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November 22, 2010 09:25 PM UTC

UPDATED: You be the RTD Board

  • 58 Comments
  • by: redstateblues

(From the earliest days of this state, major decisions on transportation infrastructure have driven land-use decisions and ultimately economic development.  Polster Redstateblues now asks us to play the role of the RTD board and ponder how to rescue the Fastracks plan from the economic doldrums. – promoted by Voyageur)

Wednesday Update: Kevin Flynn from RTD e-mailed me this morning about this diary. He wanted to point out, just like a few of the comments below, that this is not new money, and that it cannot be used for operating expenses (or to help shoulder the cost of fare prices.) It must be used to fund one or some of the unfunded FasTracks projects. Another important bit of information that he added was that in 2009 RTD was given full authority by the legislature to gather petitions to pose tax increase questions to the voters in the form of a ballot initiative. His e-mail follows, along with the original diary below the fold.

I appreciate the coverage in your post from Monday, “You Be The RTD Board,” but I’d also like to clarify some of the information in it. Foremost, the figure of $305 million is not a budget surplus, but rather a reduction in one project in the FasTracks program that allows for that amount to be reallocated elsewhere within the FasTracks program. It is not “new money” or extra money, as some have been reporting.  In August the winning bidder on the Eagle Project (combining the FasTracks rail lines to DIA, to Arvada-Wheat Ridge and to Westminster) came in $305 million below our budget estimate, which simply means that we can now re-allocate that amount to the partially funded FasTracks corridors. This is the decision on which RTD is now seeking stakeholder input.  Please note that FasTracks revenues cannot be reallocated to other areas such as RTD operations, they must remain within the FasTracks program..

Secondly, RTD has stated very publicly since 2007 that FasTracks needs additional funding to be completed by the original schedule.. We have been pursuing other funding since then, including the successful public-private partnership agreement on the Eagle project that brought the $305 million in deficit reduction, and will continue to do so prior to – and even after – reaching a decision on whether to ask voters for additional tax revenue.

RTD does a complete budget re-evaluation on the entire FasTracks program every year. The 2010 evaluation released last January showed a projected capital funding shortfall of approximately $2.5 billion through 2019, the currently assumed completion year.  But with this shortfall, we know we cannot complete the program in 2019 as currently assumed without new revenues. With only currently identified resources and no increase in sales taxes, revenues won’t provide for full program completion until 2042. RTD ran the financial model looking at varying levels of new sales tax.  With a one-tenth of a percent sales tax beginning in January 2012, the additional funding would result in a projected full program completion in 2035 – seven years earlier. An increase of two-tenths yields a completion year of 2027; three-tenths brings completion in 2022; four-tenths permits completion in 2018.

Finally, you stated that it is unlikely for the legislature to refer an RTD sales tax increase to metro area voters. While it used to be the case that RTD could not directly place tax referendums on the ballot, relying instead on the General Assembly to authorize it as it did in 2002 (which allowed the 2004 vote), that is no longer the case. The legislature amended RTD’s enabling statute in 2009, giving the RTD Board of Directors the authority to place tax increases on the ballot at its own discretion.

Please continue to cover this issue and feel invited to contact me for information as needed. As we all know, matters of long-term finance can be complicated and we would welcome the opportunity to clarify or provide details as these matters arise.

Thank you,

Kevin Flynn | Public Information Manager

Recently the Regional Transportation District announced that they are projecting a more than $300 million budget surplus in savings on transportation projects. Among the plans for the money are to fully fund the Gold Line–the light rail line that would run through Aurora from the Tech Center up through Fitzimmons, and up to DIA.

What do you think they should do with the surplus money?

More after the jump

Another development from the last board of directors meeting was the revelation–less surprising to those with knowledge of the project–that FasTracks won’t be completed for decades unless the voters approve another sales tax increase. RTD has a plan that calls for anywhere from a .1% to a .4% sales tax increase, a plan which could double the current FasTracks tax that was approved by voters in 2004.

Given the current appetite for tax increases among the  Republican majority in our newly elected State House of Representatives, the likelihood of such a plan being referred to the voters by the state legislature is somewhere between an ice cube’s chance in the Mojave and a Dan Maes presidential bid.

