No doubt the anti-rail folks were disappointed to read the report issued today summarizing the independent performance audit of Sound Transit… though that won’t stop them (or bumper sticker writers like Rick Anderson) from attempting to turn an overwhelmingly positive audit into a PR disaster.
Writing at the Daily Weekly (does anybody actually read the Weekly’s blogs if real bloggers like me don’t link to them?) Anderson characterizes the report as “stinging,” before cutting and pasting a list of bullet points under the headline “New Audit: ST Wasted $5 Mil“. By comparison, Mike Lindblom of the Times (bless their hearts) instantly cuts through the crap:
Though significant, that’s a fraction of the project’s overall budget of $2.4 billion, and Sound Transit maintains the losses are actually lower.
Sound Transit may have “wasted” as much as 0.2% of its budget… not exactly the “Big Dig” scenario critics keep warning about. To put that $5 million in perspective, one of the auditor’s primary recommendations is, surprise, annual performance audits — at a YOE cost of nearly $50 million over 50 years! ($500,000 per audit, 2.5% inflation.) And for some reason, Anderson fails to include in his bullet points the approximately $6.5 million the audit says Sound Transit saved during preliminary ST2 design through its “value engineering studies.” Huh.
Whatever. Here is the audit’s actual conclusion, as summarized at the top of the report:
Sound Transit has faced, and continues to face, challenges in delivering capital construction contracts for the Link Light Rail Project. Through the course of initially planning, designing, and building the system, the agency experienced delays and cost overruns.
Before 2002, the agency experienced a lack of expertise, no established practices or procedures relating to ROW acquisition, environmental, or construction management, and limited management oversight. Gaps in best practice tools and procedures created variability in early project delivery success and resulted in project cost and schedule impacts. The agency essentially started as an inefficient and ineffective organization. As a result, the initial light rail project communicated to voters in 1996 ultimately was modified. Its original length, Central Link, 19.7 miles (19 stations) at $1.7 billon (1995 dollars) with an expected completion date of 2006 became the following:
Cost Initial Segment and Airport Link (2009) 15.6 13 $2.6 billion
University Link (2016) 3.2 2 $1.7 billion
However, in the last five years, Sound Transit has responded to its challenges through improvements in construction planning and management processes and implementation of “best practices.” Indications of diligent review of proposed change orders by Sound Transit Project Controls were also identified. From its inception in 1996, the agency has gradually developed management techniques and construction project controls and procedures.
Sound Transit has improved its structure to manage projects and has standardized guidelines on cost estimating, change and cost management, project management, and risk assessments. Sound Transit has also developed procedures for addressing emerging lessons learned.
Although Sound Transit has made great strides in improving its project delivery practices, opportunities exist that will contribute towards its present culture of continuous improvement.
That’s the unedited summary of the auditor’s conclusion, and it is far from the stinging rebuke Anderson makes it out to be. Of course the report highlights things Sound Transit could do better. That’s the purpose of a performance audit: to help an agency improve its performance. But rather than merely focusing on the agency’s shortcomings, the report actually documents a remarkable turnaround, in which Sound Transit overcame its early management woes to grow into a mature and well-run organization that is largely delivering projects on budget and on time. That’s also the conclusion of state Treasurer Mike Murphy, who in enthusiastically endorsing Proposition 1 yesterday, praised Sound Transit’s cost and revenue projections as conservative, while criticizing opponents’ numbers as “bogus.”
Opponents keep reaching back a decade or more to when Sound Transit, then a start-up agency, initially over-promised the Central Link light rail, but they intentionally ignore the progress that’s been made since then. Still, voters are largely getting the same 19 miles of rail first promised (though with fewer stations, and over a longer construction period,) and without raising any additional taxes. Opponents would like this election to be about Sound Transit’s management problems in the late 1990’s, but Murphy — whose condemnation of the Seattle Monorail’s financing package played a huge role in killing the project — succinctly sums up the real issue facing voters:
“Do you want something to happen or not? If you do, vote yes,” he said. “If you don’t, vote no.”
Indeed, if there is a lesson to be learned from this performance audit, and the parallel histories of both Sound Transit and the Seattle Monorail Project, it is the inherent danger of starting large transportation agencies from scratch… which ironically, is exactly what we’ll eventually be forced to do should voters reject Proposition 1. The pro-rail critics of the roads and transit package have this pie-eyed idea that we can just come back next year or the year after that with a transit-only package, but they ignore two basic realities: a) polls show that neither roads nor transit would pass on their own, and b) there’s no guarantee Sound Transit will even be allowed to bring a package before voters.
There are many in the Legislature and the pro-roads camp who are just itching for Proposition 1 to fail, so that they have an excuse to finally pass “governance reform,” implementing a multi-county, multi-modal transportation agency intended to dilute the influence of pro-rail Seattle voters, and essentially dismantle Sound Transit as an independent agency. Such a “reform,” whatever its merits, would be so disruptive, and introduce so many delays into any effort to pass and implement a project even remotely based on ST2, that Sound Transit would surely lose the bulk of the management and engineering infrastructure it has so painfully constructed over the past five years, and the expertise that goes with it. We would, in essence, be starting from scratch, ignoring yet another one of the audit’s primary conclusions:
Strong management and mature agency skills are not created overnight. It took five years from start-up to the time Sound Transit had its policies, its systems and its management practices fully in place. The Puget Sound region should be careful to preserve and nurture this knowledge base and not to assume that every new program needs a new agency to manage it.
No doubt Proposition 1 is filled with compromises, and I welcome a debate on its costs vs. benefits. But the measure’s opponents reveal themselves to be fundamentally lazy and dishonest in their persistent efforts to slander Sound Transit itself as corrupt and incompetent.
Given the timing, I had grave doubts that this performance audit would be fair and impartial, but I see nothing in this report to suggest that Sound Transit’s management is not dedicated to constantly improving its internal processes, that its ridership, revenue and cost projections should be held suspect, or that the agency itself is not positioned to deliver ST2 largely as promised. Large capital projects are inherently risky, and in that context the report concludes:
The use of the aforementioned “best practices” in conjunction with input from technical and subject matter experts and FTA oversight demonstrate that Sound Transit’s construction planning and management systems are maturing. This should be understood in the context of the complex and high risk contracts that Sound Transit is delivering, where challenges and risks will always be present. Focus, innovation, and due diligence will always be required to avoid surprises on such projects.
A “stinging performance audit”… my ass.