Wednesday, October 31, 2012

Metro Board Report for October 2012

The October meeting of the Metro Board focused on Measure J, and the continuing rift between those members of the Board that are supporting same and those who are vocally opposed to it (even to the point of unfairly identifying as Metro Board members in the course of their opposition).

What Was And Wasn’t In The Measure J Legislation:  Regular readers of this report know that Measure J was authorized to be on the November 6 ballot because of AB 1446 (Feuer), which gave the Metro Board the ability to do so … just as the original Measure R was authorized in 2008 by a similar state bill.

The amendment by John Fasana that would allow for the easier transfer of highway project money to transit projects (and vice-versa) required AB 1446 to contain language allowing same, else Measure J conflict with state law. And what was supposed to be a “receive and file” on that language addition turned into a new debate on the process, led by Supervisor Don Knabe, one of the Board members who is opposed to the ballot measure.

Knabe expressed his concerns that AB 1446 was “manipulated” and claimed that the Board was never given the legislation’s amendment language before it was passed by the Legislature. He also thought the two-thirds’ vote of the Board required before any shift of funds would be changed to a simple majority; after County Counsel Charles Safer assured him it was not, Knabe quoted a section of the bill that turned out to be for a related, but otherwise separate provision. (Thank you, Supervisor Zev Yaroslavsky, for knowing the difference between an “expenditure plan” and a “funding reallocation”.)

Metro Director of Government Relations Michael Turner managed to clear the whole matter up by pointing out that, since the Board created a new expenditure plan for Measure J – which did require only a simple majority vote – the Feuer bill had to be made consistent with the Board’s action.  That settled the matter, until …

Anyone Interested In A Nice Game Of Leapfrog?: The accelerated Measure J project timelines notwithstanding, Knabe believes that “connecting LAX directly to the Metro Green Line should be among our higher priorities.” At least, that is how the convoluted motion he presented to the Board begins.

At the heart of the motion is a Knabe proposal to complete the LAX/Airport Metro Connector Project (which used to be called the Green Line extension project) no later than 2020, even though Measure J already would accelerate the original timeline for that project by five years; Knabe’s motion, based on the original completion date of 2028, has as its only sentence punctuated by an exclamation point “… 16 years from now!”

The discussion began at the Executive Management Committee and spilled over to the main Board meeting a week later despite Supervisor Mark Ridley-Thomas’ call for “renewed prioritization” (whatever the hell that is supposed to mean) and his feeling that there is a “lack of motivation on prioritization” (again, whatever …). Supervisor and Board Chair Michael Antonovich claimed that the passage of Measure J wouldn’t matter, ignoring completely the aforementioned acceleration of the timeline. Antonovich then made a bizarre comparison of the LAX connector to a proposed expansion of the Pico Blue/Expo Line Station if the “Farmers Field” stadium project goes through, which I am still trying to figure out, two weeks after he made the comparison.

CEO Art Leahy suggested a joint meeting of the Board with the Federal Aviation Administration, Los Angeles World Airports (LAWA), and the Federal Transit Administration, but that was met with a call by Ridley-Thomas for a “repositioning of the project” and carrying the discussion to the full Board.

By that time, Mel Wilson started to predict mixed signals from the Board and LAWA and took a thinly veiled dig at Knabe by saying “some will not support Measure J, but then want this to be a priority.” That was enough for Yaroslavsky to attack the Knabe motion as reopening the Long Range Transportation Plan (LRTP): “We promised that no project would leapfrog. Which projects suffer?”

That led to a heated discussion of whether the Knabe motion would undo the project order defined in Measure R. Ara Najarian chimed in with his vision of a “fragile agreement on the LRTP unraveling” and Antonovich humorously suggesting that “we should let (Brad) Sherman and (Howard) Berman referee this argument.”* The best moment came when Richard Katz started to make a point, then decided after only a few words to remain neutral, saying “I should just shut up.”

In the end, the Knabe motion passed with its controversial provision deleted: While it calls for a detailed action plan including funding alternatives and formal arrangements with LAWA and local, state and federal partners to accelerate the schedule for funding and implementing the schedule (but with a timeline that complements the Crenshaw Corridor and South Bay Extension projects, scheduled for completion in 2018 and 2020, respectively, if Measure J passes) and for a specific approach to advocacy efforts with the relevant federal agencies, the paragraph calling for a detailed timeline and Board actions to accelerate the environmental review and amendments to the expenditure plan and the LRTP was removed by Knabe under pressure from Yaroslavsky.

