by Matt Rosenberg October 26th, 2012
A new performance audit by the State of Washington says the Citizen Oversight Panel of the three-county Seattle region agency Sound Transit suffers from poor ethics, a poor understanding of its mission, and could be also considerably more transparent online. The audit details problems due to lack of screening of COP members and poor oversight of themselves by Sound Transit’s overseers. This includes boosterism of Sound Transit by COP rather than scrutiny, plus overlapping relationships and ethically dubious backscratching between COP board members, non-profits and for-profits that were paid by Sound Transit, and the agency itself.
Other key findings are that the agency is on track to complete ST2 within budget but that it needs more contingency funds and less inflated projections of future ridership. This is especially so, the audit says, because voters may eventually be asked to approve a third phase plan that could include funding an Eastside commuter rail corridor at a cost of up to $1.3 billion on a 37-mile rail easement purchased from the Port of Seattle.
Originally approved by voters in 1996, Sound Transit operates express buses, commuter rail and light rail. It won more voter-approved funding in 2008 to build a $17.9 billion second phase system known as ST2, including major extensions north, south and east of the Central Link light rail now running from downtown Seattle to Sea-Tac Airport. But because revenues are now one-third less than Sound Transit projected to voters at the time of the vote, some deadlines are being extended.
The report from Washington State Auditor Brian Sonntag was done by the national audit and consulting firm TKW. Names were supplied at our request by the Auditor’s Office. Additional biographical details on COP members comes from the panel’s online roster. Some key findings on the COP from the audit follow.
Conflict of interest concerns accented in audit
Philip B. Lovell, a retired executive for Turner Construction’s northwest office, joined the COP as a member in March 2011. Later that same year, Turner got an initial $564,000 contract for construction planning of the planned light rail underground station at Capitol Hill. This is part of the current line extension to the University of Washington. Turner is set to get another $6.5 million to manage this extension, the audit says. Lovell should consult with the current COP chair to see if he should recuse himself from oversight of the Turner contract, the audit recommends.
COP member Karen Mask of Bellevue who joined only last year and resigned this year, “owned or co-owned companies that did more than $15 million in business with Sound Transit from the late 1990s through 2008.” The companies were KJM and Associates, and Hill International.
COP member David Russell, formerly Mayor of Kirkland and formerly president of the Puget Sound Regional Council, serves on the board of the pro-transit non-profit Futurewise, as did 2003-2011 COP board member Karen Miller. Cementing a key Sound Transit contractor’s relationship with the COP was another Futurewise board member named Jared Smith, senior vice-president for the Parsons Brinkerhoff engineering firm. PB was paid more than $44.5 million by Sound Transit between 2007 and 2011. Parsons Brinkerhoff was wired not only to the COP, but directly to Sound Transit, the audit explains. The company developed the original 1996 Stage 1 Sound Transit plan (called “Sound Move”); and it contributed support to the 2008 ST2 ballot measure campaign to expand the system.
Current COP Member J.D. Wessling, the retired CFO of Cascade Natural Gas, and former COP Chair Richard U. Chapin, told auditors “the public may see these outside affiliations as conflicting with the objective oversight of Sound Transit.”
ST payments to supportive non-profits entwined with COP
Along with another pro-transit non-profit called the Transportation Choices Coalition, Futurewise backed 2009 state legislation to require high-density “transit-oriented development” (TOD) along Sound Transit’s light rail line. “The legislation didn’t pass but it “would have resulted in increased ridership and fare revenue for Sound Transit,” the audit says. Over the last five years Sound Transit made payments of $160,000 to TOD backers Futurewise and Transportation Choices, while COP members Russell and Miller served on Futurewise’s board for at least some of that time. In contrast and to avoid the potential for such conflicts, two other COP members, Mary McCumber and Jessyn Schor, resigned in 2005 when they became directors respectively of Futurewise and Transportation Choices.
Inappropriate public advocacy
Public advocacy for Sound Transit by oversight panel members was another concern raised by auditors. Six different times meeting minutes indicated certain COP members disclosed they’d written newspaper opinion pieces or spoken publicly in favor of the ST2 ballot measure or against another ballot measure seen as anti-transit. “These highly visible political activities raise questions about the COP’s ability to perform objective oversight of Sound Transit,” the audit stated. COP didn’t perform any written assessment of the ST2 ballot measure, the audit also found. Revenues for the measure are now 32 percent lower than Sound Transit projected to voters before the election.
Based on these findings, the audit recommends a series of improvements to improve COP’s ethical standards and focus. Among them:
The audit also makes a series of recommendations that COP’s body of work be more thoroughly and prominently displayed online at the ST web site. The audit said this should include meeting materials, correspondence, reports, and the agency’s responses to issues raised by the COP.
The COP did recently release a special report critical of the management of Sound Transit’s North Sounder commuter rail line, for poor ridership and high expenses, and made recommendations for improvements and better agency oversight. Other than its annual year-end report, it was first special, or project-specific report COP has publicly issued in five years.
Audit’s “black eye” for COP unwarranted, Chair says
In a reply appended to the audit Sound Transit CEO Joni Earl said COP members don’t have time to be watchdogs and the agency is unaware of any ethical lapses. The chairman of COP, former Sumner City Council member Stuart Scheuerman, said he agreed with the audit’s transparency recommendations, but did not favor making official any of the others for COP. “I think the audit has given us a black eye,” and unfairly so, he said. ‘We’ve done a lot of good over the years,” including via the North Sounder report and annual reports and by getting the ST board to simplify financial reporting and accent lessons learned. The oversight panel has a strong situational awareness of ethics, and benefits greatly from the knowledge of its members, he added.