But all things being equal, what’s your plan for rescuing these badly needed transportation projects? Will the voters approve a tax increase if it appears on the ballot in the near future? Will the economy turn around in enough time to make a tax increase unnecessary? Does the state even need more rail, or is an increase in mass transit bus service the answer?

Comments

58 thoughts on “UPDATED: You be the RTD Board

  1. can’t the just save/invest the money so, in a couple of years, when they magically go broke again and need to raise fares, they can say, “hey look, we have all this extra money saved away so we don’t have to cut service and increase fares, hooray!!!”

    Nah…might as well build something new…

    1. They can do these improvements to the Gold Line with whatever money they allocate for it today. But I definitely share your skepticism that it will get done on time and on budget given their Fastrack record.

      As Voyaguer put it to me the other day when we were talking about this at the Pols meetup: RTD lives on a separate planet from the rest of Colorado. One in which tax increases are immediately approved without a second thought, and people have no memory of broken promises on public transportation projects.

    2. but fees have been raised significantly, and they’ve always seemed to be in crisis mode. Even when ridership shot up a few years ago due to high gas prices, RTD said it was out of money and raised fees. Then gas prices went down although ridership stayed higher than it had been, and for some reason RTD was still out of money.

      I guess the concern is the same a lot of government employees/agencies have: if they don’t spend everything they can, their services get considered inessential and are first in line when the state budget needs to be cut. There’s no real reward for a government agency to be efficient: an agency that wisely saves its funds for rough years will have its budget cut by short-sighted Republicans who want money for tax cuts next year.

          1. You own five houses and your mortgage is delinquent on three of them.  You owe $2000 a month on each mortgage, $10,000 a month in all.

            You unexpectedly get a $300 debate one two of the mortgages that you are current on.  Which one of the delinquent mortgages do you want to apply the $300 too. But while capital construction money can’t be switched, I think it is a big mistake to raise fares during this downturn.  They should cut operating expenses instead, perhaps by reducing service on under used lines.  This is an opportunity to get more people taking the bus and rail, not to reduce the ridership by fare increases.

            1. Public transportation needs to be affordable for those who need it most.  It still is in Chicago.  

              Know how much it costs to take CTA all the way from the Skokie in the northwest ‘burbs to Midway, the south side airport? $2.25. You know how long you have to wait between lines when you transfer? Generally between no time, just step across to the  next train or no more than two minutes.  The longest wait I ever experienced is at the Skokie Swift, a feeder line that just shuttles between the Swift station and the Howard Street El.  It only leaves every seven minutes.  

              So if you’re down on your luck, no car but you can find a job you can afford to get there and it doesn’t take two or the three times as long as if you were driving.  In rush hour traffic it will be quicker. It’s great. Growing up, not a single suburban dad I knew drove to work in the city.

              It’s also extremely unscary. When we were there this past June it was just as non-threatening and people in all parts of town were just as friendly and helpful if they saw you looking a little confused as when we used to take it as kids in the 60s. We went everywhere by ourselves before we were 12 and could afford it on our meager allowances. Kids could still afford it today if parents would let them out from under adult supervision. I wouldn’t trade all the games and gizmos in the world for the independence we had as kids but that’s another subject.

    3. This “surplus” is projected as unspent funds from the capital construction budget that will be funded by bonds underwritten by the .4 percent sales tax increase we approved the last go-around.  It must, by law, be applied to other capital construction needs — in short, instead of being 2.2 billion short of being able to finish the system by 2018, they are 1.9 billion short.  Or something like that.  The operating funds, in contrast, come from the .6 percent sales tax that is not earmarked for construction bonds and the fares, which by law are supposed to provide 30 percent of operating funds.

        In essence, you have two different earmarked revenue streams between capital construction and operating.  

      1. my post and opinions are not subject to silly things like “earmarked revenue streams” and “law,” whatever those are.  That’s just a bunch of crazy commusocialist government gobbledygook, if you ask me.  :p

        Seriously though, they should really just wait to do anything until the tax increase they’re planning passes or fails.