The question now is what Knabe will attempt once the action plan is brought to the Board in a few months.

(*-The reference in Antonovich’s quip is to the October 11 debate between the candidates for the 30th Congressional District where Sherman put his arm around Berman’s shoulder and asked him “do you want to get into this?”)

Quote Of The Month: Katz, during discussion of the Measure J question about whether or not the funding reallocation amendment required a two-thirds vote or not: “Why don’t we just ask Fasana?” (John was present at the time of the discussion but for some reason was never asked the question.)

As is always the case during the holidays, the November Board meeting – which would fall on Thanksgiving if held on the usual “fourth Thursday” schedule – has been rescheduled to a December date. So there won’t be a new post here for about six weeks. (Please hold the cracks on how I sometimes go that long between posts even when the Board is on its regular schedule.)

Next Metro Board Committee Meetings: Wednesday and Thursday, November 14 and 15
Next Metro Board Meeting: Thursday, December 13

A note about identification of Directors in the report: Diane DuBois, John Fasana, Ara Najarian and Pam O’Connor are City Councilmembers from the cities of Lakewood, Duarte. Glendale and Santa Monica, respectively, and are elected to the Metro Board by the Los Angeles County City Selection Committee, per state law. Richard Katz and Mel Wilson are appointees of Los Angeles Mayor Antonio Villaraigosa, as is José Huizar (one of the Mayor's appointments must be a member of the Los Angeles City Council). Only the five County Supervisors – Michael Antonovich, Don Knabe, Gloris Molina, Mark Ridley-Thomas and Zev Yaroslavsky – and the Mayor of the City of Los Angeles hold ex officio positions on the Board.

Tuesday, October 2, 2012

Metro Board Report for September 2012

The September meeting of the Metro Board was almost entirely consumed with the ongoing debate as to who should sell advertising on Metro’s vehicles and inside its stations for the next five years.

And, with apologies to William Shakespeare for borrowing one of his most familiar titles, it was much ado about nothing, at least for the moment …

That Ad On The Side Of Your Bus Is Big Business:  Every five years, Metro goes out to bid on the contract to sell the advertising on its properties. That is how ads get on both the outside and inside of buses and light rail cars, and inside subway cars and stations. 2012 happens to be the last year of the current year’s contract, held by CBS Outdoor Group, and the awarding of the next contract is turning into a battle royale.

The matter of the contract award originally came before the Executive Management Committee back in July, which decided that additional detail was needed from staff before they could award the contract. Given that such a delay is usually routine, we opted not to report on it then; as it turns out, the additional details opened a can of worms, with the worms now mucking up the entire affair.

At issue is the competing bid by Titan Outdoor Group, which offered a revenue guarantee that is 6.5% higher than CBS’ but which was rejected by staff primarily due to their defaulting on 20 other transit agencies’ contracts (which Titan renegotiated for lower revenue levels) including a termination by the New York City MTA, ad rates as much as 40% higher than CBS (which proposed only a 5% increase) but projecting a much lower rate for advertising inside Union Station, and a high projected rate of unsold space overall.

Titan has challenged the prospective award, which has resulted in both sides engaging in name calling before the Board; at the September 27 meeting, each side was given up to 15 minutes to make their case (to both companies’ credit, neither used all of their allotted time).  To summarize their positions:

  • Titan accused Metro staff of failing to perform due diligence, claimed CBS had problems in the past with Metro over billboards on Metro property, offered a letter of credit to ensure the revenue (which sounded a lot like the letter of credit AnsaldoBreda offered three years ago when they defaulted on their 2004 contract for light rail vehicles), and claimed CBS was putting its outdoor division “up for sale” and had inserted into their contract bid the right to assign the contract to another party if that happened.
  • CBS claimed Titan had a history of defaulting on revenue guarantees (the aforementioned 20 renegotiated contracts), accused Titan’s lobbyists of muddying the issues, and failed to release audited financial statements as part of their bid. Answering Titan’s last claim, CBS offered to guarantee the contracted revenue in “the unlikely event of a sale” of its outdoor division.

And then there was the (notably brief) public comment.  The unions, with the apparent encouragement of CBS, sent one main spokesperson and representatives of their small business “enterprise” contractors to speak on their behalf and gadfly Malcolm Klugman wanted Metro to survey its passengers to see if they want the advertising at all (in complete ignorance of the fact that the $110 million in ad revenue goes directly to support transit operations).

