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.'"