Pin It

Covering Their Tracks: The Central Subway Project Buries Millions in a Deep Dark Place 

Wednesday, Apr 2 2014

LaVonda Atkinson laughs bitterly, shakes her head, and grins. "Your article" — the article you're now reading — "is gonna get me fired."

It is, after all, dangerous to stand in the path of a train. That's especially so in the case of Muni's long-gestating Central Subway project: a $1.6 billion, 1.7-mile extension to Chinatown and eventually, if vocal civic boosters get their way, along to Fisherman's Wharf for millions, if not billions, more. The Central Subway is a transit line. But it's also a monument to the coercive role of politics in the realm of transit planning. It's a pet project of the city's most powerful influence-peddlers, virtually every electable politician, and our federal representatives in Washington, D.C., disseminating largesse back to the home front. Atkinson is the project's cost engineer. It's her job to ensure the numbers add up.

They don't.

Within three weeks of taking the job in July, Atkinson dialed the city's whistle-blower hotline, alleging large-scale accounting discrepancies and unethical behavior. She subsequently sent clandestine messages to the project's federal overseers warning of the same.

You're not going to believe this, but no one cared to join her in front of a train traveling upon tracks slicked with the highest grade of political grease.

And so, last month, she presented SF Weekly with reams of oft-conflicting Central Subway budgets and a trove of internal documents, serving as our Virgil in a descent into the underworld of Muni finances. From month to month, she demonstrates, budgets and expenditures attached to long-completed activities change, or line-items are added and drop out altogether. Budgets have been reverse-engineered such that — conveniently — they now match what was actually expended.

In the real world, work is undertaken and money is spent. But, on a spreadsheet, everything is malleable. As such, a $11.1 million project deficit printed in a December report blossomed into a $450,000 surplus in January and a $1.1 million bulge in February.

These numbers, incidentally, pertain to a phase of the project completed in July. So, that's a pretty neat trick.

Atkinson, the project's cost engineer — the person who ought to know — has no idea what the true budget and expenditures were for any of the hundreds of individual line-items at any given time. These numbers are altered, from report to report, even on activities that wrapped up years ago.

The budget for this massive transit project, she says, is nothing more than a vast game of three-card monte.

While Muni keeps tabs on how much money has been spent, it's far less certain just what that money was spent on. When it's unclear how much was spent on an activity, what was supposed to be spent, and how much work that spending bought, it becomes impossible to answer the overriding question affecting every San Francisco transit-rider and taxpayer: Will this project come in on budget? Or will the city, its transit agency, and its citizens have to cough up millions to fund a looming train wreck?

Aggrieved, would-be Muni passengers are familiar with the agency's ability to transcend the bounds of time and space. Buses and trains' estimated arrival times leap forward and backward — or drop, altogether, off the face of the earth.

Muni can do the same thing with money.

A March 19 email Atkinson sent to fellow members of the Central Subway project controls team nonchalantly reveals a "neg 40M delta" between costs reported to the city and to the Federal Transit Administration. In other words, Muni told the city controller it spent $109.5 million on preliminary engineering for the project — but reported to the FTA that it only spent $69.5 million on that. The $40 million difference was applied toward the project's construction phase. This, Atkinson says, creates the appearance of keeping a svelte budget during the prior phase and having cash on hand during the current one.

But without scouring each and every line-item, Atkinson says it's impossible to know which figure, if either, is truly accurate (in any event, she claims she's been told to stop reporting on this discrepancy).

So, Atkinson, the project's cost engineer — who, again, ought to know — has no idea if Muni's desired appearance matches its reality. Reality is a challenging concept: The agency, she says, has devised a budgetary wormhole to, at least on paper, beam funds backward and forward through time.

Every Central Subway line-item is assigned a "charge code." As far as the controller is concerned, you can tell when the money was spent based on the second of its 17 digits — a "1," "2," or "3" indicates the phase. Many of the activities, naturally, cut across phases. But Muni maintains just the one charge code, beaming the sums through time: "If it appears like you're having a large variance between your plan and your cost," Atkinson says, "You can change how much cost shows up when."

Wouldn't life be easier if you had a time machine? If, years ago, you overspent your budget, you could go back in time and simply change your budget to match what the costs turned out to be. But, Atkinson notes, there's a rub: Muni's time machine is a mere spreadsheet. You can change the numbers on a spreadsheet and make it appear budgets and costs were an exact match. In reality, though, what's done is done.

An overrun delayed is not an overrun denied. The reckoning will come.

It turns out there's a name for this practice: Transit expert and accountant Tom Rubin dubs it "the William Tell school of budgeting." Rubin, the former CFO of AC Transit and the Southern California Rapid Transit District and a longtime Central Subway skeptic, scoured documents supplied to SF Weekly by Atkinson and came away with the following assessment of Muni's financial planning for the massive project: "They fire the arrow at the barn and then draw the bull's-eye around where it hits."

