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This post has been updated.
SANDAG’s board on Friday approved an investigation into the agency’s economic forecasting scandal.
The investigation will attempt to determine who in the agency knew its forecasts were wildly overestimating how much revenue an existing sales tax, and another proposed one, would generate for regional transportation projects – and when they knew it.
The board did not decide who would conduct the investigation. It directed its executive board – a subset of elected leaders from around the county – to identify a few options and bring them back to the full board for final approval.
SANDAG told voters the proposed sales tax, Measure A, would bring in $18 billion. The agency knew it would actually bring in far less – but dangled the $18 billion number in front of the public anyway, Voice of San Diego revealed earlier this month.
The board also approved a series of changes to the agency’s forecasting process. Staffers will now run their forecasts more often, produce reports to the board more frequently, hire someone to ensure the accuracy of the data it relies on and identify other areas that might be affected by SANDAG’s forecasting failures.
Board members emphasized that they need to restore the public’s trust in SANDAG, which they said requires a clear accounting of what went wrong, who knew, when they knew it and why the public wasn’t told.
“Restoring confidence in SANDAG is of the utmost importance and we need to get at it sooner than later,” said Poway Mayor Steve Vaus, one of seven board members who requested an investigation ahead of the meeting.
Supervisor Ron Roberts, chairman of SANDAG’s board, said an examination was necessary to restore the agency’s trust.
“With that we can get to the bottom of these issues, and I’m hopeful that we can restore everyone’s trust in the public and on this board and allow us to move forward with a clean bill of health,” he said.
San Diego City Councilwoman Georgette Gomez supported the investigation and commended SANDAG staff for a report it delivered conceding the extent of the forecasting errors.
“That you for acknowledging that something was going on,” she said. “I truly do hope that the audit is a true independent process. I hope it isn’t a retired whoever – I hope it’s someone who has accountability to the constituents.”
Many board members – including Escondido Mayor Sam Abed, Carlsbad Mayor Matt Hall and National City Mayor Ron Morrison – dwelled on the difficulty and inherent uncertainty of forecasting. They did so despite a staff report kicking off the hearing that clarified a basic, inarguable mistake was made in the forecast. Chief economist Ray Major described it as a copy-paste error.
Coronado Mayor Richard Bailey seized on that fact. The complexity of forecasting, he said, is a distraction from the fact that this was a basic error.
“For as complicated as this forecasting is, this all comes down to a simple human error,” he said. “And so, because this was a human error, there’s likely to be errors in the future. So the real question for me is, why wasn’t this error elevated, once it was discovered, to the board? And in the future, when we discover that there are errors, human errors, how do we ensure SANDAG staff knows to elevate those to the board, so that we know the public isn’t being misled, so that we know we’re not being misled?”
In his presentation, Major attempted to clarify and quell fears over some of the information reported by Voice of San Diego, including colorful emails he exchanged with a staffer upon discovering the error.
First, he said that he was not panicked when he wrote “omg” and “wtf” in response to discovering something was wrong.
“The ‘omg’ was really my way of saying, ‘that’s kind of curious, strange, what’s going on there,’” he said. “The ‘wtf’ was just a follow-up to that, and it was not the most professional language, and for that I apologize to the board.”
SANDAG leaders, in their Friday presentation to the board, conceded the forecasting error. But they are still insisting the agency did not intentionally mislead voters – an explanation that does not hold up to scrutiny.
Major acknowledged that SANDAG executives received a presentation that outlined the forecasting error and its implications. The PowerPoint presentation, obtained in public records requests by Voice of San Diego, includes a handful of slides that make explicit the connection between the forecasting error and agency tax revenues.
But Major tried to downplay how much information executives really received in that presentation.
“At that meeting that happened in December of 2015, staff presented a handful of slides out of a working deck that had 51 slides in it,” Major said. “That deck is really a working deck that has a lot of slides in it that are used depending on what topic comes up in conversation. They were not all presented.”
Major did not specific which slides were left out of the presentation.
After the meeting, SANDAG spokesman David Hicks said I could not speak to Major to ask him which slides were excluded from the presentation. He said he would attempt to get me that information by the end of the day. We will update this story if Hicks responds.
Update: Hicks responded late Friday to say that he would not be providing the slides that Major said were excluded from a presentation to SANDAG executives.
Here’s Hicks’ statement: “In response to your question, the Board has asked for an independent examination of what various staff members saw and did with regard to that particular meeting and other related issues. We are going to allow that process to get to the bottom of questions such as the one you raised with me regarding exactly which slides out of a 51-slide deck were or were not shown at a meeting regarding DEFM in December 2015.”