The difference between AC Transit and BART is much more than the difference between buses and trains as alternative modes of transportation. From our point of view, the most important difference is the political consequences associated with the choice of either technology. In Chapter 1, we discussed the significance of social complexity for organizational action, and we compared two strategies for coping with an uncertain world. In Chapter 2, we contrasted the technological expressions of those two strategies: the buses of AC Transit and the trains of BARTD. It was suggested that, technologically, BARTD could not avoid encountering resistance and that, organizationally, the District appeared ill-equipped to cope with it.
In this chapter, some of our predictions are submitted to partial testing by interpreting three instances of conflict between BARTD and some of the publics with which it interacts. These examples were culled from a list of conflicts between BARTD and parts of its environment. The list itself was generated by data from over 50 personal interviews with senior executives and directors Of the District and with representatives of various publics within BARTD's service territory. Three examples were selected: the Berkeley subway controversy, BARTD's financial crisis, and the conflict over advertising.
The Berkeley situation and the financial crisis are highly revealing. Not only were they mentioned by nearly every respondent, but there is an abundant supply of documentary evidence upon which to draw. Furthermore, each case is illustrative of a different period of time and a different part of the BARTD environment. The Berkeley controversy, which exemplifies some characteristics of the District's relationships with cities, took place during the mid-1960s. The financial crisis, which involved both the state legislature and a part of the business community , occurred during the middle-to-late 1960s.
The third example, advertising, was selected because it involved the general public. As the events were transpiring in mid-1971, I witnessed most of what took place and talked with several of the principals while the issue was fresh in their minds.
Although the conflicts are intrinsically interesting, we shall be more concerned with the process by which they were handled than with the substantive issues raised. How did the conflict arise? How did the District respond? How might it have been different? Can any connection be made between the particular technology and the response to conflict?
Although the outcome of the November 1962 bond election authorized BARTD to proceed with the planning and construction of a rapid transit system, the exact details of that system were not specified. Because the Composite Report is not a legal document, it can be viewed only as a general statement of BARTD's intentions. It remained for the District and the communities within it to determine jointly such matters as route alignment and location of facilities. This intent is clearly implied in Section 29039 of the BARTD Act:
The board of supervisors of a county or a city and a county, or a city council of a municipality having territory located within the district may file a request for a hearing before the district board. ..as to any proposal for fixing the location of facilities by the district. ...
The most effective use of this provision of this act was made by the city of Berkeley regarding the placement of the proposed rapid transit facilities.
The feasibility study, Regional Rapid Transit, indicates that rapid transit facilities in the city of Berkeley were to be aboveground, aerial or elevated.1 In 1960, however, the Berkeley City Council adopted Resolution No. 38,092, which requested BARTD to place all its facilities within the city limits underground. The District staff's response, which was later ratified by the board of directors, was negative. The substitution of 3.3 miles of subway for elevated facilities would have allegedly cost approximately $50 million, far more than had been originally budgeted for Berkeley.* Moreover, Berkeley would have received a disproportionately large share of the funds available for rapid transit in the East Bay. Finally, if BARTD acceded to Berkeley's wishes on this matter, it would have been obliged to grant similar requests from) other cities. This would have meant curtailing the system.
The Composite Report indicated a change in the plans for rapid transit facilities in Berkeley. There was to be a short stretch of subway plus an underground station in the central business district. The remaining two miles of track and two stations were still to be elevated.3 Nonetheless, Berkeley voters supported the BART bond election in November 1962.** At that point the issue had not yet been joined.
The Transit Committee of the Berkeley City Council, composed of Mayor Wallace Johnson and Councilmen Wilmont Sweeney and Joseph Bort, persisted in their efforts to get underground facilities within the city of Berkeley.*** In order to determine the comparative costs of subway versus elevated construction, Berkeley requested estimates from BARTD in July 1963.
The District presented its cost estimates to Berkeley in March 1964. The difference between subway and elevated construction costs was astounding: $10 million versus $2.5 million per mile. Johnson reports that he then requested a conference with BARTD's engineers in order to understand the bases upon which the cost estimates were made. Johnson's version of that "conference" is revealing:
After the amenities I opened the discussion with a query addressed to BARTD's chief estimator, "In studying the figures presented to the City Council, I notice that the cost of trench support ... is $3.2 million per mile. This is more than your estimate of the total cost of elevated construction -- $2.5 million per mile. Would you be able to give us a breakdown of how you arrived at this trench support cost figure?"[Estimator.] "I don't think we have to explain to anyone how we arrive at our estimates."