        1. RTD can’t even ask the voters for an increase.  The legislature has to authorize them to seek such a vote.  Last time, the legislature authorized them to do an initiative.  But there is no regional initiative process, so the legislature must pass special authorization each time.

            I can’t wait to see what happens when RTD treks up the hill to ask for the “Frank McNulty Memorial Rapid Transit Tax Increase” authorization election.

            It will never get out of committee and it will thus be at least 2013 before you can even think about asking for a tax hike in earnest.

               

  2. is the rail projects proposed to go from Denver to Boulder and into Longmont. I wouldn’t mind at all if those were eliminated. I think they seemed like a nice idea when they were approved, but the fact that the trains are all going to be diesel and the noise problem wasn’t solved means train service really isn’t going to make things substantially better for people. It’s not like they would have been substantially faster than the current bus service is in any case. As someone from the East Coast, I love rail service, but we don’t really need commuter rail here. In New York or Boston or Philadelphia it’s fantastic since traffic there is so awful, but traffic here just isn’t comparable.

    I’m happier with the improvements in bus service along Route 36. The horrible Broomfield Park and Ride (which required left turns on three red lights) was closed and replaced with a much faster one, and similar improvements to the intermediate stops have made things much faster. There was an idea for Bus Rapid Transit which would involve dedicating some space for buses, which I like. How about putting the HOV lanes back? I don’t care if they’re unpopular; behavior needs to change both for the environment and for traffic, and drivers really can’t consider themselves entitled to everything they want for free anymore without worrying about externalities.

    And probably my biggest pet peeve as a Boulder transit user is the ridiculous number of stops in Boulder for the long distance bus rides. I go to the main station when I want to get to the airport; so do my friends who lives two miles north in Boulder. So why can’t someone who lives on Broadway walk two blocks instead of one to get to one of the main stops? The bus literally stops every two blocks to pick up and drop off lazy college students, and especially on the airport bus it adds about 10 minutes to every trip (since each time the driver has to get off to load their suitcases).

    Oh, and redstateblues is an asshole and a douchebag. Look at this diary. It’s so short and…not that good. It feels like it was written while in a haze of fear over actually taking a stand and making a proposal, instead dodging every possible issue by framing it in the standard “I’m not saying this thing you disagree with, I’m just asking questions!” style beloved by right wing hacks like Glenn “MC Peepants” Beck. I guess this is truly redstateblues’ last gasp at credibility before descending into an attention-starved Republican-lite preener like the rest of you fuckers. What’s going on, is there a front page editor election coming up?

    (Sorry RSB, but I think this is the only way I can get people to read my longer posts.)

        1. In the end I was just grateful to get the kind that folds, especially after you started throwing nickels. Seriously, Voyageur. Who throws nickels at a stripper?  

    1. Seriously though, you’re right about the Boulder-Longmont lines being somewhat unnecessary. The rapid transit improvements would probably be far more beneficial.

      I just have a sinking feeling that since they were included in what voters originally passed, there might be something requiring them to be built.

      1. I agree the bus rapid transit stuff is much higher priority.  Without a tax increase, it may be 2040 or 2050 before commuter rail reaches longmont.  But frankly, the numbers suck and I really doubt that voters would approve a tax hike for such a low-priority project.  

    2. The HOV lanes make commuting to Denver so simple along US 36. I would love to see RTD drop that FasTracks portion as well and focus on extending the HOV lanes further west. I used to take the bus from the Westminster PnR and it was a breeze.

      You’re right about having to change behavior too. I wasn’t a fan of the HOT lanes because to me, it seemed better for those who were stuck on the highway to see the buses zooming along and think, hmmm, maybe I could be getting to work faster too? (yeah, I know, I’m an idealistic dork). But now that the HOT lanes are in place, CDOT will never give up that revenue… and really who can blame them?

      1. is that they automatically provide free access to RTD.  Thus, a new HOT lane is also a Bus Rapid Transit lane.  I believe in rapid transit and that includes express buses, if they can move rapidly — i.e., they aren’t stalled in traffic.  If toll-paying hot users help finance those lanes, that’s one way to create them in our present fiscal straits.

