SMART rejects changes recommended by grand jury

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Officials overseeing the Sonoma-Marin Area Rail Transit authority have strongly rejected findings by a Sonoma County grand jury that called on the agency’s board of directors to improve its financial oversight and its communication with the public.

The recommendations stemmed from a highly critical grand jury report that faulted the agency for not being upfront about risks to its tax revenue at the outset of the recession and called out SMART’s board of directors for delays in delivering the commuter rail project promised to voters in 2008.

In its official response this week, the SMART board disagreed or partially disagreed with all 13 of the findings in the grand jury’s report, released in July. The board also said it will not implement seven of the report’s eight recommendations, calling them unwarranted.

A SMART official who drafted the response said the grand jury missed the mark with its findings. The SMART board, made up mostly of elected city and county officials, has adeptly managed the rail agency through tough financial times, the official said.

“We’ve done really well, and I don’t think (the grand jury) got all of the information,” said Jim Eddie, who along with fellow board member Barbara Pahre authored the agency’s response to the grand jury.

The response offers a point-by-point rebuttal to each of the grand jury’s findings and dismisses its recommendations as being either out of date, irrelevant or inaccurate. It rebuffs a grand jury that had picked up on many of the criticisms that SMART foes have leveled against the agency, specifically that SMART has understated its financial woes since the recession, that its directors lack detailed knowledge of the rail project and, due to those problems, that the agency has struggled to deliver the project that it outlined to voters six years ago.

Martin Jones, foreman of the newly impaneled Sonoma County grand jury and a member of the group of jurors that produced the SMART report, said he was dismayed by the agency’s response.

“It’s disappointing to read,” he said. “We stand by our findings. They’re well researched, and they are fact-based, objective comments from a well-informed sector of the community.”

SMART General Manager Farhad Mansourian declined to comment on the grand jury report or SMART’s response, saying it was a matter for the agency’s board of directors.

The grand jury report, “The Train Has Left the Station: Five Years Later — The Outlook for SMART,” summarized a yearlong investigation into the agency behind the $660 million project. The report was based on interviews with SMART staff and board members as well as analysis of financial documents.

It pointed to the large drop in SMART’s tax revenue during the recession, saying the agency failed to inform voters in 2008 of such risks, which caused a funding gap that led officials to downscale the 70-mile, Cloverdale-to- Larkspur project to an initial 43-mile Santa Rosa-to-San Rafael segment.

SMART, in its response, said that few people anticipated the economic downturn, but the agency did not directly address the allegation that its board had failed to advise voters of the recession’s impact on its project. Voters in 2008 approved the quarter-cent sales tax that primarily funds the project.

“This finding is stale in that it relates to six-year-old events and does not involve actions of current management,” the response stated. “This finding involves events that occurred long before the 2013-2014 grand jury was impaneled and does not relate to the current method or system of SMART’s operations.”

SMART also rejected a grand jury finding that the initial segment expected to operate in 2016 will not satisfy what was promised to voters.

“The recession affected SMART just as it did other public and private entities, and the voters themselves,” SMART stated. “Responding to unexpected financial constraints, SMART acted prudently in deciding to phase the construction of the SMART rail system.”

The board said it disagreed with a grand jury finding that SMART board members have “heavy time commitments resulting in a lack of sufficient attention for SMART and an absence of the effective oversight voters expected.”

In its response, SMART said that it is common for officials to sit on multiple boards and that having board members who serve on boards of other transit agencies helps in coordinating resources for the regional transportation network.

The grand jury recommended that SMART engage an independent economist to help forecast future sales tax revenue, provide a comparison between the agency’s original financial plan and the current outlook, and provide an annual update to its long-term financial forecast.

SMART rejected the suggestions. Eddie said the agency is focused on construction and should not be sidetracked by doing long-term financial forecasting, among other grand jury recommendations.

“On the financial side, we’re doing the best we can with the money we have,” he said. “Right now, our priority is to build the railroad. We don’t need to spend money on a future financial outlook.”

SMART did agree with one recommendation: that the agency’s strategic plan include a forecast of operating and maintenance costs associated with future operation of the rail network. SMART’s response noted that the step has not yet been implemented.

Jones, the grand jury foreman, said the panel’s recommendations were intended to be constructive and to help make the rail authority function more efficiently.

“I am surprised that the SMART board would not choose to explore some of these recommendations further,” he said. “The lack of acceptance of anything indicates a desire to continue with the status quo.”

You can reach Staff Writer Matt Brown at 521-5206 or matt.brown@press democrat.com.

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