"But, if we can't discuss the components of these costs, how are we going to form a judgment as to the validity of the figures?"
[Estimator.] "I've been estimating for the Corporation for over ten years, and I think I know what I'm doing."4
In brief, the conference was never held.
Berkeley then embarked upon a two-pronged strategy: (1) a visit to Toronto and Montreal to study the costs of subway construction in those two cities, and (2) a search for some means of gaining BARTD's attention to and consideration of Berkeley's request. The latter was accomplished by the aforementioned Section 29039 of the BARTD Act. Berkeley requested, and was granted a hearing in May 1964. Three months, 20 sessions, and 2,285 pages later, the hearing was concluded.
The result was a "tie." BARTD's estimates of construction costs were approximately twice as high as Berkeley's ($22 million versus $11 million), but the District's board of directors voted unanimously against accepting Berkeley's figures. (Johnson's description of the hearings is analogous to that of a political trial held in enemy territory and the futility of "justice" thereof. The BARTD board, says Johnson, has always expressed complete confidence in its engineers, and I have been unable to find any evidence to suggest otherwise. Yet, he implies, since there is rarely an engineer appointed to the board, the directors are really not technically qualified to make an informed judgement.)
Still, Berkeley pressed its desire for border-to-border subways. Bay Area newspapers noted the wide divergence between BARTD and Berkeley cost estimates. They also reported that Berkeley was willing to look into the possibility of financing the additional cost of subways. The confusion surrounding the issue favored the Berkeley position in the sense that what had previously been an invisible controversy had suddenly become highly visible.
The uncertainty regarding the dispute doubtless aided Berkeley to execute a contract with the District on October 22, 1964. Some of the specific provisions of the document are:
As Johnson observes, however, the most significant aspect of the contract was that Berkeley had become equal to BARTD in status. No longer would Berkeley be the petitioner and the District the decision-maker. The contract made Berkeley a peer of BARTD. Between the execution of the BARTD-Berkeley contract in October 1964 and the scheduled bid-opening in July 1966, the District was beset by cost-estimating difficulties in connection with the transBay tube and the downtown Oakland subway project. Partly as a result of these difficulties, BARTD wanted to make some changes in its contract with Berkeley. Specifically, the District wanted to divide the central subway portion of the Berkeley line into three segments (both bids and contracts) rather than one segment, as previously designated. According to BARTD, the estimated cost of the project had more than doubled in a period of 16 months, and the District apparently felt that this was too large a project to elicit a satisfactory number of low, competitive bids.
On February 8, 1966, BARTD informed Berkeley of new cost estimates for the city's north and south transit stations. Whereas the previous estimate had indicated that a subway station would cost $2 to $2.5 million more than an elevated station, the revised estimates indicated that it would cost between $7 and $8 million extra, an increase of approximately 300 percent .However, two weeks later, February 24, 1966, Berkeley received a letter from the District acknowledging, in part, that "we do not have a design for a north or south subway station; therefore, we do not have estimates for the costs of these stations."6
In late July. 1966 the bids for the proposed BART facilities in Berkeley were opened.
The winning bid on the central subway station was $5.9 million, not the $8.5 million (plus $2.1 million of finishing work) BARTD's engineers had estimated.The actual cost of extending the subway 3/4 of a mile came out $3.3 million, not the $6.2 million BARTD's engineers had estimated.
The probable extra cost, "in light of the bids received" of "border-to-border" subway (to replace 2-1/2 miles of elevated) would not exceed $16.5 million, not the $22 million minimum BARTD estimated.7
Despite the "facts" of the matter, BARTD would not agree with the conclusions drawn from the bids by Berkeley. Indeed, the BARTD staff "abruptly broke off negotiations" in mid-August 1966, declaring a $22.3 million estimate of the cost for the border-to-border subway. This estimate was further revised at the end of August to a figure of $25.2 million! However, the District simultaneously offered to build the additional 0.75 mile of subway, which had already been engineered, at the price as revealed by the July bids. "Again the attitude was apparent that Berkeley should accept the short subway extension and get out of the way of regional staff plans and authority."8
In a subsequent hearing before the District's board of directors on August 30, 1966, Berkeley requested that BARTD create a special transit district in the city and set a special bond election for Berkeley voters. The ensuing disagreement about the size of the impending bond issue almost resulted in an impasse. Berkeley wanted the amount of the bond issue pegged at a "realistic" amount revealed by the bids, but the District insisted that its estimates be used in the election.**** The election was set for October 4, 1966 on the District's terms.