Then the Board started debating, and started asking questions of Metro staff. Chairman Michael Antonovich asked a number of pointed questions about rail station advertising and adjustments in fleet size, but then made assumptions based on facts that he felt needed correction.  Mel Wilson (yes, he’s back, as clueless as ever) wanted to see the payment histories for both companies before voting. All of the questions – as usual – were already covered in the 19 page staff report. Does anyone besides me actually read these?

Don Knabe started to ask a question about the qualifications of both companies but was interrupted by a CBS representative committing the ultimate faux pas of addressing the Board without being recognized to speak.  Consequently, we never did find out what Knabe was really asking.

And after all that discussion, there was sufficient disagreement remaining to create a series of motions with differing proposed results.

First, John Fasana moved to overturn the staff recommendation and award the contract to Titan, contingent on their providing a letter of credit equal to one year’s guaranteed revenues. CBS’ lawyer then tried to have public comment reopened but was shot down by Antonovich, who said the Board “has carte blanche to make motions and amendments, and discuss them.”

Before that could be voted upon, though, Richard Katz put forward a substitute motion to extend the current contract with CBS for up to six months while entering into a sealed bid procurement. Michelle Lopes Caldwell, Metro’s chief administrative services officer, pointed out that CBS would have to agree to the extension, prompting Katz to add an amendment whereby if CBS refused to do so, the contract would be automatically awarded to Titan.

The Katz motion failed.  So did the Fasana motion, which prompted him to offer a motion where the staff recommendation would be accepted, with a provision covering the transfer of the contract if CBS Outdoor Group was sold. No one seconded that motion, prompting Antonovich to call for a vote on the staff recommendation as presented. That failed as well, meaning the entire matter will come back to the Board in October, at which point I expect to hear a lot of this all over again.

Now, my commentary on why I believe this will still be a stalemate next month, unless something radical changes. All you need to do is look at the votes:

1.     Ed Reyes (substituting for José Huizar), Pam O'Connor, Mark Ridley-Thomas, Gloria Molina, and Los Angeles Mayor Antonio Villaraigosa abstained on all three votes.
2.     Ara Najarian, Diane DuBois, and Knabe voted “yes” on both substitute motions but “no” on the main motion.
3.     Fasana voted “yes” to his motion and the main motion but “no” to Katz' motion.
4.     Katz voted “yes” to his motion and the main motion but was not in the room when Fasana's was voted on.
5.     Zev Yaroslavsky was conflicted on the Fasana motion and the main motion but voted “yes” to Katz' motion.
6.     Antonovich voted “no” on both substitutes and “yes” on the main.
7.     Wilson voted “yes” to Katz' motion but was not in the room for the other two votes.

So five directors abstained on the entire matter, and there is obvious divisiveness on the part of the remaining eight directors. It takes seven votes of the thirteen to make a decision, which isn’t going to happen if the same split – or a similar one – happens in October.

The fact that the meeting started 49 minutes late is almost inconsequential if decisions can’t be made once the Board is in session …

Yes, there were other matters this month, but none of them generated discussion worth reporting on (unless I was to report on more of Wilson’s brilliant comments and questions, and that gets tiresome after a while).

Quote Of The Month: Katz, during discussion of the advertising contract, reacting to CBS and Titan both attempting to make guarantee offers as part of their comments: “If we’re going to have a bidding war, let’s have it in public.”

Next Metro Board Committee Meetings: Wednesday and Thursday, October 17 and 18
Next Metro Board Meeting: Thursday, October 25

A note about identification of Directors in the report: Diane DuBois, John Fasana, Ara Najarian and Pam O’Connor are City Councilmembers from the cities of Lakewood, Duarte. Glendale and Santa Monica, respectively, and are elected to the Metro Board by the Los Angeles County City Selection Committee, per state law. Richard Katz and Mel Wilson are appointees of Los Angeles Mayor Antonio Villaraigosa, as is José Huizar (one of the Mayor's appointments must be a member of the Los Angeles City Council). Only the five County Supervisors – Michael Antonovich, Don Knabe, Gloris Molina, Mark Ridley-Thomas and Zev Yaroslavsky – and the Mayor of the City of Los Angeles hold ex officio positions on the Board.