetroRail line will open. This year, agency executives adopted a policy of making no predictions.

In the latest of what have become monthly status updates, Capital Metro said Thursday that it was developing a timeline for remaining work and would provide another progress report in October.

Capital Metro, responding to the series of problems and at the request of its rail contractor Veolia Transportation, recently began a "hazard analysis/risk assessment," a rigorous last look at the systemthat involves a top-to-bottom examination of the system and its components.

That work, which officials said has already identified about 20 problems, continues. The agency is also working to fix "vital logic" signalization software that failed to trigger the correct track signals when Federal Railroad Administration inspectors tested the line in late August.

Allen said the agency will ask federal regulators to take another look when Capital Metro believes the opening is a month away. But that "final" review could, of course, cause another delay, should regulators find more problems.

"The reason we're here now is, we set some expectations," Allen said of the delay. "And we don't want to (set a new opening date) until we're confident that we're going to be able to open."

Officials with Veolia advised against setting the March 30 opening date. The agency had told voters before the referendum that it could open MetroRail in spring 2008, then later changed that to fall 2008.

Veolia's Austin rail general manager, Gord Ryan, said he told Capital Metro at the time that "what I need is a fully functional railway to train engineers and dispatchers. I also made it very clear that here we have a major freight line (operating on the same track) and we have to construct around it. And you have to expect some of those anomalies are actually going to surface.

"It's the old adage: You don't know what you don't know."

Voting before planning

Capital Metro officials blame the delay in part on a 1997 state law requiring Capital Metro to hold a referendum before building a passenger rail line. It is the only transit agency in Texas with that requirement, although in practice most agencies put bonds before voters to borrow money to build light rail or commuter rail.

The agency says that it did not sufficiently plan the project before the 2004 vote — and then faced time-consuming surprises later — because early planning would have cost $5 million to $10 million. That would have opened the agency to criticism for spending that much money on a project that voters might not authorize, which could have threatened the success of the rail referendum.

Officials could have delayed the vote by two years — the law at that time said Capital Metro rail referendums could occur only in November of even-numbered years — something that agency leaders didn't want to do.

The "agency now has a more comprehensive knowledge regarding costs and scheduling of the project that were not fully known in 2004," the transit authority wrote in a "self-evaluation report" it recently submitted to the Texas Sunset Advisory Commission as part of a legislatively mandated review of Capital Metro. "Had more time and funds been available to adequately analyze various options, certain unknown costs and environmental factors might have been worked out earlier."

Weeks before the scheduled March grand opening celebration, Capital Metro was still completing construction on the last two of the line's nine stations and on siding track in East Austin. Since calling off that opening, it has been fixing a multitude of problems. Among them:

Centralized track control: After the system was installed in early May, the agency discovered problems of various kinds at the 12 control points along the line. Signals, bought from two companies and installed by one contractor, were not communicating properly with the control system at the operations center, built by yet another contractor.

"We didn't realize how daunting and how many issues we had to work through on system integration," Allen said.

That task is not yet complete. The Federal Railroad Administration has been concerned that Capital Metro have fail-safe systems to assure that freight trains, which will run at night on the track between Manor and the Burnet area, don't find their way into the passenger corridor during daylight hours when the commuter trains will be running.

"The system is functioning for the most part very well," said John Almond, Capital Metro's commuter rail project manager, who said he recently rode the entire line and observed no glitches. "Day in and day out, it's not always like that. We want that higher degree of reliability before we put people on that line."

• Crossing gates: For much of the summer, many gates either did not come down when a train approached, came down too slowly or stayed down much longer than necessary.

To combat that, the agency hired equipment to grind rust off the tracks that was corrupting the electronic pulses that activate the gates. It changed the location of "termination shunts" critical to those electronic messages and tinkered with gate equipment and even the rock underlying the tracks to adjust for the electrical conductivity of rain. And it made adjustments for gates that are near stations, such as at Lamar Boulevard, where a train approaching the Crestview station would trigger lowered gates but then stop at the station for 45 seconds or more.

• Missing gates: At federal regulators' behest, the agency in July installed crossing gates at two quarry roads on the Robinson Ranch in Northwest Austin.

• Signal house fire: Faulty wiring caused a signal installation on East Seventh Street to go up in flames in early May. It was replaced by late May.

• Cracked railcar shells: Inspection of the six railcars showed small cracks in the Fiberglas front of the vehicles, which were delivered on schedule less than two years ago and have been undergoing on-track testing for more than a year. Stadler Bussnang, the Swiss manufacturer of the cars, repaired the cracks at its expense, and Capital Metro says now that the work is guaranteed for the life of each of the $6 million cars.

• Damaged track: Capital Metro spent over $200,000 this summer fixing track damaged by years of passing cars and trucks where the line crosses Parmer Lane and the U.S. 183 frontage roads.

• Signal pre-emption: The agency completed work at several crossings that are near traffic lights to make those lights go green and allow waiting vehicles to clear the railroad tracks. This included doing the work twice at MoPac Boulevard, where because of inaccurate engineering plans, the pre-emption equipment was installed on the wrong frontage road.

The Federal Railroad Administration has had six people allocated full time to the Capital Metro project since August 2006, said Rob Castiglione, the deputy regional administrator. In March, in particular, he said, "we did have some extra vigilance to make sure all the loops were closed.

"But they weren't ready for prime time, and here we are."

bwear@statesman.com; 445-3698

Reminder on Accountability

Just want to remind all out there about that A word. We have not seen any of it at Capital Metro. Who do you blame? Who do you write to or complain? Well the Capital Metro Board members.

Once again, stating the obvious what they have done; they ruined the agency, promised the voters a price tag on rail and exceeded it by millions. They have cut bus service and they will continue to cut it for the boutique rail line to the northern burbs. Now they are laying off employees and taking money back from their own people to pay even more for even more rail project delays. How much will Metro Rail really cost? Do you really believe it is $90 million?