Berkeleyans launched an all-out campaign to pass the bond issue. Indeed, the mobilization of resources during that four-week campaign may be unprecedented in the history of Berkeley. The primary issue in the campaign was the fear that elevated tracks would divide the city along racial lines. The desire to avoid such an eventuality can be seen in the rejection of a previous proposal to build a second high school in West Berkeley on the ground that it would be a black school. The election results confirmed the feelings of Berkeley leaders about what the community wanted. More than 80 percent of the voters, from all parts of the city, registered approval of the border-to-border subway. Johnson goes on to note that the District board "both in personal commendations and officially, promptly and graciously acknowledged the mandate of the people of Berkeley."9 After three and one-half years, the Berkeley subway controversy was settled.
There is much to be learned about BARTD's attitude toward and relationships with client communities from studying the Berkeley subway controversy. The incident says something about the District staff and directors, about the joint venture, and about the position of other municipalities within the district vis-a-vis BARTD.*****
Certainly, the District's professed self-image of maintaining close working relationships with its client-publics would appear to be contradicted in this episode. Berkeley's original request for all under-grounding had been issued, after all, in 1960. BARTD's response was negative, but understandably so. Clearly, the District could not have granted Berkeley's request without jeopardizing its plans for rapid transit facilities in other parts of the district. Thus, the substance of BARTD's reply was never really in question.
The significant point is the manner in which BARTD responded, over a period of several years, to one part of its external environment that wished to have some voice in the decision-making process. The initial meeting between Berkeley and the estimator in April 1964 on the subject of comparative cost data is an indication of how those who operate within a prescriptive framework react to outside "interference." The estimator's refusal to discuss the basis for his calculations conveys both an attitude of professional propriety and a sense of security of position in so doing.
Another example of the engineers' power and influence in District decision-making took place at the hearings before the BARTD board in mid-1964. In an attempt to buttress his case regarding the estimated costs of constructing underground facilities, the engineers' chief estimator presented "evidence" (Exhibit No.51) to the effect that the costs of subway construction in Montreal were in line with the BARTD estimates for similar construction in Berkeley. The data, said the estimator, were taken "from information provided by Mr. Jules Archambault, Chief Engineer of the Montreal Transit Commision, April 9, 1964 (emphasis supplied). Shortly thereafter, Johnson revealed that Jules Archambault and the Montreal Transit Commission are concerned with buses rather than trains. Evidently while Johnson was visiting Montreal, he spoke with Archambault, who mentioned a "ten-minute telephone call" from an estimator for BARTD's engineers.10 Nevertheless, Berkeley remained unable to make its case before the board.
Then, too, there is the instance of the "revised cost estimates" for the north and south transit stations in Berkeley. Two weeks after informing the city of an estimated 300 percent cost increase, BARTD admitted that insofar as there were no designs for the stations in question, there were no estimates either. Examples such as these suggest strongly that both the District and its representatives did not want to entertain ideas or questions from outsiders. Furthermore, the antipathy to local participation appears to reflect a deeply rooted conviction that any means are justified in the preservation of the District's "sacred mission." The actions taken by BARTD and its engineers indicate more than a simple disregard for the opinions of the publics in whose behalf they serve. This can best be understood in light of a subsequent development, again involving the city of Berkeley.
Legal action was brought against the District regarding the latter's plans for a transit station in south Berkeley.11 The plaintiff held, and the court concurred, that by the terms of the October 1966 bond election the District would, insofar as possible, build all facilities underground. Information conveyed to the public by BARTD suggested that this was indeed true. Not only were BARTD's plans for an elevated station in south Berkeley not disclosed publicly prior to the election, but the District was found by the court to have willfully violated its "understanding" with the citizens of Berkeley.
The court held that the Ashby Place station plans were "completely inconsistent" with the residents' wishes, with the concept of the electorate, and with the language of the ballot measure. The court further noted that BARTD would proceed, unless restrained, with its plans to construct the station. Thus, the District was restrained, and BARTD officials were ordered to comply with the "understanding of the electorate."
