Montee releases audit of St. Louis Metro agency

ST. LOUIS -- The St. Louis-area mass transit agency's lack of financial controls helped lead to spiraling costs for an 8-mile expansion of the MetroLink light rail line, costs that could weigh down the agency for years to come, Missouri State Auditor Susan Montee said Tuesday.

Montee was in St. Louis to release an audit of Metro that began three years ago. In addition to light rail, Metro provides bus and call-a-ride services on both the Missouri and Illinois sides of the region.

Her report said stronger financial oversight would have prevented many of the problems that caused construction of the MetroLink line from Forest Park to Clayton and Shrewsbury to cost $676 million -- roughly $136 million over budget.

"It is placing a financial burden on Metro on days going forward," Montee said.

At a separate news conference, Metro president and chief executive Robert Baer noted that the key decision-makers involved in the extension project are no longer with the agency. That includes former president and chief executive officer Larry Salci, who left Metro in December. New safeguards and procedures have been put into place, said Baer, who replaced Salci.

"It's a new day," he said. "We're moving forward."

Metro originally hired four different engineering companies dubbed the Cross County Collaborative to handle the project, and bids went out in December 2002. But problems began soon thereafter, and in 2004, Metro fired the collaborative and took over the project itself.

Eventually, Metro sued the collaborative and lost. Jurors awarded the collaborative $2.56 million, and Metro was ordered to pay millions more in legal fees.

Montee cited several problems with the extension project. For one thing, design work wasn't completed when bids were let. The project ran into several snags -- utility relocation, for example -- but Metro, hoping to avoid delays, kept moving forward, she said, often grossly overpaying for goods and labor.

Asked if it was a case of mismanagement, Montee said, "I think it was."

But Baer said that he has found Metro to be well-managed, with the exception of the extension project. Despite a very difficult financial environment made worse by the lingering costs of the project, Baer said ridership is up, complaints are down and accidents are on the decrease.

"Many lessons were learned," he said. "We're not going to make the same mistakes."

Montee also expressed concerns about nearly $1.7 million in bonuses, stipends, severance payments and retroactive raises to three executives, including Salci, and other employees.

Baer defended the payments, noting, for example, that the severance pay was part of a contract and Metro was obligated to pay it.

Baer said Metro faces a $45 million deficit in the fiscal year that begins next July unless it comes up with a new revenue source. About $4.5 million of that is due to costs from the expansion project, he said. The agency is seeking a half-cent sales tax increase in November.

If the tax increase fails and if local, state or federal governments don't provide more money, passengers will feel the pinch starting next year, Baer said.

"There will be service reductions and they will be severe, and there will be fare increases."