The list of Capital Metro Board members is available at Capmetro.org

Reporters

I am waiting for a reporter to print a real story on the actual cost of rail. By this I mean that we need a report that shows the cost of rail from the when CMTA started doing studies and marketing to the present day. If anyone thinks that the root of the financial issues at Metro have much to do with the erosion of the tax revenue I am here to tell you that you have been duped.

Chronicle and Local News Coverage of Cap Metro

Excellent article on the Austin Chronicle today. The Chronicle has entirely taken the lead away from the Statesman on reporting on Capital Metro in Austin. The last editorial / Q and A from The Statesman was - in a word, very odd, sounding like an endorsement of the failed transit king Fred Gilliam and his failed agency.

Ironically, KXAN presented a scathing two night report on Capital Metro in the same week, the best of which showed the Chief Financial Officer Randy Hume stumped and stuttering and flushed when Nanci Wilson challenged him that the reported 2009 budget numbers being used in the 2010 budget proposals were never approved per Texas Law.

But as little actual accountability as we have seen for anyone in the upper management I am pretty sure that Randy and Fred will be there still, entrenched and encircled by a seemingly powerless Board. Anyone as incompetent as these guys in the public sector would have been thrown out months ago.

Reappearing

I am reappearing to give cudos to KXAN for presenting some real tough questions to Cap Metro. Nancy Wilson had the CFO of Cap Metro stuttering and stammering without an answer for why the numbers on the budget to not match up, and why there was not a public hearing on changing the 2009 budget. Now the next step for them is to investigate all the money put into rail.

GM - Golden Parachute Retirement Package

This is really interesting. If you worked 4 years for an employer would you get 35 years credit for retirement? Not likely - unless you are Fred Gilliam - Capital Metro's General Manager, and you sign a "draft" agreement with the only and only Lee Walker. It appears like CMTA thinks it is not even a public agency at all. Of course they have pretty much gotten away with this insular, do what we want way of business for a long time.

Internal CMTA Memo - A Ship Taking on Water

Here is an internal memo of minutes from one the staff meetings open to all CMTA and Star Tran employees. You see Fred likes to straddle the line, Transit Superman, and man of the people. Of course, this is all internal PR bullshit, and it surely massages his ego that people look up at him some kind of fucked up Transit Movie Star when he calls these meetings. The content of this meeting is starting to show that even the run of the mill CMTA worker is not at all persuaded about the agency and its really wierd ways. I especially like it when Fred asks if they prefer wage reductions or layoffs. Someone should have said, " well Fred, I wish that you had not spent every fucking nickle of the $300 million that you had in the bank, bought the most expensive trains on the planet, etc etc. Another fine bit is when the actually disclose that the Austin American Statesman refused to print the OP ED (cover our ass) piece. Major compliments are due to the Statesman Editorial Board for writing concise editorials on CMTA and refusing to print the crap that CMTA is putting out. Another interesting bit here is fishing out "contracting out" issue if the CMTA Board changes. Well, we all know that the Board of CMTA must change, since they have been passive, chair filling idiots who did not ask questions, presided over a massive 5 year spending spree, and had "no idea" about it. Margaret Gomez - what a utterly worthless Chairwoman of the Board -

Read, and see the chaos at work in CMTA and Fred as captain of a titanic ship lost at sea and taking on water

Break Bread with Fred Recap

Here is a brief recap of the Break Bread with Fred held on Monday, March 30, 2009.

Introduction

Fred began with an overview of the current financial situation and explained that recent media stories were not completely accurate. Since 2006, Capital Metro had indicated to the Board of Directors that the reserves would dip below acceptable levels by the year 2010. Decisions were made to move forward on important capital projects such as the rail system, Automatic Vehicle Locator system, facilities, etc. The Board also directed staff to put a moratorium on adjusting service until 2008. No one predicted the slump in sales tax that Capital Metro is dealing with right now, which made the declining reserve situation more immediate. The authority has seen dips in sales tax before. Fred said we’ll get through this and build the reserves back up in a few years.

Randy Hume added that everyone should know Capital Metro is current on all of its financial obligations. An article made it sound like the agency spent well past its means and that’s not true. He said all of our bills have been paid and we continue to watch our cash flow carefully.

Fred also spoke about the delay of MetroRail. Since January, the Board had been kept informed of the possibility that service would not start on March 30. In January, a problem with the rail shunting had been identified that might require additional time to correct. Then a few weeks ago Capital Metro was informed by the Federal Railroad Administration (FRA) and the Texas Department of Transportation (TXDOT) of alleged violations by two of Veolia’s trainers. One of the employees is no longer on the project, and the other served a suspension. The violations must be taken seriously, and Veolia is working with the FRA and TXDOT to address the matter. After learning of more alleged violations a week later, Capital Metro decided to cancel the celebration, even though a delay in service had already been announced. Safety is the biggest priority and Capital Metro would not open service or provide demonstration rides without the guarantee of a safe system.

Capital Metro is working closely with Veolia to refine a plan to start service. Soon, the train engineers will become certified and testing of the rail system will occur at normal operating speeds. The rail department expects to begin pre-revenue testing within the next week.

Setting the Record Straight

An employee asked if there is going to be any attempt to set the record straight in response to the Statesman’s stories. Fred replied that the financial update at the Board meeting addressed several inaccuracies in the media. Information about the agency’s favorable and clean financial audit for last year was posted to the agency’s Web site. A guest editorial was submitted to the Statesman, but they declined to publish it. He said there is some other outreach that staff is doing to keep the public accurately informed, but it will be difficult to overcome the damage that has already been done. A full-page ad was considered, but the agency didn’t think the benefits outweighed the cost of $12,000. The guest editorial is available on the Web site now. The agency is trying its best to mitigate the damage and over time will overcome it. Fred said it’s important that employees know the truth, and he encouraged employees to ask questions.

Early Retirement Option

An employee asked Fred to shed some light on the early retirement packages being offered. Fred said it’s truly an individual decision. People who are considering retirement in the next few years should seriously look at this option and see if it makes sense for them. Capital Metro has staff and resources that can help employees make the best decision for them and their family. Fred explained that it is a cost-saving mechanism for the agency, but that he’s not encouraging everyone to do it. If several people do take it, there will be some critical positions that must be re-filled.

