Posts about GAO

A governance committee, ably led by Mary Hynes of Arlington, has formulated bylaws and procedures for the board which better define its role. This year, after most members turned over and the reports came out criticizing past board actions, the board has indeed started focusing effectively on the high-level decisions that it needs to make to keep Metro running smoothly.

The GAO report says, "These draft bylaws represent a good first step toward addressing some of the concerns discussed in this report but will need to be adopted and then effectively implemented to achieve their desired effect." The report also criticizes past boards for doing a poor job of strategic planning, suggesting the board develop a better plan and then commit to implementing it.

The executives and DOTs of DC, Maryland, and Virginia were waiting to see the GAO report before moving ahead further on structural changes. The Board of Trade report last year suggested removing alternates, giving the governors one extra appointment of their own, creating an added "super-board" above the current board to supervise the board, and changing the jurisdictional veto.

The Riders' Advisory Council, on the other hand, argued that these changes were unnecessary and possibly counterproductive. Its report argued that the problems could be fixed by doing a better job appointing members and by the members developing better policies around these issues. (Disclosure: I was the principal author of the RAC report.)

The GAO took a similar stance to the RAC's report. They wrote:

Our analysis, however, indicates that most of the recommended changes have trade-offs—there are both benefits and drawbacks to them. We compared the various recommendations to leading governance practices, approaches taken by other transit agencies, and the views of board members and stakeholders. Board members and stakeholders indicated that proposed changes to the board's structure and processes—such as eliminating alternate board members, changing the size of the board, or eliminating the jurisdictional veto—have trade-offs, and we did not find consistent support among leading governance practices or other transit agencies that these changes would improve governance.

The [Board of Trade/COG] Governance Task Force recommended that the signatories and the appointing authorities form a WMATA Governance Commission to make improvements to the authority's governance structure and hold the board accountable for its performance. ... Such a commission was viewed by some stakeholders we spoke with as redundant because it would be comprised of most of the same membership that is responsible for appointing the board of directors.

The GAO paid special attention to the federal government's involvement, which includes the General Services Administration appointing a set of federal members. The GAO says that GSA lacks clear procedures for selecting and appointing these members. The GSA replied that while it's true it doesn't have formal procedures, it doesn't think that's interfered with selecting qualified candidates.

Moving forward, this report confirms what's become increasingly clear: WMATA can be fixed without rearranging the organizational structure. Doing that could fix some problems but create others, and would ultimately be a distraction from the work of actually governing better.

Already, we've seen tremendous progress. The NTSB feels safety is improving. Communication has taken huge steps forward with WMATA now tweeting and generally using two-way communication. The board passed a budget that avoided service cuts and without any major acrimony. Local jurisdictions stepped up with needed funding.

Now, we should let the current board and management keep making the strides they have. The executives and DOTs should let this issue rest.

Governor McDonnell did succeed in using the frustration over Metro to let him take away some power from Northern Virginia, giving him a direct appointment to the board who will likely replace Mary Hynes entirely or move her to an alternate position and bump Jeff McKay. Either way, that will be a big loss for Virginian interests, since both have effectively represented their constituents. The legislature should reverse this hasty decision before the appointments are made or renewed at the end of the year.

"When prices do not reflect all these costs, one mode may have a cost advantage over the others that distorts competition," writes the GAO. "As a consequence, the nation could devote more resources than needed to higher cost freight modes, an inefficient outcome that lowers economic well-being."

The report goes on to say, "If government policy gives one mode a cost advantage over another, by, for example, not recouping all the costs of that mode's use of infrastructure, then shipping prices and customers' use of freight modes can be distorted, reducing the overall efficiency of the nation's economy."

The GAO didn't make recommendations in this report but did say that policy changes that make prices align with the true costs of freight shipping would provide a great economic benefit. Less targeted changes, like charging user fees, subsidizing more efficient alternatives, or applying safety or emissions regulations—could be helpful as well. The report acknowledges that "the current configuration of transportation infrastructure can limit the shifting of freight among modes."

After all, we've been building a lot more highways than railroads lately.

Cross-posted at Streetsblog Capitol Hill.

Underground storage tunnels will cost $2.2 billion. To recoup this cost, DC Water started levying a fee on all impervious surfaces on customers' properties, regardless of whether the property is located in a combined sewer area.

Impervious surfaces, such as a house's footprint or a driveway, prevent the ground from absorbing rainwater and slowly releasing it through local springs. Instead, water runs off our roofs, into gutters, down the downspouts, onto a sidewalk or driveway, into the street and then into the sewer. Consequently, storm drains on the street aren't just handling street water, they're also handling the water our homes, offices, parking lots, and driveways dump on the streets.

DC Water is working with the DC Department of the Environment to discount the fee for properties that mitigate their runoff. Until then, we're all paying for our runoff and the tunnels that must contain it.

But is it a fee based on usage, like your water bill, or is it a tax, like a property tax? As you learned in your civics class, no state, and certainly not the District, may tax the Federal Government. The Feds will pay for services provided, such as water and electricity, but they will not pay property and other taxes.

Since this fee is structured to approximate your burden on the sewer system, it shouldn't count as a tax. The Obama administration at first disagreed, arguing it was a tax and that the federal government should not pay.

Most ironically, DC Water's tunnels are being built to comply with the federally-mandated Clean Water Act. In essence, the federal government contributes to the problem, mandates a solution, but refuses to pay for it. This is worse than an unfunded mandate because federal government properties are partly responsible for the problem in the first place.

Without the federal government paying its share, which accounts for 20% of impervious area in DC, water bills for DC residents would soar to compensate for the Feds' "principled" delinquency. One can imagine residents demanding DC Water shut off the water to all government properties; it's hard to stand on principle if it means sitting in a porta-potty.

Congresswoman Eleanor Holmes Norton (D-DC) and Senator Ben Cardin (D-MD) are more diplomatic. They are sponsoring legislation to require the Federal Government to pay.

Fortunately, after a second look, and probably after some hard lobbying, the Government Accountability Office reversed its earlier decision. In a recent letter DC Water provided us, GAO states, "We have concluded that the [Impervious Surface Area] charge is a component of the utility rate customers pay for water and sewer services." That is, the impervious area charge is an integral part of financing a sewer system, that by law must comply with national water quality standards.