Muni Fail

Federal scrutiny could threaten funding for the Central Subway boondoggle.

Last month, Mayor Gavin Newsom and a dozen bureaucrats, politicians, and other notables grasped gold-painted spades, then simultaneously lifted them and lowered them into the ground as if they were the shoveling equivalent of the Rockettes. They were celebrating the supposed launch of a 1.7-mile, $1.6 billion rail line called the Central Subway, designed to connect SOMA and Chinatown.

But a recent letter from a top Obama administration transportation official obtained by SF Weekly suggests to critics that the ground-breaking ceremony may have been premature. In order for Muni to obtain $942 million in federal funding essential to the project's completion, the Federal Transportation Administration has demanded that San Francisco prove it can come up with an extra $164 million in local and state funds, and — harder still — prove that the subway won't screw up the rest of San Francisco's bus and light-rail network.

The letter orders Muni to prove it will keep the rest of its system shipshape, even as it adds a new subway line with its own maintenance and management costs, slashes millions of dollars from its operating budget, and deploys service cuts sure to depress fare-paying ridership.

David Schonbrunn, a longtime Sausalito-based activist who has sued several area transit agencies based on allegations that projects were wasteful, said the Jan. 7 letter from FTA regional administrator Leslie Rogers to Muni chief Nat Ford was unusually strong.

"I thought it was amazing," Schonbrunn said. "You don't usually see that kind of backbone. We're talking about a project where the speaker of the House of Representatives could possibly have an opinion, and where two senators have an opinion. Ordinarily, that tends to create tremendous inhibition on the part of agencies."

The Central Subway was conceived less as an actual transportation solution than as a sop to long-ago mayoral candidate Willie Brown's Chinatown political supporters. Nancy Pelosi has championed the project, which has so far secured $72 million in federal transit funding. At the end of 2009, the city had spent $51.4 million on design and other Central Subway expenses.

Oakland civil engineer Gerald Cauthen, a former deputy director of the Transbay Joint Powers Authority who was the chief engineer for San Francisco's Muni Transit Improvement Program during the 1980s, said the requirements could threaten the project.

"Muni's in dire straits already," said Cauthen, long an outspoken Central Subway opponent. "Adding this subway operation won't save money. It will incur millions of dollars in additional operating and maintenance costs."

John Funghi, the Central Subway program manager who helped with the ground-breaking event, counters that Rogers' letter is nothing out of the ordinary.

"I don't believe the FTA has an issue with the operating expenses when that comes online," he said. "It's been proven that the Central Subway will enhance the operating capacity and financial picture of the agency."

Funghi said Muni has already calculated the transit system's overall costs, and that "the financial picture with Central Subway in the picture is a bright one. In fact, it will reduce the operating needs of the program, and it will reduce the per-passenger cost for the overall agency."


He may well be right. Perhaps Muni will prove it can remain fiscally sound once the new subway is built. The FTA may merely be going through the motions in advance of sending a project nearly $1 billion in funding, money critics say could be more efficiently spent elsewhere. Obama administration bureaucrats may be playing the role of tough guys, even though the money will eventually come through.

However, the recent demise of the planned Oakland Airport Connector from BART indicates there's a boondoggle-unfriendly wind blowing through the FTA. On Jan. 15, the agency wrote to BART and Metropolitan Transportation Commission brass, suggesting they might be better off scrapping plans for the Oakland Airport link, or the feds might withhold $70 million in stimulus funds. BART indeed shelved the link.

A week earlier, Rogers warned Ford that before receiving a penny of federal funds, San Francisco transit bureaucrats must analyze the city's entire transit system with the goal of proving that the Central Subway won't financially drain it into disrepair. "The plan should use realistic assumptions on growth in revenues and costs that are in line with historical experience," he wrote.

That directive suggests the federal agency won't tolerate accounting flimflam such as that highlighted in a 2006 report by engineering consultant Tom Matoff that concluded the Central Subway project was wasteful, and that its rationale was based on bogus financing and ridership numbers.

Investment in a transportation system "should represent either an opportunity to reduce operating expenses, or represent the most efficient way of bringing better service to additional markets," wrote Matoff, who had been tapped to examine the cost-effectiveness of the project. "As proposed, this project does not appear to do that — it promises to combine high capital costs with high operating costs."

San Francisco presumably took care of that detail by getting Pelosi to secure exemptions in "cost-effectiveness" requirements for federally funded transit projects, thus winning tentative funding. Soon after the report appeared, William Lieberman, the city's transportation planning director who commissioned Matoff's study, was quietly dismissed.

To Schonbrunn, the FTA's halting of the BART-airport link and its call for strong proof that the Central Subway project won't wreck Muni is a watershed moment.

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