The Transit Corollary to the Peter Principle

A dozen people were killed by Washington Metro trains in 2009. Earlier this month, John Catoe, the head of Washington Metro, graciously agreed to “take the fall” for these accidents by resigning his position as of April 2. The accidents weren’t really his fault; Catoe had been hired three years ago to help the agency deal with safety and reliability issues that were serious then; his crime was failing to fix the problems.

A two-year period of relative stability after he was hired led the American Public Transportation Association to give Catoe its outstanding transit manager award for turning the agency around. Then a series of crashes, deaths to workers, revelations about near-accidents and maintenance failures, and — most recently — the near-deaths of safety inspectors revealed that Catoe’s apparent success was largely an illusion.

Metrorail illustrates the Antiplanner’s corollary to the Peter Principle (“employees tend to rise to their level of incompetence”). The transit version of the Peter Principle is that “successful bus transit agencies rise to their level of incompetence when they build rail lines.”

Building and running a rail system is far more complicated than running a bus system. That’s why the general managers of rail transit agencies get paid far more than of bus agencies. John Catoe was paid $300,000 plus various “allowances” of another $60,000, making him one of the highest paid public employees in the region. But this is quite similar to the salary paid to general managers of the Los Angeles ($302,000), BART ($298,000), San Jose ($290,000), Salt Lake City ($267,000 plus $100,000 in allowances), and other rail transit systems. As near as I can tell, general managers of bus systems typically earn about $100,000 to $150,000, though there may be exceptions.

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In addition, the heads of at least five other rail agencies have resigned amid turmoil in the past few years. First, the general manager of San Jose’s Valley Transportation Authority (VTA) resigned under pressure in 2005 as that agency’s finances were imploding. VTA has also gone through a series of highly paid chief financial officers.

Then, in 2007, the head of St. Louis Metro resigned in disgrace when a light-rail line went over budget and his attempt to recover some of the money by suing the contractors backfired. In early 2009, the general manager of Denver’s RTD suddenly quit to take a job in the private sector just as the agency’s board was discovering that he couldn’t keep his promise to build 119 miles of rail with the tax increase voters approved in 2004.

In late 2009, the head of Austin’s Capital Metro was stepped down when his grand commuter-rail line was over budget and going on two years late. At the end of 2009, the board of the Hampton Roads Transit Agency (which serves Norfolk and nearby Virginia cities) told its CEO to resign or be fired due to cost overruns in that agency’s first light-rail line. He choose to retire in early January, just a few days before Catoe announced his resignation.

The Antiplanner has suspected that the higher pay earned by managers of rail agencies gives bus agency managers an incentive to promote rail even where it makes no sense. This record of resignations should give bus managers reason to pause before building rail.