While Muni officials tell SF Weekly that shuttling money between phases was an error, long since corrected, and limited to "earlier reports," documents provided by Atkinson indicate otherwise. Within the January 2014 "Detailed Monthly Expenditure Report," she points to the reassignment of $26.8 million worth of costs within the project's initial phase — which ended in January 2010. The cost engineer says she was tasked to fire up the time machine and move money around among long-completed activities in order to mitigate overruns, with whatever couldn't be swept under the rug beamed to a future phase of the project. That would be a problem for another day.

About The Author

Joe Eskenazi

Joe Eskenazi

Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" is a staff writer and columnist for SF Weekly, which he has written for since 2007. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers... more


Subscribe to this thread:

Add a comment


  • Nevada City and the South Yuba River: A gold country getaway

    Nestled in the green pine-covered hills of the Northern Sierra Nevada is the Gold Rush town of Nevada City. Beautiful Victorian houses line the streets, keeping the old-time charm alive, and a vibrant downtown is home to world-class art, theater and music. The nearby South Yuba River State Park is known for its emerald swimming holes during the summer and radiant leaf colors during autumn. These days the gold panning is more for tourists than prospectors, but the gold miner spirit is still in the air.

    South Yuba River State Park and Swimming Holes:
    The park runs along and below 20 miles of the South Yuba River, offering hiking, mountain biking, gold panning and swimming. The Highway 49 bridge swimming hole is seven-miles northwest of Nevada City where Highway 49 crosses the South Yuba River. Parking is readily available and it is a short, steep hike to a stunning swimming hole beneath a footbridge. For the more intrepid, trails extend along the river with access to secluded swim spots. The Bridgeport swimming hole has calm waters and a sandy beach -- good for families and cookouts -- and is located 14 miles northwest of Nevada City. Be sure to write down directions before heading out, GPS may not be available. Most swimming holes on the South Yuba River are best from July to September, while winter and spring can bring dangerous rapids. Always know the current before jumping in!

    Downtown Nevada City
    The welcoming, walkable downtown of Nevada City is laid back, yet full of life. Start your day at the cozy South Pine Cafe (110 S Pine St.) with a lobster benedict or a spicy Jamaican tofu scramble. Then stroll the streets and stop into the shop Kitkitdizzi (423 Broad St.) for handcrafted goods unique to the region, vintage wears and local art “all with California gold rush swagger,” as stated by owners Carrie Hawthorne and Kira Westly. Surrounded by Gold Rush history, modern gold jewelry is made from locally found nuggets and is found at Utopian Stone Custom Jewelers (301 Broad St.). For a coffee shop with Victorian charm try The Curly Wolf (217 Broad St.), an espresso house and music venue with German pastries and light fare. A perfect way to cool down during the hot summer months can be found at Treats (110 York St.) , an artisan ice cream shop with flavors like pear ginger sorbet or vegan chai coconut. Nightlife is aplenty with music halls, alehouses or dive bars like the Mine Shaft Saloon (222 Broad St.).

    The Willo Steakhouse (16898 State Hwy 49, Nevada City)
    Along Highway 49, just west of Nevada City, is The Willo, a classic roadhouse and bar where you’re welcomed by the smell of steak and a dining room full of locals. In 1947 a Quonset hut (a semi-cylindrical building) was purchased from the US Army and transported to its current location, and opened as a bar, which became popular with lumberjacks and miners. The bar was passed down through the decades and a covered structure was added to enlarge the bar and create a dining area. The original Quonset beams are still visible in the bar and current owners Mike Byrne and Nancy Wilson keep the roadhouse tradition going with carefully aged New York steaks and house made ingredients. Pair your steak or fish with a local wine, such as the Rough and Ready Red, or bring your own for a small corkage fee. Check the website for specials, such as rib-eye on Fridays.

    Outside Inn (575 E Broad St.)
    A 16-room motel a short walk from downtown, each room features a unique décor, such as the Paddlers’ Suite or the Wildflower Room. A friendly staff and an office full of information about local trails, swimming and biking gets you started on your outdoor exploration. Amenities include an outdoor shower, a summer swimming pool and picnic tables and barbeques. Don’t miss the free vegetable cart just outside the motel in the mornings.

    Written and photographed by Beth LaBerge for the SF Weekly.

  • Arcade Fire at Shoreline
    Arcade Fire opened their US tour at Shoreline Amphitheater to a full house who was there in support of their album "Reflector," which was released last fall. Dan Deacon opened the show to a happily surprised early audience and got the crowd actively dancing and warmed up. DEVO was originally on the bill to support Arcade Fire but a kayak accident last week had sidelined lead singer Mark Mothersbaugh and the duration of the west coast leg of the tour. Win Butler did a homage to DEVO by performing Uncontrollable Urge.

Popular Stories

  1. Most Popular Stories
  2. Stories You Missed
  1. Most Popular