Assemblymember Berman Reacts to State Audit of VTA

For immediate release:

Wednesday, June 12, 2024

SACRAMENTO - The California State Auditor released of a comprehensive state audit of the Santa Clara County Valley Transportation Authority (VTA) yesterday, an audit that was conducted at the request of Assemblymember Marc Berman (D-Menlo Park). The State Auditor reviewed VTA's governance structure, project planning and management, financial viability, and fiscal oversight. Read the state audit here.

"Yesterday the State Auditor confirmed what we have known for years: VTA's process for appointing directors lacks the appropriate transparency that the public demands, and the short length of terms that members serve is both an outlier among similar transit agencies and is an unnecessary obstacle to board members developing the expertise needed to provide the high-quality oversight of the agency that riders, VTA staff, and Santa Clara County taxpayers deserve," said Assemblymember Marc Berman. "This is not a surprise, as three Civil Grand Jury Reports, multiple consultants hired by VTA, and a 2008 audit by the State Auditor have identified the need for similar changes to VTA's governance structure.

However, I am both surprised and disappointed that VTA has rejected the Auditor's recommendations to address these longstanding good governance issues. I do not understand why VTA would choose to protect their power to appoint and remove board members behind closed doors with no public transparency or justification, undermining the agency's accountability to residents. I do not understand why VTA thinks it is better for board members to serve for shorter amounts of time given the breadth and complexity of the services VTA provides. Like the State Auditor, I found VTA's rationale for rejecting these recommendations to be woefully inadequate," said Assemblymember Berman.

In 2022, Assemblymember Berman and former San José Vice Mayor and past VTA Board Chair Chappie Jones jointly called for a state audit of VTA's governance structure, fiscal management, and project planning and monitoring. Read their announcement from 2022 here.

"The State Auditor looked beyond parochial political interests to provide urgently needed impartial recommendations for VTA," said Assemblymember Berman. "I am grateful for former San Jose Vice Mayor Chappie Jones' partnership in our shared endeavor to create a transparent and experienced board of directors. I would also like to thank the State Auditor and his staff for their thorough audit and their commitment to the improvement of public agencies."

Read the full audit here: 2023-101 Santa Clara Valley Transportation Authority - California State Auditor

Read the recommendations here: 2023-101 Santa Clara Valley Transportation Authority - California State Auditor

According to the 2019 Civil Grand Jury Report, 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. Notwithstanding numerous reviews confirming structural barriers to success, many of these barriers have not yet been addressed.

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."

As directed by the Joint Legislative Audit Committee, the State Auditor conducted an audit of VTA regarding the agency's governance structure, project planning and management, financial viability, and fiscal oversight.

In regards to governance, the audit identified experience and transparency as key areas for improvement. The audit reported, "the processes for appointing VTA's directors are not always transparent enough to ensure the appointment of directors with experience in transportation. For example, one group of cities in the county does not meet publicly when it decides who to appoint as its director. Once appointed, VTA's directors have briefer tenures than those of peer transit agencies, and this is due, in part, to the shorter term lengths that state law establishes for VTA directors compared to the term lengths of other agencies' directors. As a result, VTA's board has less experience overseeing the agency's operations than the boards of peer agencies."

In addition to governance reform, the audit found that VTA needs to strengthen its planning and oversight of capital projects. For example, "when VTA estimates the costs of capital projects, it does not always estimate the cost to operate and maintain the project.

Additionally, VTA's staff do not provide regular updates to the board about variances from the cost estimates it develops before the construction of a project. For example, the construction cost of one project we reviewed increased by about 24 percent from the start of construction. Without regular information about cost increases such as this one, the board has diminished insight into capital project performance."

This is similar to concerns raised in January by VTA's own internal auditor general, who found that VTA staff misled the board of directors about the true BART to Silicon Valley project cost and engaged in a "breach of transparency."

Contact: [email protected]