Those concerned about the future of the organization should know that public transit is not going away. During tough economic times many people depend on public transit more than ever. Capital Metro may have to reduce trips where the ridership is low and shift service to meet the demands.

CAMPO Review and Future of StarTran

An employee followed up with a question about how the CAMPO Peer Review recommendations will affect the future of StarTran. Fred responded that the CAMPO recommendations included streamlining the relationship by either unifying all employees as public or contracting all services out; or maintaining the current situation with the goal to improve labor relations. This is a policy decision not a management decision. The board has stated that they don’t like the current arrangement between Capital Metro and StarTran. More than a year ago, the board went in the direction of unifying the workforce as public employees. After the Union said they did not want to be public employees, the board stopped pursuing it. Fred stated that he has not encouraged the Board to go one way or another. If the Board membership changes, they might decide to go in a whole new direction.


May 15 MetroRail Report

An employee asked what is expected to happen between now and May 15 when Capital Metro is supposed to report back to the community on MetroRail. Fred said the May 15th date gives the agency and Veolia adequate time to pinpoint any and all remaining challenges to opening the system and refine the action plan for rail. Capital Metro will work with everyone involved to resolve any outstanding issues. Fred’s goal is to establish a new date after everyone is confident that the system will operate safely. If rail is not already in operation by May 15, Capital Metro will report back to the community with a plan to begin service. He said the agency will not allow the media’s criticism to affect the decision of when to open the system. Once it opens, it will be a system that the agency and the community can be proud of.

Other Cost Saving Actions

An employee asked if other cost-saving measures, such as downsizing departments, are possible. Fred said there have already been several measures implemented, such as a hiring freeze and asking departments to reduce budgets by 15 percent. There are other things being considered, and Finance will continue to look at ways to save money but avoid layoffs.

Fred added that no matter what happens Capital Metro has to make sure it’s not living beyond its means. The best thing employees could do is spend their money locally. A lack of confidence to spend money is the reason for the decline in the economy.

An employee followed up with a question of whether the agency would give priority to salary cuts across the board versus layoffs. Fred replied that he would much rather have salary cuts than layoffs. If that were to occur he said the agency would make sure that everyone fully understands the reasoning and implications behind it, and that the policy is implemented fairly. Fred then asked the attendees what their preference would be, and the consensus in the room was that salary cuts would be preferable to losing one’s job. In 2002, 2003 and 2004, the economy was worse off than it is today. The only difference is that the agency’s reserves were higher. Fred said we weathered that storm then and we’ll get through these times.

Donna Simmons, Human Resources Director, added that employees who have cost-saving ideas should submit them to the Recognizing Resourcefulness (R2) program. Employees who make suggestions that lead to monetary savings for the agency could be rewarded with a percentage of the estimated savings.

Fred closed by thanking everyone for all of their hard work and said it makes a difference to the agency and the community.

Managment Training at CMTA

This image is of management training contracts in the past 18 months or so. You would think that people paid well into the 100K per year would already know how to manage and follow through on goals right? Well in the case of CMTA you would be wrong, totally wrong. AT CMTA they hire consultants to come into and tell them how to manage and what there goals should be, and tell them exactly when they should follow through. Incredible right. Yeah for well above half a million in this list, incredible. On top of this they are financing an entire department of two people just to support this balanced scorecard stuff. Of course those two people are very - very well paid.

CMTA Contract with City of Austin

This is for those writers that think that CMTA might not really owe the City of Austin. When CMTA was reduced from a penny tax to a 3/4 cent tax for some strange reason the comptroller continued to write the checks for the entire penny tax revenue to CMTA. The 1/4 cent difference was to be paid to the City of Austin. Of course as time goes on and CMTA does not pay the debt this amount will continue to rise. This image was included to show that this was not just a conversation about what CMTA might give back to COA, and that is a real contract. In this context it does seem really strange that just a few weeks ago the Statesman reported how CMTA is actively approaching banks for million dollar loans to buy more trains. Ah. "legitimate transit related expenses as they say." Well, more about that soon.

Latest News

Back channel info says that Board Member Mike Manor called for an emergency board meeting this week to discuss the controversy and the organizational instability. Heavy back channel - closed door meetings are being formed between CMTA and other local officials.

CMTA is working on scripting and plotting a crisis management marketing pitch through OP Editorial, the usual spin work they do with the marketing crew there, and whatever other strings they can pull to make you think it is all just fine.

The statesman will obtain documents detailing Rail costs line by line for 5 years. What will they do with it?

Where is Margaret Gomez ?

Margaret Gomez is the "Chairman of the Board of CMTA" - yet not a single word from her. Does this mean she is terrified that she might be held accountable for this mess? Well, they are working on some press release for her I am sure.

EVP Finance Statement and CMTA Board March 23

This is a statement from Randy Hume EVP of Finance and Administration:

"Capital Metro is current on all its financial obligations. We've been forecasting since 2006 that our cash reserves would decrease, and we've spent $299.2 million between 2003-2009 on legitimate capital projects to improve transit services within Capital Metro's service area. The budget challenges we are facing now are similar to other transit authorities, and many transit authorities have had to take more drastic measures than Capital Metro to balance their budgets." (The meeting notes go on to say) -- Randy then highlighted some potential actions Capital Metro might take to make up the difference stressing the desire to avoid layoffs and major cuts to service.

Now it is really apparent that these people:
1) never admit that they did anything wrong
2) assume that the public is really stupid and apathetic
3) smoke lots of crack

Exec Salary List

Here is the entire content of the latest delicious CMTA trashing in the Statesman. Does it seems to anyone else like Mike Martinez is the only person involved in this whole thing who tells the truth and cuts through the crap? Has anyone heard from the other CMTA Board Members? Wow, no totally quiet. I am sure that Brewster is working hard on how he will spin his totally lack of knowledge about anything that happened at CMTA, whereas Mike has already said that he shares responsibility. Brewster is probably talking about how to manipulate that whole thing while he plays golf with Fred Gilliam today. The need a good plan on how to save all those high dollar people, and find some lower pole dupes to literally throw under the bus.

