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The San Diego Association of Governments has been plagued by scandal ever since Voice of San Diego revealed problems with its revenue forecast model, which was put forward to support Measure A, a sales tax hike on the ballot last fall.
Recently, an independent investigation into the SANDAG revenue forecast for Measure A found that “by failing to adequately explain how and why it overestimated the Measure A revenue forecast, SANDAG lost employee morale and forfeited the public’s trust.”
While this statement is largely an opinion of the investigators, it is supported by a thorough and impartial analysis of the events that unfolded before, during and after it became apparent that the revenue projections sold to the public in 2016 were grossly overestimated. Making an honest mistake is one thing; ignoring internal dissent that something is wrong, and allowing the public to vote on Measure A based on a broken, outdated system that virtually no one knew how to program internally is a breach of public trust.
In order to improve employee morale and restore the public’s trust, the public transportation agency must make significant changes, and those changes must start at the top.
Here are a few steps SANDAG can take to help gain back the trust of the public.
Restoring the public trust requires SANDAG to be fully transparent with projected revenues, projected construction costs and the status of all projects. TransNet was a sales tax increase approved by voters in 1987 and extended in 2004. The internal investigation was limited in scope to matters concerning Measure A. During the course of the investigation, however, several people expressed concern about a potential $17 billion shortfall in TransNet’s revenue forecast due to rising construction costs that SANDAG may have failed to disclose. The public and SANDAG board of directors, which I sit on, must have confidence that the numbers publicly stated by SANDAG leaders are accurate – a level of trust that, right now, frankly does not exist. Earlier this month, the SANDAG board authorized a further investigation into the TransNet figures.
In an effort to properly create and maintain accurate numbers for planning, SANDAG must right-size the organization so the data teams are properly staffed with appropriate personnel who understand the economic models used to create our long-term planning forecasts. The investigation concluded that a combination of turnover within the data teams, inadequate staffing, lack of training and deficiency of expertise contributed to the perpetuation of the forecasting error and inability to pinpoint why the model was inaccurate. SANDAG will continue to use revenue projections models for long-term planning, so we must ensure the teams responsible for this important task have all of the resources required to get the job done right. Businesses go through these types of restructuring exercises; SANDAG can too.
Until recently, neither the public nor the SANDAG board was made aware of any internal disagreements among the staff about the reliability of the revenue forecasting model. The investigation found that staff had been pushing to move away from the model as early as 2011. While the staff closest to the model were encouraging management to explore other options, management refused or ignored their concerns. Furthermore, although staff members became increasingly convinced the model was forecasting unrealistic projections, leadership refused to raise their concerns to the board. Eventually, staff stopped sharing concerns with the SANDAG leadership team because their previous concerns had not been addressed. If SANDAG leadership fostered a culture of open communication and collaboration with mutual trust and respect, it is very possible the original error would have been discovered much sooner and a more accurate projection would have been used.
Addressing these three areas are necessary to rebuilding the credibility of the organization, improving employee morale and restoring the public’s trust. SANDAG must transform itself into a new kind of organization, ready to deal with 21st century problems, and make restoring the public trust its No. 1 priority.
This transition is not possible with the current leadership remaining in place. The executive director of SANDAG, Gary Gallegos, has provided a tremendous service to the San Diego region for the past 16 years. He is highly respected throughout the state for his professionalism and expertise in transportation.
To be clear, there is no evidence to suggest Gallegos intentionally mislead the board or the public about Measure A. But findings from the report indicate that many shortcomings of the agency were the result of a management team that was unresponsive to legitimate concerns expressed by staff, too reliant on the expertise of a single individual and failed to satisfactorily address the initial inquiries surrounding the forecasting error – even taking steps that created the appearance of impropriety.
Due to pressure from the public and the SANDAG board, Gallegos announced his resignation from SANDAG effective on Aug. 18. This decision is the right move for the agency and the public. SANDAG must now change its policies, processes and people to rebuild the public trust.
Richard Bailey is mayor of Coronado and a member of the SANDAG board of directors. Bailey’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.