San Francisco’s top transportation official is taking the blame in the way The City’s transportation agency has been spending — or not spending — a November 2014 voter-approved $500 million transportation general obligation bond.
On Wednesday, San Francisco Board of Supervisors President London Breed held a hearing at the board’s Government and Oversight Committee, asking officials of the San Francisco Municipal Transportation Agency to explain why spending of the $500 million bond money is moving slowly and what actions transit officials plan to take expedite using the bond money.
According to SFMTA documents, the first bond issuance occurred in July 2015, where the transit agency received nearly $70 million. Of the $70 million, the SFMTA has only spent 22 percent of the first bond issuance, mostly on Muni and pedestrian safety improvements. Another 40 percent of the $70 million is ready for use.
Breed said voters had “overwhelmingly” approved the general obligation bond in November 2014 — Proposition A — saying that the public had trusted the SFMTA in delivering the promise of using the bond money in improving the transit system.
She added her concerns about the devaluation of the bond money while the cost of construction for transportation projects goes up:
“With each passing day the value of this money goes down and the cost of construction goes up, meaning the MTA can’t deliver the same quality or quantity of transportation improvements that the bond money originally could have.”
SFMTA Director Ed Reiskin said there was no question that the transit agency had challenges, which led to the slow pace of spending the bond money.
One of those challenges included under estimating the time it would take to complete the community outreach process for many of the projects under Muni Forward.
In 2014, the SFMTA Board of Directors approved major changes to the Muni system as part of the Transit Effectiveness Project, now called Muni Forward. It included projects for almost every Muni route to help improve service and reliability.
The work was a seven-year process for SFMTA transportation planners to complete.
A number of Muni Forward projects have already used some of the bond money as a funding source. Future Muni Forward projects will also rely on the bond money as source for funds.
Reiskin said he believed at the time, based off seven years of work by SFMTA staff, that most of the projects were close to “shovel ready,” but that was not the case:
“My estimation of the readiness of those projects was wrong.”
While there was a conceptual design approval from the SFMTA board on many of the Muni changes in the Muni Forward package, the SFMTA needed more time in completing detailed designs of each project and during the community outreach process, which was the main cause of the delay in using the bond money right away, said Reiskin.
Other reasons that contributed to the delay use of the bond money included coordination issues with San Francisco Public Works and San Francisco Public Utilities Commission on projects. Reiskin said staff is doing more coordination with both public works and the utilities commission to resolve issues and challenges.
Another problem the SFMTA is facing is finding contractors to bid on the projects. With all the construction going on in The City, the transit agency is having a hard time finding enough contractors to bid on some of its project, said Reiskin:
“We recently had to twice rebid a project because we couldn’t get enough bidders in order to award the work.”
He added that the transit agency has changed and shorten the outreach process, provided better tools for project managers and created a separate project control unit that keeps an eye projects, and flag projects that have issues.
Reiskin shared a projected schedule with supervisors on how the SFMTA plans to spend the rest of the $500 million bond money next year, the transit agency anticipates to use 45 percent of the bond money, and expects to spend all of the bond money by 2022.
A second issuance of the bond money will occur later this year of $117 million, said Reiskin.
San Francisco Controller Ben Rosenfield said his office releases an annual report in June that looks at making sure that voters are getting what they are promised in terms of the scope, schedule and budget when it comes to the use of general obligation bonds approved by voters.
Rosenfield said last year’s report noted that while it was still early in the general obligation bond program for Proposition A, the spending rate was lower than expected from the first issuance of the bond and noted that schedule delays were most likely coming.
Reiskin said while everything is not perfect, the transit agency is working to make improvements:
“There’s continual work to be done to improve how we deliver projects in this city, not just in our department, not just with this bond, but we’re taking numerous steps along all those dimensions to continue moving these projects forward.”