Given this "history" of its relationships with the city of Berkeley over a period spanning four years, we may conclude that BARTD's publicly stated intentions of working harmoniously with its client publics were inconsistent with BARTD's actions. There are several ways of explaining this disjuncture, but a plausible one is that the actual managers of BARTD were, in fact, the consulting engineers. We have mentioned the enviable contract that the joint venture had Inade with the District, and we discussed briefly the role of PBTB in connection with the appointment of Keneth Hoover, BARTD's first "chief engineer," and the allegedly 44 percent-complete transit station in Lafayette.
The BARTD budget's Summary of Manpower Requirements would seem to corroborate this hypothesis. Until 1966, there were only 19. people working directly for the District on engineering matters. Most of the engineering was controlled by the joint venture, and we have discussed earlier the rationale in support of contracting for engineering services. One unanticipated consequence of so doing, however, appears to have been a further reduction of control by BARTD officials Given a management team of relatively small size with an almost complete lack of experience in the management of complex organizations, and given a board of directors that can be described as inexperienced, the District was either unable or unwilling to exert control.******
In summary, if Berkeley's experiences with BARTD are at all generalizable, local governments have found it extraordinarily difficult to participate in the District's decision-making processes, even as those decisions might affect the particular government in question. We shall have more to say later about how, if at all, it might have been different. Suffice it to say now that although the District and its consulting engineers display every appearance of being "untouchable," there have been those who have considered BARTD hamstrung by the many governments with which it must deal. As a final commentary on the Berkeley controversy, it is notable that the cost of under-grounding rapid transit facilities cost $12.4 million, slightly less than the July 1966 bids, and considerably below the estimates rendered by BARTD.12
BARTD's difficulty in understanding Berkeley's desire for subways suggests either that cities were not an important part of the District's environment or that BARTD's information-gathering capability was not well-developed. However, since the state legislature and the business community are considered to be important support groups for the District, let us examine the BARTD response to these publics during the financial crisis.
My use of the Berkeley controversy can be criticized on the
ground that no other municipality impacted the District as
Berkeley did. It has also been claimed that Wallace Johnson is
an unusual person. To be sure, both statements are correct. No
one knows what, if anything, would have happened had Johnson
not been present at that time. Not only is he adamant and
articulate about what he believes, but, because he is an
engineer by training, he qualifies as an expert in his own
right. Yet to say that without Johnson's perserverance there
would have been no conflict is to miss the point. Wallace
Johnson's tenacity is well-known, but his account of BARTD's
behavior during that time suggests that in order to gain the
District's attention one would, by definition, have to be
strong-minded and persistent. Berkeley, with Johnson at the
helm, fought BARTD for three and one-half years. The
implication to be drawn from the Berkeley subway issue is that
any organization without a Johnson-type would be at the mercy
of the District.
******One
indicator of BARTD's efforts to assert control over District
affairs was the rapid growth of the Office of Development and
Operations which followed the appointment of David G. Hammond
as assistant general manager:
| 1966-67 | 30 employees |
| 1967-68 | 83 employees |
| 1968-69 | 118 employees |
| 1969-70 | 218 employees |
| 1970-71 | 536 employees |
The advertising supplement in Fortune magazine (September 1970) that was sponsored by the Greater San Francisco Chamber of Commerce notes that BARTD's "honeymoon" period ended abruptly in 1965 when a series of unexpected events eroded public confidence in the District and its mission. First came the opening of the bids for a single contract to construct 1.5 miles of subway and two transit stations in the heart of downtown Oakland. Although BARTD had hoped to attract several bids by fashioning one major contract, only two bids were received, the lower of which exceeded the engineering estimates by approximately 25 percent. The San Francisco Chronicle's Michael Harris, after a six-month tour of rapid transit systems throughout the world, wrote a nine-part series of critical articles about the District, concluding that BART was a "transit fantasy." At about the same time, two of the agency's most prominent design consultants, Donn Emmons and Lawrence Halprin, resigned from the project, issuing public denunciations of both District management and the joint venture engineers.
