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Rewarding Failure 

Streetcars that are too wide, long, and heavy (136 @ $3.5 million per). Bus engines that don't fit and are scrapped (20 @ $116,000 a pop). Manhole covers that take 10 engineers and three months to design (cost: $243,000). Muni's management has produced su

Wednesday, Dec 9 1998
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Page 5 of 5

But Muni already plans on spending nearly $4 billion on capital purchases over the next 20 years, and the agency has some $2 billion in the federal funding pipeline. Muni's operating budget has grown dramatically over the last several years, as has its number of authorized employees. Lack of money is not, actually, at the heart of Muni's long-standing failure.

There are ways to fix Muni. It is possible to negotiate reasonable union work rules that reduce Muni's crippling rate of absenteeism. Muni management can be professionalized, and managers who regularly make illogical, costly decisions can be fired. It is possible to buy quality transit equipment at a reasonable price.

But when employees don't show up to work, and suffer no real consequences, when managers waste millions -- even tens of millions -- of dollars and are not disciplined, when major purchases appear to have been steered to undeserving firms, at some point motivation becomes irrelevant. It doesn't matter, really, whether boondoggles are born of incompetence or something worse. Muni fails because it fails to punish, and even rewards, failure. And Muni will not run well until those who make it run badly begin to be held accountable.

For the San Francisco Municipal Railway to start rewarding success rather than failure, choices would have to be made. Union agreements would need to be changed in ways almost certain to anger union members and their leaders. Top Muni managers -- even and especially those who are members-in-good-standing of San Francisco's Democratic machine -- would have to be judged on performance, rather than politics, and be fired when necessary. Consultants who play major roles in creating boondoggles would have to be let go (rather than recommended for more work). The bad news is that these changes would be politically difficult to make in a city run by a Democratic establishment that has no real political competition and walks arm in arm with admittedly self-interested labor unions.

The good news? The changes wouldn't cost taxpayers a dime.

About The Author

Peter Byrne

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