report. my name is bob kerrey, the chair of the committee. daniel was a member of the committee, and he will be presenting as well. i am going to be making some general comments, and his will be more specific. the purpose of the civil grand jury is to represent the interests of san francisco citizens to ensure their tax dollars are being used to their maximum benefit. in issuing its report, the jury enters factual accuracy of the investigation, factual support for its findings, and a logical connection between its findings and recommendations. although we talked to a broad

range of people, including current and former mta's employees, citizen groups, elected officials, industry experts, it is important for me to say that all factual information that was in the report were based almost solely on interviews with mta officials and with documents they provided us. having said that, i will just share a personal note. when i joined this committee, i knew virtually nothing about the central some waubway project. everything that i have learned has come from those interviews and documents. mta responses to the report

indicates disagreement with some of the findings and recommendations but do not seem to suggest that there are any factual errors. we spent an awful lot of time trying to make sure the information we got was correct and verified to the extent possible. based on extensive media coverage and public statements from elected officials, it appears there has been some misunderstanding of the report's content. i would like to clarify a couple of points. there was nothing in our report recommending a surface street solution there was nothing in our report suggesting other than a chinatown destination. there was a recommendation to

change the route to better serve the financial district, but the termination point would still be in chinatown. also, the report does not reject the utility of a subway, but it does reject the design as it i6 exists today. another point about the report in general, as much as it is critical about the subway design, it was equally critical of current community performance and funding. we will be talking more about that in a minute. at this point, i am going to turn the presentation over to daniel. >> good morning, supervisors.

thank you for your time. we will not be summarizing our report this morning. it is a relatively lengthy report. rather, we are choosing to focus on nt a's official response to our findings and recommendations. we felt the response suggested a rather dismissive attitude towards our findings and recommendations. while we do not have time to discuss all of their responses, we would like to highlight what we thought were the most dismisses. there were numerous instances where we felt that mta's response indicates they do not agree with any of the facts we put forward, rather, they disagree with our findings. however, there does not seem to be any logical basis in fact for their disagreement. as a first example, i call your attention to bring jury finding number two, which is that muni had done a poor job meeting or

hearing the requirements in proposition e, specifically in regards to 85% on-time service. the response indicated the agency disagrees partially with this finding, and they stated, the mta has attempted to meet many of the service standards and will continue to work to improve service. mta's response offers no reasoning as to why they disagree partially with the finding. the offer no facts to suggest they have done a great job of meeting or nearing the requirements of prop e. in fact, their own numbers show a day struggle to break away from a 75% on service rate. our finding was not critiquing muni's attempt to deliver on time service, because that is not within citizens -- not what the citizens are most concerned with. they are most concerned with results.

there were five other examples that we will not be discussing this morning. in particular, findings 5, 7, 9, 28, and 36 all have the same problem of no apparent object of reasoning for the findings. the next problem we had with the response was, some of the responses do not address our recommendations and. in particular, recommendation no. 2, the grand jury recommended an independent consultant to see whether the on time requirements of proposition b as well as muni's own internal goals are realistic. mta's responded saying they would not rest -- implement this recommendation as it was not warranted. the city charter already requires them to conduct such a audit by an elite. however, the audit the site looks at whether the mta has or will meet the proposition e

requirement. the audit that the civil grand jury requested was not looking at whether they had met the requirements but whether the goal that mta said and the voter mandated requirement are even realistically achievable at all. that is not addressed by the audits a site. we have two more examples of their response to recommendation 7 and 8 then do not adequately respond to our recommendations. the next problem we had with the response is, we are dealing with mta miscommunications and factual inaccuracies. in particular, underfunding 15, the civil grand jury found there would not be enough light rail vehicles for rollout of the central subway in 2019. as background, in preparing this report, we interviewed mta officials and talk about the problems that plagued the rollout of the t-three service.

one of the problems they had was a shortage of available vehicles to meet peak demand. our research for this report leads us to believe the same problem will occur with the central subway. mta disagree with this finding and referred in their response to a document that they claim shows this will not be the case. it was a document that they have transmitted to us on the jury. however, the documents they referenced only state the number of vehicles required solely for operation of the central subway. their response does not address whether there will be, in fact, enough light rail vehicles available for the j, k, l, m, n, and shuttle lines. we have a chart at the bottom from the mta. it was an appendix to a large group of documents we were given. it looks like a total fleet side demand and procurements needed

-- and we cut out the section on light rail vehicles -- set up by fiscal year. we cut out the intervening years from prison until 2018. if you look at 201832019, that is when the central subway is slated to open. it has currently been pushed to a january 19 opening. the numbers are hard to make that on the slide, but their numbers project they will need a peak demand of 179th light rail vehicles for the fiscal year. however, the fleet size plan will only be 175 vehicles, leaving a deficit of four vehicles system-wide. looking at this document, it appears to ever wrote the mta response claim that they will have enough lrv's in this fiscal year was not aware of this predicted schedule. the next time i would like to

draw attention to his finding 25. and richard found a lack of care in the mta is communicating of correct and accurate information. the mta disagrees wholly with this finding, responding the review documents with careful attention to detail. however, they did not address the three specific examples we cited in our report, and additionally, the response of themselves contained inaccuracies. in recommendation 26, the grand jury was discussing which populations will be served by the central subway. in its response, mta cited six large tech companies that will be served by the new central subway route. of the six companies, three of the company they named are nowhere near the proposed route. we put together a map.