        1. I just had the perspective of being an HOV lane fan and long-time bus rider, then suddenly all the HOT users showed up and to me they felt a little bit like interlopers. But yes, given how little chance the state has to take care of our transportation needs within current funding constraints, I did eventually realize they were a good thing. (Guess I was initially a little crabby about the notion of buying your way to the front of the line!)

          Have there been any new HOT lanes added recently?  

  3. You’re making it sound as if the RTD Board is screwing over the riding public by increasing fares and cutting service at the same time that the agency is rolling in dough. Not so!

    The $300 million is based on savings due to RTD doing a damn great job of getting bids in for the rail lines out for the airport and Wheat Ridge way under budget. “On time and under budget” is a mantra that RTD has done a really good job with over the past nearly 2 decades: all the rail lines built to date have been on time and under budget.

    That $300 million can’t be used for operating expenses. But it CAN be used to try to kick-start other Fastracks construction. But even so, a tax increase will still be needed if we’re going to get the rest of Fastracks built anywhere near the original completion date. Why? Due to the unprecedented near-depression we’ve been in.

    Fastracks was passed while our economy was booming. Since then the economy has collapsed and with it the sales taxes upon which the Fastracks construction project relies for funding.

    1. When was the last one completed? And as far as on time and underbudget, FasTracks is now about $2 billion over budget.

      I’m not blaming the entire situation on RTD–obviously when there’s a recession and sales tax revenues drop sharply, it’s going to be a challenge to complete an ambitious project like FasTracks.

      What irks me more is the political tone deaf RTD board saying, “Oh, we have all kinds of options for how to complete FasTracks, we could do a sales tax increase… or hey, what about a sales tax increase? Maybe we should just do a sales tax increase. Then they can just snap their fingers and [poof] a sales tax increase will pass. YAY!!!

      1. It’s not so much “over budget” as “under revenued.”  In short, the cost of the projects hasn’t risen so much, in year of construction dollars, as the amount of money projected to be raised by the sales tax increase has fallen — and with it the size of the bonds that can be leveraged with that revenue stream.

          Think of it this way:  You leased a new car for $300 a month, thinking you would pay for that from your $2,000 a month salary.  Now, your salary has been cut to $1,500.  Since you still have to pay for your home mortgage and copious amounts of beer at pols meet-ups, it’s harder than anticipated to make that $300 a month lease payment.

          Or something like that.  Actually, costs of raw materials like steel, cement and copper were going up sharply when they first sounded an alarm but I suspect the global recession has brought them down a bit — but not as much as revenue itself has dropped.

          1. as allyncooper accurately notes, we have seen cost estimates rise even as revenue estimates drop.   Exactly how we get rising raw material and labor costs in a recession is a question that eludes me.

            1. China’s purchasing of raw materials and bldg. basic materials has slowed, but they’re still growing, still driving up commodity prices. Less so than in the pre-recession, but still happening.

    2. I wasn’t suggesting the $300 million is used on something other than construction. I was trying to see if the Aurora plan was the best one, or if there was a better place to construct new lines.

    3. There’s no question revenues are down because of the economy. But the truth is, RTD started admitting their corridor acquisition and hard construction costs were ballooning before the recession hit. This lays RTD open to the legitimate question did they “lowball” the numbers to get it passed?

      I don’t know if they did or not, but it will certainly be used as a rational against any tax increase by the opposition (read Caldera and others initially opposed to FasTracks), whose “I told you so” criticism may ring with the voters as well founded.  

      1. And the lowball issue is a legitimate one.  I’m just noting the difference comes from both falling revenue and rising cost.  I also am wondering whether the cost increases cited for things like steel, concrete and copper haven’t dropped in the wake of the recession.  Have you seen any new estimates on those points?

         My attitude, quite simply, is that I am not prepared to vote for any tax increases until I am convinced the RTD has managed its current revenue responsibly.  I worked very hard to pass FasTracks and my current attitude is

        “Fool me once, shame on you.  Fool we twice, shame on me.”

