Public Advocates
131 Steuart Street Suite 300
San Francisco 94105

January 22, 2010


Chair Haggerty and Commissioners
Metropolitan Transportation Commission
101 Eight Street
Oakland, California 94607

Re: Re-Allocation of Economic Stimulus Funds

Public Advocates’ civil rights complaint to the Federal Transit Administration last year, on behalf of Urban Habitat, Genesis and TransForm, led to a comprehensive FTA compliance review of BART’s Title VI program. FTA’s on-site investigation in December concluded that our complaint was well-founded in its allegations about BART’s failure to comply with the requirement to complete a service and fare equity analysis for the Oakland Airport Connector project, as set forth in Administrator Peter Rogoff’s strongly-worded letter of January 15.

In the wake of Administrator Rogoff’s letter, the Commission faces a stark choice. On the one hand, it can fulfill its commitment in Resolution 3885 by immediately redistributing $70 million in stimulus funds to ailing transit systems across the region, saving jobs and transit service from further deep cuts. On the other hand, it can risk the loss of every penny of those stimulus funds to the region by rolling the dice on BART’s ability to “fully remediate non-compliance with all Title VI requirements” – not just those associated with the Oakland Airport Connector project – to FTA’s satisfaction before the March 5 deadline.

When the Commission adopted Res. 3885 last February, it agreed that the allocation of $70 million in stimulus funds to OAC would be contingent on BART’s ability to make timely use of those funds. The Commission explicitly set out a contingency plan:

“Funding for Non-System Preservation projects [such as OAC] that do not meet the prescribed deadlines will be redistributed to the system preservations projects within the applicable categories.” (Res. 3885, att. A, p. 7 of 10.)

Attachment C to the Resolution is the “Tier 2 Contingency List” for the reallocation of that $70 million in FTA formula funds in the event the money could not be timely used by BART. That contingency plan (attached) includes significant funding for preservation of existing and threatened transit service for each of the region’s transit systems. It was adopted at a time when the prospects for state funding for transit operations were not nearly as dire as they are today. Under Res. 3885’s contingency plan, MTC would re-program:

o $17.5 million to MUNI, which currently faces a $16.9 million operating deficit and could cut 230 jobs (mostly drivers), with severe service reductions.

o $8.7 million to AC Transit, which plans to implement service cuts of 8.4 percent in March, with layoffs, on top of a recent 14 percent fare increase.

o $17 million to BART, which will face a $25 million budget shortfall by June 30, and is contemplating 74 layoffs and another round of fare increases.

o $12.2 million to VTA, which faces a $50 million operating deficit next fiscal year and recently cut service by 8 percent and raised fares.

o Another $14.6 million would be divided among Caltrain ($2.7 million), Golden Gate ($2.4 million), SamTrans ($2 million), Vallejo ($2 million) and the other cash- strapped Bay Area transit systems.

These funds may be used not only for capital replacement, but for operating expenses, including preventive maintenance. Indeed, Congress amended ARRA last spring to allow 10 percent of these funds to be used directly for transit operations. This use of the funds will create many more jobs than infrastructure investments,1 and provides the Commission with a critical opportunity to promote a widespread and equitable recovery that benefits all the Bay Area’s communities and transit riders. {1 jobs as a similar investment in capital (41,000 jobs per billion dollars compared to 23,000).}

FTA’s January 15 letter makes clear in unusually strong terms that unless BART fully satisfies the rigorous substantive and procedural standards of a full equity analysis, FTA will be forced by statute to reallocate these funds to another region. The likelihood of BART’s succeeding is very low based on the strict federal timeline and BART’s own dismal track record. Despite numerous warnings by Public Advocates, Urban Habitat, and others, BART refused to conduct the service equity analysis until FTA intervened. BART’s last-minute effort to submit a service equity analysis that it prepared without required public participation was rejected by FTA as grossly insufficient. Moreover, it appears like that FTA will require additional corrective actions when it completes its comprehensive Title VI Compliance Review of BART. To summarize just the known risks that should lead the Commission to reallocate these funds:

o First, BART must “provide an acceptable action plan” for preparing the service and fare equity analysis required by law, and FTA must approve that plan.

If BART prepares that plan without adequate public participation, we will protest that violation to FTA. We have already protested its submission of a draft prepared in secret.
If BART prepares an inadequate corrective action plan, we will raise those inadequacies with FTA and ask it to require additional actions.

In light of BART’ s grave and admitted failure to meet its obligations, and in order to avoid a mechanical equity analysis that reaches a pre-ordained conclusion, we plan to ask FTA to require BART to hire qualified independent consultants to complete the equity analysis and run the public outreach process.

o Even if this can be done both properly and quickly, which is in grave doubt, BART must then successfully complete the equity analysis.

If BART completes that equity analysis without adequate public participation, we will protest that violation to FTA.

If BART prepares an inadequate equity analysis, we will raise those inadequacies with FTA and ask it to require BART to conduct additional analysis.

If BART fails to prepare an equity analysis that compares alternatives, including a bus rapid transit alternative, or fails to determine whether there is a less discriminatory alternative to the current OAC project, we will protest those violations to FTA and ask it to require additional analysis and action.

It is far from clear that BART can complete an equity analysis for this project that will meet federal requirements. FTA has already made it clear that the analysis must meaningfully “analyze whether the Project . . . would have a discriminatory impact.” Our Title VI complaint already demonstrates a number of discriminatory impacts that will require changes to the project.

o After completing this analysis, BART must “implement any mitigation measures.” This will likely include significant changes to the project, affecting its design (e.g., the inclusion
of intermediate stops), its cost and its financing plan.

If BART fails to implement, or delays the implementation of, any mitigation measures, we will protest such violations to the FTA and seek corrective action.

All of this will mean a high likelihood of re-bidding the project.

o Finally, BART will have to “fully remediate non-compliance with all Title VI requirements.”

This refers not just to those Title VI requirements already noted in the January 15 letter, but also to those that are likely to be “addressed through the Office of Civil Rights’ compliance review process” with BART’s Title VI program generally. This comprehensive review process is as yet unfinished, and given BART’ s recent non-compliance, there is a high likelihood that unforeseen corrective actions will result from it.

The confluence of these requirements – many time-consuming, some entirely unpredictable, and others close to impossible – justify us in agreeing with FTA Administrator Rogoff’s statement that the OAC option “involves considerable risk to the $70 million in ARRA funds” and his emphasis that “MTC and BART are now in danger of losing” that federal funding.

We urge you not to gamble with funds that BART itself could better spend maintaining service for its existing riders, and which transit operators in all nine Bay Area counties desperately need. We urge you to take the only responsible course by reallocating the funds according to the contingency plan you previously adopted.

Very truly yours,
Richard A. Marcantonio
Managing Attorney

Enclosures: Res. 3885 “contingency plan”
Letter to Chair Fang and BART directors

Cc:    Steve Heminger, MTC Executive Director
James Fang, Chair, BART Board, and Board Members
President Jane Brunner and Members, Oakland City Council
President Victor Uno and Commissioners, Port of Oakland
Chair Alice Lai–Bitker, Alameda County Transportation Improvement Authority
Chair Mark Green, Alameda County Congestion Management Agency
Peter Rogoff, FTA Administrator
Cheryl Hershey, FTA Director of Civil Rights
Amber Ontiveros, FTA Title VI Specialist
Dorval Carter, FTA Chief Counsel