The best part of this is Kirk Watson. Campo had a 'peer review' report done a couple months ago that did not touch on any of this, so now he is all shocked. This shows you again that reports are surface level. Wake up Kirk - you were warned!

CAPITAL METRO
Rail opening on indefinite hold
Further rule violations, system glitches cause delay. Agency accused of making 'scapegoat' of contractor

By Ben Wear
AMERICAN-STATESMAN STAFF
Saturday, March 21, 2009

Capital Metro said Friday that it is indefinitely delaying the opening of its Leander-to-downtown-Austin rail service in the wake of further allegations of federal safety violations and because of continued technical problems.In addition, the transit agency called on Veolia Transportation, its rail operations contractor, to fire its local safety director. Capital Metro is bringing in rail officials from the Massachusetts Bay Transportation Authority, which has a dozen commuter rail lines in the greater Boston area, "to assist with startup operations and safety implementation." Festivities to celebrate the opening that were scheduled for next weekend at all nine rail stations have been canceled. They were to include short demonstration rides for the public. The opening, which has been pushed back several times, now has no target day. "By May 15, Capital Metro will report back to the community with the status of the project and an action plan," an agency news release said.

A week ago, the Federal Railroad Administration began an investigation into a February incident in which two Veolia train engineers drove their MetroRail trains into a section of track without getting proper clearance. According to Capital Metro rail operations director Bill Le Jeune, they realized their error after a third of a mile, stopped, got proper clearance and then moved on. The violations could result in federal and state fines for Veolia. Capital Metro then decided to delay the March 30 rail opening by as much as a month but said opening events set for March 27 and March 28 would proceed. But on Thursday, according to Le Jeune, the railroad administration accused Veolia of seven violations, alleging irregularities related to"efficiency testing" and poor documentation of hearing and vision tests on workers. On Friday, Capital Metro, which is still trying to fix a problem with signal crossing gates that in some cases don't come down quickly enough, applied the brakes to the project.

Those efficiency tests, Le Jeune said, involve testing workers on rules and procedures. Veolia, he said, had not done all required testing. Veolia officials noted that the company is the majority owner of the Massachusetts Bay Commuter Railroad Co., the passenger rail operator for the Boston transit agency that Capital Metro is bringing in to help. "That's ironic because we run that system," said Ron Hartman, executive vice president for rail with Veolia. Veolia's five-year contract there was recently extended three years. Hartman said Veolia disputes the allegation that its efficiency testing was inadequate and will make that case to federal regulators. He said that the hearing and vision tests had been done and that documents supporting that will be filed immediately. Hartman also said that the replacement of the safety director was already under way and that Capital Metro was told that about two weeks ago. Austin City Council Member Mike Martinez, who also serves on the Capital Metro board, has been increasingly critical of the agency in recent weeks. He said Capital Metro officials, citing lost costs for caterers and arrangements for a multitude of volunteers, had resisted his calls over the past week to cancel the opening celebrations next weekend. Martinez said the agency is making a "scapegoat" of Veolia and its safety director.

"Other folks are going to have to accept their responsibility as well," he said. "It really brings into question the competence of the organization." In May 2007, Capital Metro awarded Veolia a $112 million contract to run its freight rail operation and passenger rail through 2013. That included at least $9.4 million annually for the commuter rail line, not including fuel, which Capital Metro will pay for separately. Veolia, a French company that also provides drivers and mechanics for a dozen or more Capital Metro bus routes, began working with Le Jeune and other agency officials on the emerging passenger rail operation. It has hired about a dozen engineers and a dozen dispatchers. But on-track training, which was expected to begin in early January, was delayed about six weeks because Capital Metro did not have the track control system ready. At that point, with further testing under way, the crossing signal problem emerged. At several points along the line, Le Jeune said, trains have to slow to 15 mph at intersections to give signal arms enough time to lower.

State Sen. Kirk Watson, D-Austin, has filed legislation that would revamp the Capital Metro board. "I continue to be disappointed in what seems like a weekly drip, drip, drip out of Capital Metro," he said. "I worry that (the bill) doesn't go far enough." Watson said he is considering a requirement that Capital Metro undergo "a top-to-bottom analysis and justification of approaches, policies and actions," with recommendations for improvement."We need," Watson said, "an effective, functioning transit agency in Central Texas."

bwear@statesman.com, 445-3698

CMTA Rail Costs - WOW

The comprehensive list of rail costs. The total here does not include expenses for freight rail - that information is provided for information purposes only. This is the closest to an actual total anyone has ever seen, and this still excludes some ancillary contracts, and now that the FRA has delayed the entire operation the costs are only going to increase. Everyone that reads this needs to remember that this rail project was sold to the voters as a "cheap" $90 million dollar project. And by the way, Capital Metro darn well knows that they have spent more than the 105 or 115 million that they almost copped to spending on rail in the Statesman a couple weeks ago. Actually, while the past week has show the American Statesman with more guts than it has shown for several years they have also shown no aggressive interest in uncovering the exact and full cost of rail. It seems like this kinda of work falls to people that are capable of getting the information that is not handed out like the spoon fed candy that CMTA wants to have reported

Has anyone heard from Kirk Watson???

Gee, this guy sure did get quiet since all this Capital Metro ugliness started. The first plan was re-organizing the Board of Directors. As I stated before, that is a nice idea, but obviously based on the recent revelation the issues at CMTA are deeper management problems as well.

One Capital Metro Consultant Report Equals How Many City of Austin Firemen?

Here is just one sample, of many to come, that show how Cap Metro can drop a quarter million dollars like loosing a penny is the wash. This report image attached was approved and initiated in November of 2007 and the report has never been seen yet. We are now almost 18 months later and it is still "not complete" according to Capital Metro. The usual drill at Cap Met is to keep reports in the "draft" phase as long as possible so that are not subject to open records law, and during these long periods of time Cap Met staff works with the report authors to make sure it does not say anything that they do not want it to say. O, they would never do that -- would they?

