State lawmaker wants audit of San Jose-area transit agency

BY SourceMedia | MUNICIPAL | 06/22/22 11:44 AM EDT By Keeley Webster

A Northern California lawmaker is calling for a state audit of the Santa Clara County Valley Transportation Authority.

Assemblymember Marc Berman, D-Menlo Park, and San Jose Vice Mayor Chappie Jones, who chairs the VTA board, want the state to audit the mass transit system?s governance structure, fiscal management, and project planning.

?The state audit will be able to look beyond individual interests to provide a cohesive, apolitical set of recommendations for VTA to use to lead the important conversation of governance reform,? Berman said in statement. ?I am grateful for Vice Mayor Jones? partnership in our shared endeavor to create a transparent, experienced and regionally focused board of directors.?

Created in 1972, VTA operates bus, light rail, and paratransit service in Santa Clara County and is the county's congestion management and transportation planning agency. It?s the primary provider of public transit services in the San Francisco Bay Area?s most populous county with a route network centered on San Jose. It operates 461 buses on approximately 70 routes, and its 42-mile light rail system includes 98 vehicles serving 59 stations.

Ridership, which had been declining for years before the COVID-19 pandemic, dropped to 11.7 million bus and light rail riders in fiscal 2021 from 35 million in 2019, according to its annual comprehensive financial report.

VTA holds AA-plus, AA, and Aa2 ratings from S&P Global Ratings, Fitch Ratings and Moody?s Investors Service. All assign stable outlooks. S&P revised the outlook to stable from negative in May 2021.

"The outlook revision reflects our view of VTA's stabilized underlying creditworthiness as well as the strength of its pledged revenue and correlated debt service coverage on the lien," S&P analyst Alyssa Farrell said when the outlook was revised.

It had $906.4 million in long-term bonds outstanding at the end of fiscal 2021.

The transit agency has $6.3 billion in projects that would be funded by Measure B, a 2016 tax measure that won a court challenge in 2018. The measure would fund the extension of San Francisco Bay Area Rapid Transit to downtown San Jose, a grade separation of the Caltrain regional rail line in Palo Alto, Mountain View and Sunnyvale, and various improvements to streets, highways, expressways and bike routes throughout the county.

The mass transit system has been the subject of three civil grand jury reports, multiple consultants hired by VTA and a 2008 state audit that called for structural reform, Berman said.

VTA?s operating performance has continued to deteriorate over the last 10 years, relative to both its own historical performance and the performance of its peers, across a wide variety of metrics, according to the 2019 Civil Grand Jury Report.

VTA?s own 2021 Board Self-Assessment, which interviewed board members, states that board members felt that ?cities or agencies often select a VTA representative based upon that individual?s interest in higher elected office, and not on their interest in and familiarity with transportation.?

In addition to the board?s governance structure, the 2019 civil grand jury raised questions about the half-billion Eastridge extension project saying it ?makes no financial sense and survives only because powerful forces continue to support it.?

?I have spoken with every member of the board who was willing to meet me ? most of them multiple times,? Berman said. ?Almost all of them acknowledge the significant deficiencies in the current governance structure.?

At the same time, Berman said he has been disappointed by the ?board?s unwillingness to address the real problems, including the lack of transparency in how some members are selected and the revolving door of members that are forced off of the board just as they are starting to understand how VTA works.?

?As chair of VTA, I recognize that this alternative approach is an opportunity to provide the objective information and data needed to propose timely reforms rooted in thorough analysis and evaluation of best practices,? Jones said. ?Like with any other organization, there is always room for improvement.?

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