Rewarding Failure

Streetcars that are too wide, long, and heavy (136 @ $3.5 million per). Bus engines that don't fit and are scrapped (20 @ $116,000 a pop). Manhole covers that take 10 engineers and three months to design (cost: $243,000). Muni's management has produced su

* Muni engineers have been less than clever about specifying designs for new electric trolley buses. The first round of buys -- a small fleet of trolleys built by New Flyer Industries Limited of Winnipeg, Canada -- was terminated after Muni discovered "inherent design and performance difficulties with the structure and rear axle assemblies." So Muni went to the Czech Republic and bought buses from the Skoda manufacturing firm. But Muni planners forgot to match the new concrete passenger platforms on Market Street (58 inches tall) to the 55-inch-tall step measurements they gave to Skoda. This seemingly small mistake forced major changes to the trolley frame -- and major expenditures by Muni.

It is not necessary to read through file cabinets full of audits, bid proposals, and consultant invoices to know -- and to know absolutely -- that the Municipal Railway does not work. Muni's inability to keep to schedule has made the agency's name a verb. If one is late in San Francisco, it is often acceptable simply to say, "I was Munied."

The reasons for Muni's continuing ineptitude cannot be called simple, because they have developed over decades, but they are hardly as complicated as Muni's managerial and political leaders claim.

There is a core, day-to-day reason why Muni's buses and rail cars run late 45 percent of the time: The agency's union contracts allow employees to stay away from work in droves. A third of the work force on any given day is absent, and when hundreds of drivers and mechanics don't show up, Muni's trains and buses cannot possibly run on time. Paradoxically, this chronic absenteeism has the effect of generating more than $20 million in yearly overtime payments to drivers and mechanics who fill in for absent co-workers.

As daily operations are currently managed, there is no incentive for Muni to run on time, because Muni workers profit when Muni runs late.

Muni's long-term management problems boil down to a question of accountability. The public record reveals incredibly questionable decisions that have led to amazingly costly errors on a regular basis. Yet, the managers and consultants responsible for those mistakes have not been fired. Rather, their science is arcane enough that their explanations are often simply accepted at face value. Bad decisions and mistakes are continued long after they have become known within the transit agency as boondoggles.

Entire stacks of audits and reports show that Muni's current problems are recycled versions of the same old problems. Mayor Willie Brown and Muni General Manager Emilio Cruz have, by and large, suggested the same old solutions to those problems: more money and more employees.

But Muni already plans on spending nearly $4 billion on capital purchases over the next 20 years, and the agency has some $2 billion in the federal funding pipeline. Muni's operating budget has grown dramatically over the last several years, as has its number of authorized employees. Lack of money is not, actually, at the heart of Muni's long-standing failure.

There are ways to fix Muni. It is possible to negotiate reasonable union work rules that reduce Muni's crippling rate of absenteeism. Muni management can be professionalized, and managers who regularly make illogical, costly decisions can be fired. It is possible to buy quality transit equipment at a reasonable price.

But when employees don't show up to work, and suffer no real consequences, when managers waste millions -- even tens of millions -- of dollars and are not disciplined, when major purchases appear to have been steered to undeserving firms, at some point motivation becomes irrelevant. It doesn't matter, really, whether boondoggles are born of incompetence or something worse. Muni fails because it fails to punish, and even rewards, failure. And Muni will not run well until those who make it run badly begin to be held accountable.

For the San Francisco Municipal Railway to start rewarding success rather than failure, choices would have to be made. Union agreements would need to be changed in ways almost certain to anger union members and their leaders. Top Muni managers -- even and especially those who are members-in-good-standing of San Francisco's Democratic machine -- would have to be judged on performance, rather than politics, and be fired when necessary. Consultants who play major roles in creating boondoggles would have to be let go (rather than recommended for more work). The bad news is that these changes would be politically difficult to make in a city run by a Democratic establishment that has no real political competition and walks arm in arm with admittedly self-interested labor unions.

The good news? The changes wouldn't cost taxpayers a dime.

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