Also note that Cap Met has paid a full time facilities project manager about $90,000 a year since the start of this project. O, and the answer the the question of how many fireman is about 5. Hmmm, I wonder what the better deal is, people that save our lives, or a 600 page paper weight that no one will ever read?

The enormous costs of outside legal at CMTA

Just a look at the enormous amount and variety of outside legal services at Cap Metro

Statesman on CMTA Spending out of Control

The Statesman has finally written a truly critical and well stated article that fully details how CMTA management has run out of control for years. To sum up all the details in the article, CMTA overspent more than the 3/4 cent tax revenue for years and also spent all of the $50 million that they owed the City of Austin. Oh, yeah, the City of Austin kinda needs that money since they are in a budget crisis.

Remember as you read it that CMTA never - ever accepts any responsibility or admits that they made a mistake. Whenever anything negative comes up they put their hands in the pocket and sort slouch and go, 'well, I don't know what happened'. This is how Fred Gilliam comes off with a really lame reply about how they spent all the money!

CAPITAL METRO
Capital Metro spent millions but still owes Austin
Transit agency, with reserves depleted after spending blitz, owes city tens of millions.

By Ben Wear
AMERICAN-STATESMAN STAFF
Sunday, March 15, 2009

During a six-year, $300 million blitz of capital spending, Capital Metro used money promised to the City of Austin and other local governments to help pay for passenger rail, park-and-ride lots, freight rail improvements, a $42 million bus-and-train facility, information technology, a child care center and other projects.

The transit agency, which as recently as 2002 had more than $200 million in the bank, now has little savings beyond a standard two-month cushion for operating costs and a self-insurance reserve. It owes Austin and other governments in the agency's jurisdiction between $85 million and $110 million, most of it the balance on a $200 million promise made in 2000 and 2001 to stifle public calls for a lower sales tax rate.

"We kept the liability, but we didn't keep the cash," said Capital Metro Chief Financial Officer Randy Hume, who joined the agency in 2007. "We did spend it, and now we have the obligation. We still owe them what we promised them."

The depleted reserves, coupled with the city obligation, other debt and ebbing sales tax revenue, have already led the agency to cut costs by hiring outside contractors to drive and maintain buses for more routes. In addition, the financial situation led the agency to freeze most hiring and cut spending in agency departments 15 percent this year and probably contributed to the labor standoff last fall that ended with a three-day strike, according to at least one board member.

The crunch hamstrings the agency's ability to execute the ambitious dreams that Capital Metro and other transit advocates have laid out in recent years, including rail lines to Elgin and Pflugerville, downtown streetcars and a 133-mile "rapid bus" system.

Even current bus service is threatened. In a recent briefing, the agency's chief financial office said Capital Metro will have to re-evaluate "redundant trips related to rail service" and "very low productive (bus) trips."

City of Austin officials, facing their own financial squeeze, say dozens of city projects depend on getting that promised Capital Metro money.

Fred Gilliam, Capital Metro's president and chief executive officer since April 2002, said the rapid drawdown of reserves was no accident. The agency had needs, including passenger rail authorized by voters in a 2004 referendum, and it had money. And politically, the cash stash was something of a problem.

"Everyone in town thought we were rich, and they were coming after it," Gilliam said. "So the sooner we spent it down, the criticism quieted down."

Lee Walker, chairman of the Capital Metro board from 1997 until May, worked closely with Gilliam and Capital Metro's staff on the agency's long-term financial picture. He did not return calls and e-mails seeking comment for this story.

The strategy of spending money obligated to the City of Austin and the other governments, though in progress for several years, was never explained to the public, and several members of the Capital Metro board said it was not clear to them.

"I've been operating under the assumption that these (capital) items were annually budgeted within the sales tax revenue that was coming to Capital Metro and not being drawn down from cash reserves," said board member Mike Martinez, also an Austin City Council member. "Spending money that you don't have is not acting very responsibly."

The annual budgets approved by the board each September, though showing levels of "designated reserves" falling in recent years, present the overall picture in terms of "net assets" that have tended to remain relatively stable in the $300 million to $350 million range.

The all-volunteer board includes five elected officials whose primary responsibilities lie with the jurisdictions that elected them and by and large leaves the day-to-day operations to paid staffers.

Travis County Commissioner Margaret Gómez, a board member since 1997 and now chairwoman, and Austin City Council Member Lee Leffingwell, who served on the board in 2006 and 2007, said they were unaware of the ebbing reserves and significant remaining obligation to the city.

The agency's accounting, showing reserves as "all just one big pot of money, with no set-asides," Leffingwell said, "made it look like they had a whole lot of money when they really didn't."

Gilliam said board members were kept informed about the agency's overall financial situation.

"There was no secret that the money was running out," he said. "Every board member, when they come on board, we give them a briefing on these things. Whether they retain it, I don't know."

Martinez acknowledged that ultimately the buck, or in this case several hundred million bucks, stops with the board.

"I can't blame any one individual," he said. "It's the board's responsibility. It's my responsibility."

Capital Metro officials, while saying they've known for about three years that available reserves were headed to near zero, also said the overall impact of various spending decisions was not always obvious — even to the agency.

Doug Allen, the executive vice president and chief development officer who has been with Capital Metro for a year, said that although the agency had a good handle on spending for its commuter rail project, oversight of capital spending overall was flawed and the "burn rate" of the agency's reserves occurred faster than expected.

"Processes should have been in place to better track what those other capital expenditures were," said Allen, who said that agency leaders have better command of finances now.

The rash of capital improvements and the resulting cash crunch have put Capital Metro in the position of having to borrow money for needs both past and projected.

It owes about $29.5 million ($4.2 million annually for seven more years) for the six rail cars it ordered from a Swiss manufacturer three years ago, and it would have to spend (and probably borrow) a comparable amount for a second batch of six cars if it wants to expand service. And agency officials are embarking on a seven- or eight-year program to replace 270 buses, about two-thirds of the fleet.

