Thursday, May 2, 2013
When Matthew Tucker came on board as head of the North County Transit District four years ago, the operation faced major budget cuts threatening its train and bus service.
Tucker cut 433 of 533 jobs, contracted nearly everything to private companies and took the bows for saving the agency.
inewsource has spent months examining contracts, scrutinizing budgets and interviewing dozens of people inside and outside transit agencies. We found that the drastic changes at NCTD -- without adequate oversight -- had their casualties.
In its ongoing investigation of the North County Transit District, inewsource has found that decisions made at the top have had serious consequences on the ground.
Matthew Tucker started his new job in Oceanside in January of 2009, moving west from Virginia, where he had run the state’s public transportation agency. Before that, he’d been in charge of transit operations in San Jose at the Santa Clara Valley Transportation Authority.
Tucker was used to facing down budget crises like the one he was inheriting, and he knew his solution -- outsourcing -- would be unpopular among the agency’s 500-plus employees.
“I said to folks, ‘Here’s a suggestion box,” he later told a reporter, “If you come up with an idea better than the ideas I have, let us know about it.”
Apparently no one did, and Tucker morphed the North County Transit District from a public transportation agency into what he described as a “contract-management” agency. Its payroll went from 533 employees to 99.5. Private contractors now drive buses, maintain vehicles, and provide other services.
The San Diego County Taxpayers Association honored NCTD with its Golden Watchdog Award for the district’s “Sound Fiscal Decision Making” during the crisis. Tucker was profiled in the local papers, lauded in transit publications, and given a $20,000 bonus — in addition to guaranteed pay raises over the next few years — by the district’s board of directors.
Tucker’s performance evaluation is on the board’s agenda today behind closed doors. His salary was scheduled to increase last December to $249,000, about double the industry standard for running an organization the size of NCTD.
Today, it’s unclear exactly how much the outsourcing has saved the transit agency. And there are many in the industry who question whether it was worth it.
North County is still ultimately responsible for making sure the trains and buses run on time, meet consumers’ needs, and are safe.
That’s the part that hasn’t gone so well.
Hours in the dark
One of the most chilling indications that contract oversight was a problem came in August 2012, when auditors found the agency was failing some of its most vulnerable clients -- the disabled.
NCTD had outsourced its services for the disabled a year earlier to a business called American Logistics Company, based in Utah. This “paratransit” service is required of all public transit agencies by the federal government. Within North County, it’s called LIFT. On-call buses shuttle disabled passengers who can’t make it to bus stops or are unable to navigate the public transportation system.
The audit, commissioned by NCTD, found that disabled passengers throughout San Diego County waited hours for buses after their workday, and were dropped off hours before their employer ever opened their doors. This was a liability for employers and frustrating for passengers.
Dispatcher attitudes were “horrible,” according to one supervisor at a frequently-visited LIFT destination.
The audit found a long list of problems, among them: NCTD didn’t monitor American Logistic’s drug and alcohol testing for its drivers, had no supervision in place for tracking bus performance, and wasn’t receiving full reimbursement from the state for providing trips to Medi-Cal recipients.
There were 13 key findings altogether.
The auditors never reached anyone from American Logistics Company during the entire week of of their inquiry.
In response to the audit, North County drafted an internal manual, distributed a “Rider’s Guide” to LIFT customers, and hired a new administrator to oversee the program.
According to two representatives from local businesses whose clients depend on the LIFT service, on-time performance has since improved.
Yet the root problem — contractual oversight — reared up again within the agency only a few months later.
This time, it involved men with guns.
In October of 2012, a private security guard with military history asked inewsource to look into what he called a Homeland Security issue, one he said had been ignored by NCTD for years.
The guard worked for Universal Protection Service, one of the few private companies in the country tasked with protecting a public transportation system.
It’s a dangerous job, and over the last few years, officers have been shot, beaten, and held hostage while on-duty. They have said again and again that they don’t have adequate training or equipment for the job at hand.
NCTD pays $3.5 million a year to Universal to provide a couple dozen security officers who patrol the district’s property, arrest and detain criminals, respond to emergencies along the rail lines and who aid local law enforcement during crises.
Universal took over the security contract last May from a company that had provided officers to NCTD for decades — Heritage Security Services. Universal kept all Heritage employees in their same positions, changing the organization in name only.