just to better illustrate this. the red line is the proposed route for the central subway. you can see an orange flag at the top. that is one market street, the location of salesforce. in the bottom left corner, around market and ninth and 10th is twitter. i know they are currently located closer to fourth sp street. however, they announced they will be moving to market street in 2012. clearly, they will not be next to the central subway, if it opens in 2019. finally, they mentioned zynga, which appears to be not new the new extension. supervisor farrell: just a quick question. thank you for your work. obviously, this is an lightning in a lot of ways. in fairness, salesforce will be

moving as well, to mission bay, right across from the subway. i just want to make sure you know that. >> thank you and i apologize for that oversight. however, mission bay is not near the central subway line. it is near the t-3rd line. if i could interrupt -- supervisor campos: i know there is a lot of interest in this, but to be able to hear the presentation and the exchange, i simply ask that you allow us to continue the discussion. supervisor farrell: i think part of what gets lost in this discussion is this is also an extension of the third street rail line. when the talk about the continuation of the line -- i

only looked at it and saw it because the extension goes all the way down there. i just want to make sure that was clear. out of all fairness, if we are going to move twitter and so forth. >> the talk was about who would be served by the new central subway, not who was also on the t-3rd line. you can get into the urban planning of whether connections throughout the city will be better by a route that goes along fourth street, but looking specifically at companies that will be helped along a route along fourth street, as opposed to third street, it is not clear how being near mission bay will be helped by the fourth street location. there are some other examples -- supervisor farrell: zynga also signed a 200,000 square foot center which is much closer to what you're talking about, to

what you have here. kerr offices, you are right, it is where they are marked. but they will have thousands of employees much closer to where you described. >> 8 street is still four blocks away. >> sure. you can walk that. >> ok. with that, i would like to turn it back to the chairman. >> in summary, the current operation of environment is very much supported in terms of funding, city priorities, etc. and because of that and other issues, muni's on-time performance is meeting no one's expectations. not the mta's and certainly not our citizens. the central subway does nothing

to fix that environment. it is a hugely expensive system that is being implemented by an organization that does not have a good record of bringing projects in on time or on budget. it leave the city liable for any cost overruns. in our opinion, it has several major design flaws, it adds to the operational cost of the system that is already underfunded, and provides, at best, marginal improvements to the entire system. based on these factors, to allow the project to go forward as currently defined, would be doing a major disservice to the people of san francisco. that is the end of our

presentation. if you have any other questions -- supervisor campos: thank you both for your presentation. any questions before we hear from the mta? president chiu? supervisor chiu: just to clarify, what we are reviewing is a resolution around this report, but this specific findings and recommendations that were asked to review, from my read, what has been asked of us does not specifically have to do with the central subway. it has to do with issues of longer-term service and financing. is that correct? we are not really actually talking about the central subway and the resolution you have asked us to consider. >> in general, you are probably right. supervisor chiu: i also want to make that clear for the public. this resolution asks us to consider different elements of how muni and the mta are

functioning but does not -- you are not asking us to delve into the specifics on the central subway details that you have laid out in your report. just wanted to clarify. >> if i could add, that is why we chose not to focus on the substance of the report and more p,on mta's responses, the way y are dealing with the project, if that makes sense. supervisor chiu: honestly, it does not. >> then forget what i said. supervisor campos: 4 members of the public who are here watching, the findings that the resolution is asking the board of supervisors to opine our findings 3, 4, 5, 6, 11, 12, which happened to do with whether muni is providing adequate service, it issues around its financial problems, so general findings that are not

specific to the central subway project. the recommendation that rearrest to opine on our recommendations 3, 4, 8, which, once again, relate to findings that are not specific to the essentials of life. with that, i will now ask ed reiskin, the new executive director of the mta to speak. thank you for being here. i do not know how many days on the job it has been for you, but we will commute to the government audit and oversight committee. thank you and your staff for your work on this. >> good morning, chairperson campos, members of the committee. director of transportation in san francisco. a pleasure to be here to provide you with some factual information about phase two of the t-third light rail project. i want to start with a bed of

context and overview. the main context we are operating in is that the region is going to grow by 1 million people in the next generation. the city needs to absorbent and accommodate a lot of that growth. something that you know well, mr. chairman, from your seat on the metropolitan commission, san francisco's need to build capacity in its infrastructure, particularly its transportation, is critical to our ability as a city to accommodate that growth that is coming. the t-third light rail, we are lucky in that the city started 20 years ago planning for this. 20 years ago is when we recognized that growth in san francisco would be occurring, a significant amount along the eastern side of san francisco