They say that although some of the $26 million they expect to get through the federal stimulus program could be spent on buses, they'll have to borrow much of the $100 million-plus cost of those buses.

That is a marked departure from past agency practice, which typically has involved buying buses without borrowing using a combination of federal grants and local money. The agency anticipates that such loans for buses, which have a useful life of about a dozen years, would have to be paid back over seven to 10 years.

That debt, along with the periodic payments for what is still owed to the City of Austin and other governments in Capital Metro's jurisdiction (among them Leander, Manor and Volente), would constitute an ongoing drain on what is available for day-to-day operations.

The 2008-09 operating budget is $186.7 million, although actual spending probably will be several million dollars lower because of falling diesel fuel costs.

Those future obligations may have influenced agency decisions to double fares by late 2010, hire cheaper outside contractors to handle some bus routes and cut back on Dillo service downtown.

Did the disappearing reserves spark the hard line Capital Metro took last year in negotiations with its union workers? No, Allen said. "We're really scrubbing our budget because of those issues," Allen said, but he said the reserves and the agency's labor stance are unrelated.

"It was an independent issue," Allen said. "Just being good, prudent stewards of the public money."

Martinez scoffed at that interpretation. Capital Metro, he noted, gets its money for both capital and operations from the same sources: sales taxes, fares and federal transportation grants. Spending on capital, he said, inevitably means there's less money available to pay employees.

"It's directly related," Martinez said.

Building up reserves

The buildup in Capital Metro reserves began in earnest in 1995, when the agency board decided — on short notice and to instant derision from critics — to raise its sales tax from three-fourths of 1 percent to a full 1 percent, the maximum allowed under state law. By September 2000, when the board announced a November light rail election, the reserves had reached $176 million, money mostly intended for the $1.9 billion proposed system.

But voters said no to rail that November, though barely. Calls were instant for the sales tax to go back down to 0.75 percent, if not lower, potentially freeing that money for other Austin-area transportation needs.

The Capital Metro board acted quickly to head that off, voting in December 2000 to give away revenue from a quarter percent of its sales tax that year to Austin and the other partner governments. The city has used the money for, among other things, toll road right-of-way purchases, intersection upgrades, bicycle projects and Cesar Chavez Street beautification. That quarter-cent commitment was later extended for three more years, which in the end amounted to $113.5 million.

But that still left the money that had built up by 2000. So in February 2001, the board passed a resolution making "a strong and proactive commitment of $91 million for regional mobility," a bequest that would leave the agency with about half of the money that it had banked. Of that $91 million, $47 million was to go to the City of Austin over the next 12 years, and $20 million was to go to the existing Build Greater Austin program (which would also go to the city).

The other $24 million was left unallocated, subject to future agreements with the city. All of this was formalized in an "interlocal agreement" signed in June 2001 between the city and Capital Metro, which does not mention the $24 million.

As of Sept. 30, Capital Metro still owed at least $85.1 million. Regarding that other $24 million, however, Capital Metro's position now is that perhaps it wasn't as "strong and proactive" a commitment as the board resolution indicates.

"It was viewed as a contingency," Allen said. "Our commitment is what's in the (2001) interlocal agreement."

Leffingwell took issue with that assertion. "Seems like the other party (the city) might have something to say about that," he said.

No matter the total figure, $85 million or almost $110 million, Capital Metro no longer has that cash on hand to give to the city. This comes just as Austin, according to budget director Greg Canally, is gearing up to spend much of the remaining quarter-cent commitment from Capital Metro on dozens of projects: extension of the Pfluger pedestrian bridge, improvements at six major intersections, an overhaul of East Seventh Street and bicycle projects across the city, among others.

The Capital Metro staff has "never said 'we want out of our obligation,' " Canally said. "Because then the (city) projects would go away."

But the transit agency, to avoid having to pay huge slugs of money to the city over the next two or three years, might work out some sort of drawn-out payment schedule to blunt the year-to-year impact, officials say.

Facing a cash crunch

Capital Metro's condition comes at a bad time for the agency, with sales tax receipts, which make up about 70 percent of its revenue, falling well below projections this fiscal year. Bus ridership, meanwhile, has been dipping after an increase last year when gas prices mushroomed, and the full force of passenger rail operating costs are about to hit. The 32-mile Red Line between Leander and downtown Austin is now scheduled to open in April.

Now the agency faces an ongoing cash crunch, with what amounts to significant debt, new and growing needs and no financial safety net.

"Is it an ideal situation? No," Gilliam said. "Would I prefer it be different? Yes."

Longtime Capital Metro critic Jim Skaggs, who retired as president and chairman of the high-tech company Tracor Inc., said there's enough blame to go around.

"The staff was inadequate in presenting the financial picture," said Skaggs, who has studied the inner workings of Capital Metro for a decade. "And ... the board was inexperienced in knowing what questions to ask. The two sides together are very dangerous."

Former Austin City Council Member Betty Dunkerley, who before her council days was the city's chief financial officer, studied the agency's operations and accounting over the past couple of years while heading a peer review of Capital Metro. She said that the agency, unlike the City of Austin, did not designate reserve accounts for any purpose in its accounting system, including for an operations cushion.

In that situation, Dunkerley said, she could see the money owed to the city taking a back seat to capital projects such as the $41.9 million North Operations and Maintenance Facility, the $13.9 million spent on the Tech Ridge park-and-ride lot or the $41.8 million spent on the agency's chronically money-losing freight rail operation.

"What I would criticize them for, and I've told them directly, they really need to continue to work toward making their financial information clearer and more understandable by the general public," Dunkerley said. "So that when decisions get made, you can't come back and say, 'I didn't understand it.'"

Fairy Tale Contracting at Capital Metro in Austin

To resolve conflicts between federal law that protected bargaining rights, and Texas law that forbids public entities from engaging in collective bargaining Capital Metro created a legally separate entity called Star Tran Inc. This is essentially a sham organization that does not have its own money, or offices, or any property whatsoever.

