RTD Fix-It Plan Would Backfire, Audit Finds

Independent auditors reviewing RTD General Manager John Dyer’s fix-it plan say some of his promised improvements would actually worsen performance at the beleaguered transit agency.

In addition, the auditors have cast doubt on the professed ability of Dyer’s plan to generate savings of more than $1.3 million in the first six months and $6.6 million in the 1987-88 fiscal year.

The report, prepared for the Los Angeles County Transportation Commission and released Monday, lends support to Dyer’s critics, including some Southern California Rapid Transit District board members, who saw his recently adopted 14-point “action plan” as being oversold and poorly thought out.

Dyer personally drafted the plan last January when he was under a barrage of criticism and some local elected officials were demanding his ouster. Approved by the RTD board in early February after considerable debate, the Dyer plan promised a turnaround within six months on a series of problems ranging from loosely controlled expense-account spending and high employee absenteeism to bus safety and maintenance problems.

The analysis of the fix-it plan by the San Francisco-based accounting firm of Price Waterhouse found that some of the aims set out by Dyer would result in a decline in performance. It cited particularly the areas of travel spending, bus breakdowns, operating costs and service to the handicapped.

Increase in Spending

On travel expenses by district staff and board members, Dyer’s plan promised a $75,000 savings over the next six months. But the commission’s analysis found that travel and expense accounts have been running far over budget, and Dyer’s spending “reduction” target would still leave the district nearly 20% above its approved spending level. “The RTD proposal does not produce a savings, but rather results in an unplanned cost of $34,731,” the report says, calling for a cut in spending from the budget amount.

Also, the RTD was already exceeding the plan’s goal for mileage between bus breakdowns when the plan was approved, the report says. The six-month goal was 4,400 miles between road calls, but the district already was averaging 4,465 miles between breakdowns. Thus the breakdown rate that Dyer sought “anticipates a decline in performance,” said Douglas Carter of Price Waterhouse.

Likewise, targets for “reducing” bus operating costs actually allowed for a substantial increase in spending. RTD this year has budgeted more than $71 per hour of bus operating costs, and Dyer’s plan called for that to be cut to $69.89. However, the commission auditors found RTD’s actual costs before the adoption of the plan were only $66.80 per hour. “They would have to increase spending (to meet Dyer’s goal) . . . ,” Carter said.

The commission report also said it could initially substantiate a six-month savings of only about $1,300 from the plan, rather than the $1.3 million estimated by Dyer. The auditors said they are continuing to research the basis of the claimed savings to determine their own estimate.

In one case, Dyer estimated that reduced bus accidents--the rate has actually risen slightly in recent months--would lead to a $520,000 savings by August and a $3.1-million savings next year. But auditors found that those savings assumed an average loss of $5,500 per accident--a figure that was not based on study or documentation. Carter said the RTD apparently “pulled it out of the air.”

In a self-prepared “report card” on the first month’s performance under the plan, Dyer last month gave his administration mostly A’s and Bs. But the auditors for the commission, using different measurements in some cases, judged the first month’s performance somewhat harsher. For example, Dyer gave himself a C in bus service and maintenance, while the commission report showed the district failing to meet objectives in its three key areas--late and canceled bus runs, bus breakdowns and bus driver staffing.

Dyer declined to comment on the report, saying through a spokesman that he had not had time to analyze it.