Published March 18, 2008

Off the tracks?
Nine years past a deadline, the county must decide whether to scrap an overhaul and spend $345 million on new cars.
BY LARRY LEBOWITZ

Miami-Dade Transit has postponed a federally mandated overhaul of its 136 Metrorail cars that was due in 1999 -- a delay that has left the county with a $300 million repair bill.

But after nine years of backroom discussion and, some say, deception, the agency will ask commissioners Tuesday to scrap the rehab and buy new cars.

Doing so means throwing away $9 million in consulting fees and staff time that went into trying to hire a company to strip and rebuild the cars.

But county leaders say the rehab is now so late and so costly that it's wiser to spend $345.4 million on a new fleet.

"We didn't properly maintain those cars for 20 years -- that's the truth of the matter," said assistant rail director Richard Snedden, a 23-year Transit veteran. "We never put the public in danger. The cars were safe. But we never had the money to do the heavy-duty system replacements that we should have."

The Federal Transit Administration, charged with enforcing the maintenance requirement, issued a 2001 "watch letter" that forced Miami-Dade to hire more rail technicians and beef up preventive maintenance.

For riders, the effect was more inconvenient than unsafe: more frequent breakdowns, filthy seats, failing air conditioners.

But if the public was safe, its tax dollars weren't.

Records show costs ballooned from a $188 million estimate in 2003 to $301 million by 2006, as Transit delayed the rehab and tacked on expensive extras.

While the estimated $345 million cost for a new fleet seems a comparative bargain, the spending presents an expensive political problem for Miami-Dade, which has already been slammed by FTA for failing to adequately fund future maintenance and modernization of the entire rail and bus system.

That federal criticism has jeopardized Miami-Dade's quest for more than $1.4 billion in matching dollars to expand Metrorail.

And behind it all is a cautionary tale about the consequences of years of neglect.

POTENTIAL SAVINGS

Had Miami-Dade acted faster, there is evidence that it might have saved a bundle:

The county jointly bought its original cars with Baltimore, which opened a 15-mile subway in 1983. While Miami-Dade was delaying its overhaul, the Maryland Transit Administration paid $90 million from 2002 to early 2007 to rehab its 100-car fleet.

When passengers first boarded Metrorail's 136 cars in May 1984, Miami-Dade had already promised to pay for a mandatory midlife overhaul after 15 years.

It never happened.

Former Transit Director Roosevelt Bradley, who was fired last March, said the county "'never had enough money set aside" for the overhaul and other inspections.

"You know that old ad, 'You can pay me now or you can pay me later?' " said Harpal Kapoor, who succeeded Bradley in July. "This is it."

In 2002, Mayor Alex Penelas asked voters to approve a new local sales tax, one-half of 1 percent, for transportation. His plan for a one-percent sales tax was soundly defeated in 1999, the year the Metrorail rehab should have been done.

This time, Penelas promised "new money for new projects" -- up to eight new Metrorail lines, hundreds of new buses on improved routes and wider roads.

Even though the need for the overdue rail-car work was well known at Transit's Lehman rail yard and the county manager's office, it wasn't included in the list of projects sold to voters.

But shortly after the tax passed, in early 2003, Transit staffers and county managers assembled their own $389 million wish-list of projects. The most expensive item: $188 million for the rehab.

The independent trust that voters approved to oversee the tax hadn't been sworn in yet -- and lacked any staff to vet Transit's additions.

Nonetheless, the Citizens Independent Transportation Trust adopted the list, including the rehab plan, at its second meeting. Commissioners blessed it too.

NEW MONEY

Some critics call using new money for overdue maintenance a bait-and-switch. But Frank Del Vecchio, a retired lawyer, federal housing administrator and Miami Beach activist, thinks it's even worse:

"That language isn't really adequate," Del Vecchio said. "They promoted an illusion. It was a device for extracting additional tax revenue into the system that insiders realized was going bankrupt. They couldn't maintain the rolling stock."

Transit managers had already chosen a consultant to gauge the fleet's condition, estimate prices, draft specifications and help choose a firm to do the work.

At the time, Transit estimated it would pay Washington Group International up to $957,000 to analyze the Metrorail and Metromover fleets.

ESTIMATE MUSHROOMED

That estimate mushroomed as Transit kept tacking more work onto the contract. The Washington Group has been paid $7.6 million to date; its pay could exceed $17 million if Transit keeps the consultant on board to advise on the new car contract.

Steven Kraycar, the Washington Group's Miami project manager, and spokesmen for the corporate parent in San Francisco, declined to comment for this story.

Four bidders -- all represented by top County Hall lobbyists -- spent large sums vying for the rehab work in a highly technical three-year selection process.

The costs rose steadily.

The four initial bids submitted in March 2005 ranged from $289.9 million to $394.8 million. All four teams were urged to submit "best and final" offers by April 2006.

The lowest bid in the next round was even higher -- $298.5 million from Bombardier Mass Transit Corp.

After six days of talks, Bombardier shaved its price to $274 million.

The final contract recommendation was sent to County Manager George Burgess in November 2006.

And then . . . nothing happened. The unsigned contract sat in Burgess' office for 16 months; it's there still.

Burgess did not respond to messages seeking comment.

What Bombardier operatives didn't know was that top Transit rail managers were already looking into buying new rail cars two months before the company was declared the winning bidder.

Records show Transit quietly asked the Washington Metropolitan Area Transit Authority about partnering on a rail-car contract in June 2006 -- four months before the negotiations started.

Transit staffers conducted all the secretive new-purchase research, even though it echoed similar work by the Washington Group.

In late September, county managers publicly admitted they were analyzing whether to buy new cars.

LOBBYISTS CRITICAL

Bombardier lobbyists Mitchell Bierman and Ron Book ripped Transit leaders and county managers at a tense "negotiating" session last October.

"It's pretty clear what's going on here," Book told Burgess at the time. "They [Transit executives] weren't negotiating in good faith with my clients."

Burgess defended the extra homework at the time: "It's a very important decision...And we want to make sure we make the right one."

Buying new cars will save between $40 million and $140 million over the next 30 years, county budget analysts say.

Miami-Dade would be paying Bombardier $2.2 million per car for the rehab, while other North American agencies are buying new ones for $2.54 million apiece.

New cars, properly maintained, will be able to run at least 30 years; the rehabs, 20 years, at most.

For those reasons, commissioners are being asked to let Transit seek bids for 144 new cars -- the 136 originals, plus eight new ones needed for the Metrorail extension between Earlington Heights and the Miami Intermodal Center, slated to open in 2011.

Transit also wants to lock up an option for 54 more cars -- 36 for the proposed North Corridor and 18 for the proposed East-West.

LOWER PRICES

Buying 198 new cars instead of 62 will drive down prices, Kapoor said, and one fleet of identical cars would be cheaper to maintain.

With Mayor Carlos Alvarez's backing, Kapoor insists Transit will set aside more than $251 million in today's dollars for the new fleet's midlife overhaul between 2028 and 2031.

Snedden also plans to spend $10.5 million over the next three years to clean up and improve the original cars so they make it to their 30th year in 2014.

Given the tortured history of the rehab contract and the rising anger of voters who supported the sales tax in 2002, Commissioner Carlos Gimenez doesn't know how he'll vote Tuesday:

"Do I want to vote for this? No way. Was this a bait-and-switch with the voters, taking new money and using it to fix old? Absolutely. But what happens if we vote no? Does Metrorail deteriorate and we have to shut it down. What are the consequences of that?"