What Star Tran does have is some extremely well paid Directors that alternate between being their own kings in pretend Star Tran board meetings, and then acting like puppets at the whim and fancies of the GM and executives of Capital Metro. As any common sense person can see there are lots of problems with this, like no one is sure who is in charge of what or why, and there is replication of very high paid positions etc. It also happens to violate Texas Code about competitive bidding for contracts with public entities, and yes, Capital Metro is surely a public entity, actually a political subdivision of the State of Texas. (Although Capital Metro likes to pretend that not only are they above State Law but Federal Laws as well when it comes to the Occupational Health and Safety Administration. But we will get to that later.)

More to come about how CMTA has failed to follow regulations for competitive bidding and performance based contracting since 1990, and we will track just how pathetically this arrangement has worked out for the past two decades.

Expect Huge Expenditures in Public Transit - Are you Watching?

Transit authorities are about drooling at the idea of a huge tide of federal dollars coming from the Stimulus Package. We can expect these public entities to be expanding the existing projects they have, and to start new ones to get the money. What is important is that these agencies are not really being watched. Yes they are required to have regular audits and they have reviews by the FTA. But you would be shocked at what audits miss, in many cases, unless the fraud is totally blatant auditors will never see it. Additionally, auditors are not looking examining these entities for good management or efficient management, if they were they would have to look really hard in some cases. As for the FTA, we are talking about the Federal Transit Administration, and if you remember the overpriced toilet seats and overpriced bolts scandals, well, pretty much the same people are in charge of being "watch-dogs" over public transit. Yes, make your own conclusions, but the notion that the federal government has been capable or trustworthy in watching itself is ridiculous to most common sense people. This stated, the responsibility of watching the use of our dollars in transportation and city expenses falls to us. If you are trusting your public servants and managers in these institutions you are mistaken.

Senator Kirk Watson Proposes a Good Idea for Overhaul of CMTA

Read below from the Austin Statesman how ally and best friend Kirk Watson in the legislature is doing his best to change regulations and possibly the entire structure of Capital Metro in Austin. Well, this is the time to do it, but let's not engage in half measures here. Capital Metro has been it's own weird, overpriced and most privileged part of the city for a very long time. The executives have spent money hand over fist, brought in consultants to tell them what to do and how to manage, and always pretty much had green stamps from the Board of Directors, who often seem like they are not really sure how much money they have approved to be spent on what. Kirk Watson has the right idea, but it does not go far enough. Read below

Watson proposes Cap Metro changes. Board would be overhauled, rail vote requirements eased.

The Capital Metro board would be overhauled and the requirement for public rail votes eased slightly under a proposal released Sunday by state Sen. Kirk Watson.

The Austin Democrat, after giving the Capital Metro board and various other local officials a week or so to review and comment on what he has in mind, probably will file legislation to make the changes. Capital Metro, like all transit authorities in the state, was created through state law and is governed by requirements set by legislators in the transportation code.

The current board's makeup was set by state law in 1997, when, as Watson puts it in his Feb. 18 letter to the board and other key officials, the agency "was a disgrace to our community." Watson became Austin's mayor just as the Legislature was making that change. The all-volunteer board of the time was replaced by one with two Austin City Council members, one Travis County commissioner, one suburban mayor, a Williamson County elected official and two citizen members appointed by the Capital Area Metropolitan Planning Organization board.

Watson proposes to have three members appointed by CAMPO, including one elected official, one person with at least 10 years of "financial/accounting experience," and one person with at least a decade of "professional staff executive experience" in the public or private sector.

Two of the three CAMPO appointees would have to be Austin residents. The other four members would be joint appointees of: The City of Austin and Williamson County. The City of Austin and Travis County. The City of Austin and Hays County. The small cities within Capital Metro's jurisdiction. The four joint appointees, under Watson's proposal, don't have to include elected officials. That means the board might have only one elected official.

Capital Metro's service area includes Austin (which provides more than 90 percent of the agency's sales tax revenue and the bulk of its customers), Manor, Leander, a handful of other small suburban cities and parts of unincorporated Travis and Williamson counties. The board could be enlarged, Watson proposes, if there comes a time when at least 35 percent of the Capital Metro service area population comes from outside Austin.

Watson also wants to do away with a requirement that all fare increases go before a "local government advisory committee" of elected officials. Instead, he would have fare increases approved by the Capital Metro board but subject to what would amount to a veto by the CAMPO board. If CAMPO were to leave a fare increase unaddressed for 60 days, it would go into effect.

Finally, Watson, whose proposal arose mainly from a CAMPO "peer review" of Capital Metro completed last fall, would amend the requirement in state law that Capital Metro get voter approval for all expansions of its rail system.

Watson would allow Capital Metro to expand a line by up to one mile without a referendum. Similarly, if another entity (such as the City of Austin) paid to build a line and then hired Capital Metro to operate it, no public vote would be necessary. However, if Capital Metro — which opens its first passenger line, between downtown Austin and Leander, next month — were to build another line with its own funds, a referendum would be necessary under the Watson proposal.

We Need More Trains -- And Money

In the article below Ben Wear of Austin American Statesman newspaper talks about the likelihood that almost immediately Capital Metro in Austin Texas will be taking out loans to buy more trains. Oh yeah, where do you think they will get the money to pay back those loans, well from sales tax revenues. Well, those sales tax revenues are significantly down in the first quarter of this fiscal year. This is a terrific example of the 'we got our foot in the door and we can keep on spending'. So as stated below, CMTA plans to go into either 35 or 70 million dollars of debt, while the success of Metro Rail is questionable, and while the economy is in recession. Expect CMTA to come to the public in coming years complaining about being "in the red" and having to cut core services and possibly lay off workers. I do not know about you, but this sounds like a really dumb plan. Then again, it is also possible that many transit agencies like CMTA are salivating at the idea of that cash infusion from the Obama Stimulus Plan. I think we can expect for large amount of federal cash tagged for transit to vanish into the suction of projects that are various kinds of runaway trains.