through mission bay, into south of market, into chinatown. it was 20 years ago that the people of san francisco and its leadership came together and began what has been a very long and thorough and rigorous process to get us to where we are today, and that is a process that has had extensive review, a technical review, environmental, transportation review, the extensive committee of reach, has been through a complete environmental process and has been heavily vetted by the federal government from whom we are seeking to leverage our investment in phase one in order to deliver on pace to -- phase 2. i may not be the foremost expert with regard to public works in san francisco, but having worked a little bit in the field here, i would say this is the most thoroughly vetted, analyzed and

reviewed public-works project probably that the city will ever have delivered. i say that with reference to the fact that the question being raised in this report, while all good questions, are questions that have been asked and answered. these issues have been raised and addressed years ago. we are at a stage in this process where we need to move forward as a city. we were serenaded previously with regard to san francisco general hospital. maybe there is a good analogy there. there are fair questions to ask. should we build a new hospital? maybe we should join with uc and mission bay. those are good questions and those questions are being asked. it is now time to move toward and all the hospital. the same goes for where we are

with phase 2 of the t-third light rail. should we be on third, fourth, shallow subway, deep some way, how should connectivity with the rest of the system be? how will it impact operating cost? should we do the project at all? all good and fair questions. they have been asked, answered, long ago. we are in the ground, we are ready to enter heavy construction, and it is time, i believe, for us to come together as and resistance, and send a message to the people of san francisco and federal government, that we are ready to leverage that investment we made in phase one to begin the next phase. we are ready for the maybe tens of thousands of jobs this will bring us. most importantly, we are ready and in need of the capacity that this system will bring. so that is where i believe we

are. if current a challenges were the threshold for determining capital investment for the next generation, we would never make capital investment. there is no question, muni and the mta have for challenges, as do the rest of government, and we need to work through those, we need to be held accountable for those, but today's operational challenges are not a reason not to invest in the future of san francisco, and that is what this project is. we did respond point by point to every finding and recommendation. we are not going to go through the entire response today, but we do want to bring everyone up to speed on exactly where we are in addressing the main themes of the recommendations in the report, and to do that, i would like to ask the gentleman managing the central subway project to walking through a

brief presentation. supervisor campos: thank you. >> chairman campos, a good morning. john fungi, central subway program director. the t-line has benefited from over 20 years of planning initiated with the motorman did in 1989, at th. the central subway is one of the four corridor that has entered into design and construction. finally, the reaffirmation of the efforts established in the late 1980's and 1990's with the

passage of proposition k, which was approved by 75% of the voters and issue with a 30-year transportation expenditure plan. the t-line, which encompasses phase 1 -- which is an operation as the 2007 -- and the extension of its e-line initiative with an environmental review in 1999. program has had 350 community meetings where the various questions that were asked have been answered, and dealing with the alignment to the depth of the alignment, transportation community that the line will serve. has gone through extensive review that began in 1999 and concluded with the planning approval in december 2008, and finally nepa approval from the federal government in november

2008. the key steps to the central subway project, past 42 recent times -- -- fast forward to recent times, the agency is in the process of acquiring the real estate. we will close escrow on the chinatown station property as of november 1. we have begun three major construction contracts that will deliver the seven construction -- the seven construction contracts that will deliver the program. we have entered into final design, have awarded three major design contracts. the current state of final design completion is 90% complete. also, we have received a letter of no prejudice approval from the fta that will allow us to consider advanced construction which will allow was to put forth the utility contracts in

construction and award the requirements for the tunnel contract. a milestone for the project was submission of the full funding grant agreement application to the federal government on september 19 of this year. that represents significant years of hard work from the city community as a whole, that will capture and leverage that have said sales tax leverage that the city began in 1989, to essentially require a $982 million that the federal government had set aside for the delivery of the central subway program. the overall online, 7.1 miles, that would be the first north- south real connection for the city in over 50 years, connecting the southeast sector of the city to the business, civic, and cultural centers of san francisco with two lines

that will serve the t-line. a long line that will serve the entire corridor from little hollywood in the bayview all the way to chinatown and what we call the t-line short line, that will turn around in mission bay to capture the significant growth that is currently under way to serve the mission bay and build out of the bayshore community. central subway is located to essentially capture the major regional connections for the city of san francisco, having direct connectivity to caltrain, bart, and muni metro. it serves a bit and the population where 60% who live along the corridor rely on muni for their transportation needs. in terms of the 2011 update, the

central subway project has been a big advocate of putting local businesses and seven systems to work. we have awarded our first two contracts to a local firm, employing local folks and representing a small business enterprise goal that exceeded 35%. the central someone has also benefited by being listed in president obama's annual budget. $200 million has been proposed for the president's budget that will be received by the central subway project. we have released in february of this year our largest contract for the program, the tunnel contract, which we awarded in june. that contract was awarded to healy in the amount of $233 million.