Wednesday, March 7, 2007

Moving Beyond the RTA Oversight Model

Representative Hamos' bill to vest the RTA with limited additional authority and responsibilities begs the question whether it is time to reexamine the current model of having a permanent oversight agency like the RTA over the separately managed service boards that operate the region's public transit system. The Governor's rejection of the Moving Beyond Congestion initiative in his proposed FY 2008 budget gives this question added urgency. If the experience of other major transit systems is any indication, it is time to give serious consideration to moving beyond the current permanent oversight model.

An oversight agency can offer a fresh and broader perspective on the problems facing the agencies it oversees. If properly empowered it can take hard and unpopular, but necessary, measures to restore the agencies under its purview. An earlier post outlined these benefits and suggested that an emergency oversight agency of limited duration and broad powers might be a useful tool to improve the financial condition and operational performance of the region's public transit system before transitioning to a more permanent new operating and governance structure.

There are major disadvantages to the oversight model, however, that emerge and are exacerbated the longer a separate oversight agency is in place over operating agencies:

: An oversight agency like the RTA is unlikely to have control over hiring and firing of key personnel in the operating agencies. Good people are the key to accountability and and strong operating performance, yet the RTA has no control over personnel at the service boards.

Divided Loyalties and Lines of Communication:
There is an inherent problem of serving two masters that confronts the employees of the operating agencies being overseen. For example, the employees of the three service boards have a reporting structure that goes up to their board of directors. The RTA and its board of directors is placed on top of this reporting structure, but the fit is uncomfortable. Employees of a service board are likely much more responsive to their agency's board of directors, with whom they interact on a regular basis, than to the RTA and its board, which are much more distant and not involved in their day-to-day operations.

Oversight Agency Accountability:
Emergency oversight agencies often have the benefit of clear statutory direction, a limited time frame to accomplish their tasks, and a sense of urgency stemming from the problems prompting the establishment of the oversight agency. The emergency oversight agency is held accountable according to some definite standard (e.g., has the school's budget been brought back into balance). The longer the oversight agency is in place, the harder it is to hold it accountable.

The service boards are accountable to the RTA for a few important things, like approval of their capital programs and operating plans. To whom is the RTA accountable? Under the RTA Act, the RTA supplies certain information to key State of Illinois officials (e.g., Section 4.13) The State can cut off the operating subsidies paid to the RTA (i.e., the Public Transportation Fund match of the RTA sales tax receipts) if the RTA fails to approve balanced budgets in a timely fashion. (Section 4.09(b)(2))

Short of the extreme remedy of cutting off funding for transit operations, the State of Illinois has few tools to hold the RTA accountable for its performance. The State has no power to appoint even one RTA board member, even though the State provides hundreds of millions of dollars in operating subsidies each year. Under the current RTA Act neither the Governor nor the General Assembly can remove incompetent RTA leadership.

Expertise: There is the inherent problem of having a long-term oversight agency over transit agencies that operate complex systems with lots of technology in the face of daunting operational and political challenges. At best, the oversight agency, which has no operating responsibilities and limited or no transit operations expertise, lacks the credibility with the operating agencies to prompt them to make operational improvements. At worst, the oversight agency meddles in transit operations in an unproductive and duplicative fashion. The RTA's failure over the last 25 years to deliver a universal fare card allowing travel on all public transit services in the region is a perfect illustration of this problem.

These inherent problems in the areas of expertise, accountability, divided loyalties, and personnel limit the long-term effectiveness of oversight agencies. It appears that most metropolitan areas in the country have rejected the oversight model that the RTA, its Moving Beyond Congestion proponents and even well-intentioned legislators like Representative Hamos seem determined to perpetrate.

In most major metropolitan areas the operating entities (i.e., service boards) are consolidated within one agency under one board of directors. There are no separate operating agencies with their own boards of directors acting under an oversight agency with its own board of directors. Here is a sampling of such transit agencies: MBTA (Boston); NY MTA (New York City); SEPTA (Philadelphia); WMATA (Washington D.C.); LA-Metro (Los Angeles).

There are a few exceptions. The most notable one is in the Bay Area, which is served by a set of transit agencies (e.g., BART, SF-Muni) that are separately chartered and operated under separate boards. However, as we will discuss in a later post, the oversight agency in the Bay Area has a much more substantial role than the RTA.

Representative Hamos' bill represents an incremental step towards empowering the RTA. Maybe the time for such incremental steps has passed. Instead, what the region may need is to abolish the RTA and consolidate the CTA, Metra and Pace into a single new agency with a single board of directors and full operational responsibilities for public transit in the region. Why inch towards a transit agency that consolidates operating responsibilities and governance in one organization, which is the situation in most metropolitian areas, when the times call for bold step in that direction?

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