The most serious blow to public confidence, however, was BARTD's announcement of impending financial disaster. The first indications of money troubles evidently appeared in May 1965, but it was not until early 1966 that the public became aware of the seriousness of the problem. And it was not until the spring of 1969, more than three years later, that the District's financial difficulties were relieved. What was the nature of the problem? How did it arise? How did BARTD respond to the problem?
The only certainty about BARTD's financial problems was that there did, in fact, seem to be a shortage of funds. How much and for what reasons are questions that have not been definitively answered although many answers have been given.13 The District, for instance, projected a deficit of $144 million as of January 1, 1968. However, the state's Department of Finance, using BARTD's figures and cost estimates, determined as of June 6, 1968 that the capital requirement for completion of the basic system was approximately $51 million and that the District would need about $61 million in short- and long-term loans during the construction period. Finally, A. Alan Post, legislative analyst for the California Legislature, identified a need for additional funding of between $96 and $195 million.
Aside from the question of the magnitude of the overrun, what was the nature of the problem? According to the District's January 20, 1966 "Memorandum Re Rapid Transit Project Financing," the basic problem was alleged to be an interruption in the construction schedule, the immediate result of which was cost inflation. The legislative analyst's report presents a somewhat different view: inadequate estimates for inflation and contingencies. Had the District planned adequately for uncertainties, the financial problems woold not have arisen at that time.
BARTD cited two principal causes of construction delays: (1) the previously discussed taxpayers' suit of six months duration that immediately followed the 1962 bond election, and (2) negotiations with various governmental units, with particular reference to the two months of public hearings conducted by the BARTD board at the request of the City of Berkeley. Furthermore, the inflation normally associated with a delay in construction activity was said, by BARTD, to have been exacerbated by the U.S. involvement in Southeast Asia. Not only had domestic price levels risen because of the war, but a tighter supply and demand situation was created in the domestic building industry by construction requirements in Vietnam.
The legislative analyst's report, although generally concurring with the District's explanation of its financial situation, is confusing. For instance, BARTD's notion of the cost-push price inflation effect of the war in Vietnam does not appear to be substantiated. Until the bids on the Oakland subway and the transBay tube were opened in December 1965, the District's experience with bidding estimates for the previous 20 months had been favorable, well below the engineers' estimates and the Composite Report's allotment for the work. The only serious overrun projections occurred immediately prior to the announcement of impending financial disaster.
The legislative analyst's letter further observed the "failure of the District to arrive at agreements with the various municipalities along the system route as rapidly as projected in the Composite Report estimate."14 The board of directors contributed to this "failure" by not establishing firm policy "relative to constructing the system within the allotted funds should the alternative become one of limiting the facilities versus increasing the financing."15
In addition to pinpointing steps the District failed to take prior to encountering financial difficulties, Post's letter contained specific recommendations for each of the criticisms registered. Inasmuch as most of the criticisms implied poor management (rather than deliberate mismanagement), the recommendations were relatively standard elements of good business practice. One of the more interesting suggestions pertains to BARTD's relationships with its external environment:
The District should explore the possibility of having its District Act amended to strengthen its ability to act with expedition in its relationships with local government units within its jurisdiction. ... The District should now be strengthened and consideration should be iven to removing from the District Act the unusually restrictive hearing requirement. [Emphasis added.]16
Post's letter to Senator McAteer closed with a question that was really addressed to the BARTD board: is the District going to cut back its plans in order to minimize the cost overrun, or is the District; going to construct "something better" and worry later about the necessary financing? In retrospect, it seemed clear that BARTD was not going to be denied additional funding; the only real question was how that funding was to be obtained.
The most commonly referred to source of additional capital was a second, and supplementary, general obligation bond issue. The technical difficulty associated with that proposal was that the District law places a limit on the sale of such bonds at 15 percent of the assessed valuation of taxable property within the District. Although BARTD had been authorized to sell $792 million worth of bonds, the legal limit at that time was only $705 million. Thus, a second bond issue would have had to be coupled with a change in District law.
The major drawback, however, was political rather than legal. A bond issue would have had to be submitted to the voters. Since the original 1962 bond issue, with plenty of organized support and no organized opposition, had passed by the slim margin of 1.2 percent, it was questionable whether the voters would support BARTD four years later. The District naturally preferred a solution that did not require an expression of public confidence. Interestingly enough, there appeared to be more support for BARTD outside the Bay Area, at state and national levels, than within it.
