Under fire from a lawsuit, internal audit findings and some members of its board, the San Diego Association of Governments announced Wednesday that it was taking immediate steps to resolve long-running flaws in the toll system serving the South Bay Expressway.
In a news release issued by Chair Nora Vargas and other board leaders, the planning agency known as SANDAG said it directed Deputy CEO Ray Major to take over responsibility for toll operations from the chief financial officer.
Longtime CFO Andre Douzdjian acknowledged to the SANDAG board last week that ETAN Tolling Technology had been paid more than $8 million for software that did not work properly — and had not over several years.
Douzdjian said SANDAG was withholding some $1 million owed to the contractor as a penalty but that the company would likely receive the additional payments as it works with a new vendor to produce a new system.
He also acknowledged that ETAN and another SANDAG vendor, consultant HNTB, received millions of additional dollars and multiple contract extensions even though SANDAG officials knew the software did not work.
SANDAG is now expected to pay up to $28 million for new tolling software, the CFO also said.
Vargas said putting Major in charge is one of several reforms aimed at restoring public trust in the planning agency and in overseeing fixes to the current tolling software that incorrectly charged thousands of drivers.
“Ensuring the public’s trust is paramount,” said Vargas, who also chairs the San Diego County Board of Supervisors. “The board and I are taking these matters extremely seriously, and an investigation plan is already underway with our new independent performance auditor.”
Vargas also said the SANDAG customer service office is increasing staff to better serve drivers worried that they were not properly charged for using the expressway.
SANDAG staff also was directed to create an “action plan” to present to the board at its meeting next month.
The blueprint is expected to detail what went wrong with the current toll system and what next steps the agency will take to correct problems and put the new system in place.
“We understand that we have a fiduciary responsibility to the community to get this right and we have a plan to do so,” Vargas said in the release. “I want to be clear that we will take every step necessary to protect the public and ensure the integrity of the system.”
The announcement follows a public meeting last week at which members of the public and several SANDAG board members complained about yearslong problems with the toll-collection system that regulates the 10-mile section of state Route 125 known as the South Bay Expressway.
In a wrongful-termination lawsuit filed last month, former SANDAG finance director Lauren Warrem said Douzdjian and CEO Hasan Ikhrata fired her after she raised questions about whether the tolling system could be fixed.
Ikhrata announced earlier this year that he would resign. His last day is Dec. 29.
The news release Wednesday also noted that Vargas requested that the internal SANDAG auditor assess the toll operations system.
The Office of the Independent Performance Auditor has previously issued reports raising alarms about the system, as well as millions of dollars in other contracts approved by the planning agency.
In separate public reports issued last year and earlier this year, for example, the SANDAG auditor said the agency does not follow contracting guidelines, issues no-bid contracts to vendors and does not properly monitor millions of dollars in spending.
The audits also noted that SANDAG managers did not oppose most of those findings.