From Ben Wear:

"I wrote a column in July about a problem Capital Metro's passenger rail service might have when it opens March 30: popularity.

Or, more to the point, capacity. To keep costs down when it put the rail project before voters in 2004, Capital Metro decided to buy just six self-propelled rail cars for initial service on the 32-mile commuter rail line between Leander and downtown Austin. With a ration of spare parts, that purchase from Swiss railcar manufacturer Stadler set Capital Metro back about $38 million. Capital Metro had to borrow the money from Bank of America.

The problem is that the cars have just 108 seats, with room for another 92 people to stand. And it will take close to two hours for a car to leave from Leander during rush hour, get to downtown near the Hilton Austin hotel and return to Leander. In practice, that means that the five cars (one will be held in reserve) might be able to make only seven runs between 6 a.m. and 9 a.m., with 30-minute intervals between departures. That would be 1,400 passengers max, with the last car not getting downtown until close to 10 a.m.

Last summer, when gas was $4 a gallon and new people were flocking to Capital Metro's express commuter buses, it seemed reasonable to assume that some Red Line trains might fill up in the first two or three stops, leaving steamed customers behind at stations closer to downtown. Maybe that will still be the case, even with the current dirt-cheap gas prices. We'll know in April or May.

With that in mind, Capital Metro staff members say they probably will go before the transit agency board in February for approval to buy six more cars, or perhaps 12. But Capital Metro doesn't have $35 million sitting around (its contract lowers the price for further orders), much less $70 million. So it will have to borrow again.

The credit markets, of course, have been less than robust lately. And Bank of America in particular has had troubles, asking Uncle Sam for an additional $20 billion in bailout funds after $25 billion didn't right the ship.

Randy Hume, Capital Metro's vice president for finance, said last week that the agency was talking to Bank of America to try to nail down the additional loan. The current one costs the agency $4.3 million a year for 10 years. Even though the interest rate might be higher this time — up to 5 percent, rather than 3.7 percent as in the initial loan — Hume said the payments could be lower because Capital Metro could choose to get a 15-year term.

Hume said the agency won't order more cars until financing is secure."We're not there yet," he said. And even if Capital Metro makes the order by March 1, Stadler said it would be two years before the first car arrives, with about four weeks more for each car to follow. And the agency has to test each car here for 1,000 hours or more, a process that takes several months.

Bottom line, don't look for extra capacity on the Red Line until late 2011 or early 2012."

Runaway Train

Capital Metro Rail is about to begin operation in 30 some odd days. In the interest of examining how they are really spending the public dollars we are gathering documents to give the accurate information. Everyone needs to remember that this project was approved by the voters at $90 million. I have heard too often lately the rationalizations about how often these public projects run over budget, and it appears that the effort of these statements is to persuade and wear down the public so that we simply shrug our shoulders and say to ourselves; "well, they say that things always cost more than they planned on" or, "they say that they made it better with that extra money" etc etc. Well, that is not good enough.

The public is really supposed to say to these entities, look- we approved the costs at "x" and four years later you have changed the number, knowing that you are so far into this project that we have to let you finish it. This is the shell game of how public infrastructure projects always run over cost, they know from the start that it will cost much more, so all they really want is the voters approval that they can start the project, and once they have that they know that they are locked in to spend more to get it done. Considering the Stimulus Bill that was just signed by President Obama will infuse lots of cash into transit systems across the country these are not small concerns.

In the next few weeks we will be presenting the information in detail about how much the Austin CMTA Commuter Rail Project is really costing, and will cost in the future. You can expect the CMTA marketing and public relations staff (and consultants - they love consultants) to be working overtime spinning the numbers in the media.

According to this article from Ben Wear in the Austin American Statesman CMTA is if financial wows. What a minute, is that what this article says, I am not sure. You read it and decide. In any case at the same time CMTA was seeing the revenues fall they were throwing money out like it was Christmas on rail, consultants, marketing and lots of nonsense that had nothing to do with its core services. Lets just watch the next few months what "watching costs" means for CMTA. I predict that it means they will be spending more millions on rail, and questionable hired advisors.

Capital Metro, like the rest of America, had a bad fall.

Falling sales tax receipts, falling ridership, falling fare revenue. Fortunately, as a business that uses a lot of fuel, the transit agency also saw sharply falling diesel costs. The result, at least for now, is that the agency expects no layoffs or reduced bus service.

Capital Metro, which depends on its 1 percent sales taxes for about 70 percent of its income, has seen tax revenues that were lower than the same time last year for three straight months. The tax revenue for the first quarter of its fiscal year was 4.3 percent below the same period a year earlier.

Meanwhile, ridership on the agency's regular "fixed route" buses — after a spring and summer gasoline price spike had the effect of packing many rush hour buses — was off 6.6 percent in December from the same month a year earlier, as gas prices below $2 a gallon sent folks back to their cars. November ridership, when there was a three-day strike, was 15 percent below November 2007.

Fare revenue, although well above last year's because of a 50 percent price increase in October, will be about 7 percent below budget predictions under the current trend.

The agency had predicted sales taxes would increase 3 percent in the fiscal year that began Oct. 1. Now the agency expects about $16.4 million less in overall revenue than it predicted in September. At the same time, Capital Metro is predicting that diesel fuel costs will be $9.4 million below budget, or about 41 percent. The agency is paying about $1.50 a gallon for diesel rather than the $3.60 a gallon predicted in its budget.

"The fuel is saving us, big-time," Chief Financial Officer Randy Hume said Wednesday.

The net effect is that Capital Metro expects to have about $31.4 million left after operating costs, rather than the $37.5 million predicted in the budget. That would be enough to cover the $28.8 million in capital projects the agency board approved in the budget.

Hume said the agency has put off some capital spending — replacing a parking lot at headquarters, some computer projects, consulting expenses — and is otherwise watching costs. The current budget had projected adding nine full-time positions this year.