A number of alternative measures were proposed: federal grant and assistance, monies from the state's General Fund, increase in Bay Bridge tolls, in Lieu taxes on the automobile, and so forth. For various reasons, political as well as financial, these were deemed unsuitable. The eventual solution -- a sales tax increment -- was initially mentioned in a report by the Stanford Research Institute in 1956;16 as far as we know, its principal supporter a decade later was the San Francisco Chamber of Commerce. Since the business community would be relatively disadvantaged by a tax measure of this type, the Chamber was reluctant to endose such a measure. In the final analysis, however, a sales tax approach appeared to be the only solution that could attact sufficient support in Sacramento.
A resolution of the financial crisis required more than three years of negotiations. California's Governor Ronald Reagan was though to be opposed to any measure that diverted monies already committed. BARTD, on the other hand, favored such proposals. The governor generally supported measures that could be decided by a popular vote. BARTD, on the other hand, disliked such proposals. When the governor agreed not to oppose an increase in the sales tax, the battleground shifted to the legislature. Historically, the legislature considered public transit to be a local problem and, therefore, beyond the purview of the state. The legislature, especially the senate, had to be convinced that transit was a state problem as well. This process of education took almost a year. Then the partisan aspect intruded. Senator Randoph Collier, Democrat, had drawn up a sales tax bill that would have rescued BARTD. The governor, however, insisted on Republican sponsorship. Eventually Senator Lewis Sherman, a Republican from Berkeley, sponsored the measure and it carried on March 28, 1969. BARTD was given teh authority to impose and increment of half a cent on the state sales tax within the district. When the revenues derived from this tax increase reached a stipulated ceiling of $150 million, the authorization was to be removed.
The substantial investment in the BART system, financially as well as politically, makes it difficult to imagine that the project would have been allowed to die at this stage of development. Reviewing the various accounts of the District's financial troubles, one is struck by the fact that there was no agreement on the amount of the projected deficit, even when analysts used BARTD figures as starting points. Furthermore, the analyses focused almost exclusively on capital requirements, ignoring other factors that may have been relevant. That is, no one seems to have asked whether BARTD's problems were caused by financial difficulties or whether the financial difficulties were consequences of more fundamental problems.
Consider, for example, the reports from the legislative analyst's office. Having faulted both management and directors of BARTD, the recommendations were to strengthen business practices and procedures. The District was alleged to suffer from weak leadership; yet none of the recommendations dealt with personnel. Another of Post's recommendations was the removal of the "unusually restrictive" hearing requirement from the BARTD Act. What Post seems to have been saying is that because BARTD had fallen victim to the provisions of its own act, those provisions ought to be changed. It is not clear that this was a sound suggestion. Presumably the provisions for hearings were intended to provide the opportunity for public access and input to agency decision-making processes. To remove the agency from citizen access is to say that the public interest was represented within the agency itself. This is not necessarily true, as we have previously observed.
Moreover, the reports from the legislative analyst appear to have adopted the BARTD perspective on relationships with local governments. The more widespread belief is that the various publics have no real leverage on BARTD. If Wallace Johnson's understanding of the Berkeley subway controversy is any example of the manner in which BARTD copes with local government concerns, the removal of the hearing requirement would effectively foreclose public participation in rapid transit decision-making.
Why is the legislative analyst's report so puzzling? A partial explanation may be found in the roles of some of the principals involved. For example, Alan Post, the legislative analyst, did not personally investigate BARTD. Lawrence D. Dahms, who did, had been with Post's office for several years prior to this investigation. Subsequently, Dahms moved into a top management position with the District in 1969, becoming an assistant general manager in 1970.*
In any event, the legislative analyst, and through him the legislature, have been supportive of BARTD. The immediate outcome of support in this instance was financial: a guarantee of supplemental funding up to a maximum of $150 million. A less immediate outcome of BARTD's financial troubles has been a deterioration in the District's relationships with the business community, particularly the San Francisco Chamber of Commerce. The cause of this estrangement may be traced to BARTD's tendency toward "crisis management" during those years.