Ken Moller, who was president of Heritage Security Services and is now Universal’s Regional Vice President, wrote an email to all his officers in 2010, addressing their concerns.
“These deficiencies were brought to the attention of supervisors in the past but they apparently fell on deaf ears,” Moller wrote, adding “It is our intention to immediately correct the issues...”
Moller said training would be given, equipment would be provided and standards would be upheld.
However, inewsource found little had changed in a months-long investigation called “Security Breach,” which was published in February.
As part of its report, inewsource cited a state investigation conducted in 2012, which found severe deficiencies in the training of the officers, in equipment, and in safety protocols. The state fined Universal tens of thousands of dollars, although the penalties are still under appeal. According to an official, at least two more cases concerning Universal have been opened since the start of 2013.
North County’s Chief of Security, Tom Zoll, declined to comment throughout the course of the inewsource investigation.
Multiple phone calls and emails to Moller at Universal went unanswered.
Tucker — who cut the security budget almost in half during his first year with North County — wouldn’t speak to inewsource during three months of fact-finding. He did respond after “Security Breach” was published, saying the issue was under internal investigation. A district audit has since confirmed the seriousness of issues reported by inewsource.
Within a month, NCTD was in the hot seat over another contract. This time, the problem would affect thousands of people who rely on public transit.
On March 9, 2013, NCTD took the SPRINTER light-rail service, serving passengers between Oceanside and Escondido, out of service due to bad brake rotors. Buses are shuttling customers while the worn parts are replaced.
During his outsourcing, Tucker contracted out the maintenance of the SPRINTER vehicles to a private company, which then subcontracted out to another private company.
Richard Berk, the lead engineer with NCTD on the project, saw the problem coming years ahead of time, as did Berk’s colleagues within the private industry. Berk said he prepared for the inevitable by working with the contractors and suppliers to have the specially-designed parts delivered in time.
But he didn’t track his work in writing, and when the SPRINTER was sidelined, Tucker and others at NCTD placed the blame entirely on Berk, a man who spent years at NCTD and who is respected by his colleagues throughout the industry.
Berk resigned on March 1, a week before Tucker made the announcement that the SPRINTER would be shut down for months.
In an interview with inewsource yesterday, Tucker lay fault with the contractors who manufacture the train and maintain it.
“Ultimately, the responsibility is Bombardier’s. We hired and paid them for maintenance, they should have made that happen,” Tucker said. He called Berk a “distraction” for the media.
“...The bottom line of it is we pay Veolia and Bombardier for maintenance,” Tucker said.
NCTD has not announced a date when the SPRINTER will be up and running again.
As head of the North County Transit District, Tucker can award contracts valued at up to $100,000 without going to his board of directors.
In Tucker’s first four months in office, NCTD awarded more than $1.7 million in consulting and “On Call” service contracts to 13 agencies and consultants — only one required board approval.
Two of those involved his former colleagues at the Santa Clara Valley Transportation Authority — where Tucker was Chief Operations Officer.
One $50,000 contract — not put out for competitive bid — was given to the former Policy and Administrations Manager at Santa Clara.
Tucker’s response: “She was an individual who had retired and come in to assist.”
One $100,000 contract was awarded to an international firm whose Business Development Director was Tucker’s boss at that same agency.
Tucker’s response: It was “a competitively bid contract from a major international firm Hatch Mott McDonald, and you say, ‘do I view that as a conflict of interest?’ No.”
Tucker added that to imply awarding the contract was a conflict of interest would be “pretty malicious and defamatory.“
Examples of other spending include:
$10,000 on a national campaign in 2011 to “leverage national media coverage into sustained interest in the North County Transit District’s operations.” The campaign aimed to highlight the “strong leadership and decisive action of NCTD’s Board of Directors & Executive Director Matthew Tucker.”
$30,108 to Mundle & Associates in January of 2012 to conduct a “mock audit” to prepare for North County’s Triennial Review by the Federal Transit Administration. The review is an important evaluation for agencies that receive federal transportation funds.
Mundle & Associates found several deficiencies. Tucker then asked the board to quintuple the contract to $157,536.
Months later, the FTA conducted its review and found more deficiencies than at any point in the district’s history — including the misuse of more than half a million dollars of federal grant money set-aside for preventative maintenance.
Editor’s note: Outsourcing of SPRINTER maintenance had already occurred when Matthew Tucker was hired as NCTD executive director.