Shame On The Voters?

" The public expected the impossible, in other words, and by gosh someone had better deliver. "


Yes, that's right, a recent Rocky Mountain News editorial took the time to chastise the voters for expecting the impossible. Are the voters expecting the impossible? They seem to think so. The main problem I have with this claim is that they never touch on why it is the voters have come to expect the impossible? Could it be because they were promised the impossible in 2004?

Sales Tax Money For RTD

Keep this in mind every time you buy something.

Denver Post :

FasTracks is the nation's largest transit expansion program, one that metro Denver voters backed in 2004 when they approved an additional 0.4 percent sales tax to build the project. The increase was on top of the 0.6 percent sales tax that RTD relies on to run the bulk of its existing transit system.

Colorado Construction Cost Increases in 2007

http://www.masstransitmag.com/web/online/Top-Transit-News/FasTracks-Price-Tag-Swells/3$6318

The Colorado Construction Cost Index, a measure of costs for transportation projects maintained by the Colorado Department of Transportation, increased 6.1 percent last year.

Fastracks West Corridor : 40% Higher Cost And Less Than Promised

As mentioned previously, the West Corridor for RTD's Fastracks is being stripped to the bone. They're single tracking part of the line, building smaller stations, building lines that will require more ongoing maintenance after storms, putting riders at risk in delaying security measures and a slew of other less-than originally promised features.

RTD has locked in contracts for the line so that it will end up costing about 40% more than they told the voters it would.

http://www.masstransitmag.com/online/article.jsp?siteSection=3&id=6318&pageNum=4


The Regional Transportation District board approved a higher budget for the West Corridor light rail line through Denver, Lakewood and Golden, locked in contract prices and authorized start of work under two construction deals.

11.5 percent budget increase would take the project from $634.7 million to $707.6 million.

$338.7 million is the contract figure with Denver Transit Construction Group. A $62.6 million contract is with Balfour Beatty. They are so-called Guaranteed Maximum Price deals, under which the contractors bear the responsibility for future cost increases.

* The only exception is that RTD has agreed to provide up to $5 million to cover some increases in construction material costs that Denver Transit Construction Group might encounter.

Fastracks North Corridor 50% Over Budget

The West Corridor isn't the only FastTracks line in trouble. The North Corridor is already 50% over budget.

http://www.masstransitmag.com/online/article.jsp?siteSection=3&id=6318&pageNum=3

For example, planners on the Fastracks North Metro Corridor from Denver Union Station through Commerce City and Thornton completed a noise analysis this year indicating they will have to include more than 10 miles of noise-blocking walls along the Union Pacific freight tracks that they plan to use for diesel-powered commuter trains.

Originally, the North Metro Corridor was budgeted for only about eight miles of noise walls.

That cost increase, from $12.7 million to $16.5 million, has yet to be reflected in the North Metro Corridor's $637.2 million share of the overall FasTracks budget. Two years ago, North Metro's estimated cost was $420 million.

Fastracks Costs : More Than Construction Inflation

Seeing Reuteman at the Denver Post arguing that the tax payers should give RTD even more money for Fastracks was annoying to say the least. Reutman's argument is based on the semi-false claims that RTD has been trumpeting this whole time. That is, the aren't getting as much in sales tax revenues as they told the voters they would and that their large construction cost increases were unforeseen. The problem is, these claims are only half-truths.

Earlier in this decade when RTD was getting ready to go to the voters we were seeing costs of commodities like copper and aluminum outpacing inflation. Steel prices were rising quickly back then. For example, Chinese consumption was increasing by 20% per year (about 1/2 of the total US annual output of steel). RTD had no business making the sort of cost assumptions back then that they did. They ignored what was happening then and they're paying the price today. It's not just that recent rises have been so steep, it's that they underestimated increases as they were happening 5-10 years ago. Recent increases make the situation that much worse.

We can see this in the West Corridor. The West Corridor was originally going to cost $508.2 million (RMN). Ac couple years after the vote, the cost had gone up to $744 million. That's a 40% increase. Even over a few years higher than projected construction costs would have not led to 40% more.

RTD trimmed down the costs for the West Corridor including reducing potential capacity by reducing station size and single tracking part of the line. That brought the cost down to $634 million. In the year since then the project cost for the West Corridor shot back up to $707.6 million (RMN).

RTD says that the lion share of that change was due to construction costs increases. How can that be? The Colorado Construction Cost Index went up 6.1% last year. Yet costs on the West corridor went up 12%. They've aleady made about $275 million worth of "cuts" on a line that was originally going to cost $508.2 million. There's more to the issue than just unanticipated construction cost increases.

RTD's Hail Mary Pass

I'm a little curious how an operation that's 80% funded by tax payers has "profits".

Denver Post :
"This is the largest developing market in public-private partnership infrastructure," said Crooks, who was in Denver last week at a national conference on public-private partnerships, or PPPs.

RTD expects private companies to bring at least $500 million of their own financing to the DIA train/Gold Line/maintenance center project.

In return, the private group would get a dedicated stream of payments from RTD for up to 50 years that would be structured to pay off construction debt, fund the operation
and maintenance of the trains and reward the consortium with some measure of profit.