The Chamber of Commerce evidently felt that the loss of public confidence in BARTD could be attributed directly to the District management's lack of credibility. Apparently the Chamber had issued repeated, but private, requests that BARTD make a full and complete disclosure of its financial needs to complete the basic system.** The District evidently made no effort to clarify the situation. The Chamber further faulted BARTD's management for inept political maneuvering
We may infer from the Chamber's statements on the decline of public confidence in BARTD, an incipient "debacle," that the doubters included the Chamber. Since the Chamber had been one of the District's principal support groups, BARTD's lack of candor was somewhat surprising. Whether we interpret the Chamber's appeals to BARTD as the feedback of information or as a threat to criticize publicly, they can certainly be regarded as symptoms of a deteriorating relahonship. This seems to be verified by a statement from one of BARTD's senior executives, who, during an interview, labeled both the Chamber and the Bay Area Council as "very unsupportive." Once again, we find a prescriptive outlook, the staunch refusal to accept any adverse reaction as justified or legitimate. This example illustrates a limited capacity for organizational learning. BARTD could not seem to "hear" what its major supporters were saying and was isolating itself from its environment.19
Of course, it may be argued that BARTD's conflicts with Berkeley and the San Francisco Chamber of Commerce are isolated examples drawn from the past, not representative of the District's pattern of interaction with the publics it serves. Perhaps. But if this is so, we would expect BARTD to concentrate on fostering and maintaining good relations with the general public, particularly as revenue-service operations came to be close at hand. After all, the District's success depends on large patronage. It is, therefore, surprising that the conflict over commercial advertising, which is our next example, arose and took the shape it did.
In this regard, it is worth mentioning that many people have ex-pressed- to me doubts about the District's standards of professional conduct and the integrity of management. These doubts, if they can be summed up and generalized, can be expressed in the following manner: BARTD has been careful not to do anything illegal, but aside from this proviso, anything else is possible. An interesting example of this attitude is reflected in the arrangements for San Francisco's Embarcadero Station. Tallie B. Maule is the architect. Prior to receiving his appointment, Maule was in the employment of the joint venture as their chief architect. Since he could not be both an employee of PBTB and a major contractor at the same time, one of the conditions appended was that he resign his position with the engineers and become instead a consultant to them. A noteworthy aside with respect to the Embarcadero Station is that it will cost more than the entire subway system in the city of Berkeley.
Yet another example of "borderline ethics" is
contained in an article by Justin Roberts in the Contra Costa
Times (July 28, 1972). He claims that BARTD has
deposited $750,000 in the Fremont Bank; an institution in
which BARTD President George Silliman is both an executive and
a major stockholder.
**One of
the most troubling aspects of the financial crisis, and what
became known within the Chamber as the "litany of 144," was
whether BARTD needed $144 million or up to $144 million. This,
in turn, centered on the District's intentions with respect to
rolling stock The $792 million of general obligation bonds
were for the construction of the system. According to the
Composite Report, BARTD intended to acquire rolling
stock from the sale of revenue bonds. As the name
implies, revenue bonds are linked with revenues
generated. Evidently there was some doubt as to whether the
fare box collections (revenue) would be sufficient. If not, it
is doubtful that bonding institutions would wish to handle the
bonds.18
The state Department of Finance estimate of June 6, 1968 is contained in an unpublished report entitled "Findings on Review of Financial Needs of Bay Area Rapid Transit District to Complete Its Basic System." The report is prefaced by a cover letter from James C. Harrell of the Department of Finance and is addressed to Gordon C. Luce, Secretary of Business and Transportation, and Caspar W. Weinberger, who was Director of the Department of Finance.
The first of several reports from the Office of the
Legislative Analyst to State Senator "J" Eugene McAteer (San
Francisco), who had requested the inquiries, is dated March 7,
1966.
14Letter from Alan
A. Post, legislative analyst, to State Senator Eugene McAteer,
March 7, 1966, p. 7.
15Ibid., p. 20.
The BARTD Act, Section 29039, as we noted earlier, entitles any municipality within the district to request a hearing before the board of directors relative to any proposal with regard to locating transit facilities by the District. Post's letter, which recognizes the board's adherence to this provision, indicated the hazards involved:
The opportunity for a hearing represented an invitation to local governments to solicit improvements on any segment of the system. The absence of a firm and explicit policy statement that might reflect a board attitude of resistance to additional cost items served to limit the District staff effectiveness in its dealing with both the communities and the joint venture engineering staff with respect to controlling scope and costs. The responsibility for formulating and securing approval of policy direction is, of course, initially that of the General Manager.