        1. I can appreciate the difficulty of trying to cost out such a large multi-year project. A lot of things can happen over such a long time span (and did with the Great Recession). Construction costs have come down somewhat in general due to the moribund state of the construction industry, although I don’t know specifically how that relates to a major transportation project like FasTracks. But assuming construction costs have come down somewhat, RTD appears to have been so off the mark initially on its cost estimates it’s a legitimate concern on how those numbers were generated and presented to the voters.

          I would assume RTD did revenue and cost computer modeling plugging in various numbers determined by factors like “what if steel (or concrete) goes up x amount?”, what if ROW acquisition costs x amount more?” and “what if projected revenues drop by x amount?” It’s not rocket science, so my issue would be were the “what if” scenarios given proper consideration in generating the numbers, or were they minimized for political considerations, i.e. to get FasTracks passed?

          In summary, was transparency compromised so that FasTracks could be all things to all parties? Clearly, we are now faced with a situation where some parties aren’t going to get what was represented to them. And therein lies the political problem.

          I believe your guarded skepticism of a tax increase will be the prevalent stance of many, including me. This comes down to politics, and as always politics comes down to perception.  

  4. I had heard that fares would be going up to $3 next year. Use that surplus to make sure fares don’t go up for the poorest folks.

    $3 to ride the bus one way (even with a transfer) is highway robbery.

    1. It’s pretty much impossible to steal a fare on the bus, but I would argue that more people steal a fare than pay for it on the light rail. Many of the people who use it are students whose passes are paid for in their fees each semester, but the way that the system works, it’s too easy to steal light rail service.

      The Wackenhut security, the RTD fare checkers, and the DPD can only do so much to enforce the law so that fares are paid, but it’s not like you can check a packed morning rush hour train.

      But sadly, like HGF and Voyaguer have pointed out, these funds can’t be used for operating expenses. They have to be used on construction. The only way that fares aren’t going up and up and up will be if the economy starts growing at a more robust pace than it is.

    2. A quarter more than the current amount.

      Even if it did go to $3 it would still be cheaper than most other public transit systems in the US. Ever try to take the bus in San Francisco? An expensive nightmare.

      I do not own a car so I rely on RTD to get around. For the most part, it does an excellent job. There are minor tweaks here and there I would make if I were the God of Public Transportation, but I’m not.

      I still find RTD immensely cheaper than owning a car, and usually cheaper than camparable services in other cities. If the fare goes up another $.25, I’m Ok with that.

      As for more sales tax, though, I would have to look at the details more closely. The line going out through Jeffco and airport line are sorely needed, but I am not so sure about the Boulder and Longmont commuter rail lines.

      Not exactly an RTD issue, but it does chap my hide that FREX does not stop in Castle Rock.

  5. the key problem is that fares are fixed by the type of busline rather than distance. So, if I take a bus from my Denver Highlands home to Downtown,I pay the same fare if I drive across the city to the VA Hospital.

    If I take Light Rail from the Union Station stop to DU to watch Hockey, it’s one fare. If I take it all the way to Park Meadows mall,I pay more. Skyride works the same way.

    I’d retrofit all buses with the same fare system they use in DC – a RF reader fare that uses reloadable smart cards. That would be in at the entrance of the bus and the exit. If you pay with that fare, you always get the lowest price. IF you pay cash, you pay the maximum for that line.

    Fares would then be set by distance. If you just want to take a short ride (2miles or less)you’d pay the circulator fare of say .50. With each distance boundary, you’d pay more when you get off.

    So getting on the bus would be free with a card, and you’d never have to interact with the bus driver. Once you get off, you pay. If you go over, your card has a deficit ( but I’d set a max, say $5) that you’d have to pay when you reloaded it.

    To encourage people to not stick it to RTD by barely loading their cards, I’d adopt the pre-paid cell phone model and give you more “fare” for each cash load-up, and extend the duration of the credit. So if you load $20, it lasts a month. Put on $100 and it lasts all year, and it’s worth $110.

    It’d probably cost a bundle to fit every bus with this reader, but there still might be stimulus cash to match it with.

    Thoughts?  

    1. DC has this, Miami does – two I’m familiar with.  It’s a heck of a lot easier for the drivers too.

      Couldn’t do it with this $, since it’s capital constr. vs ops., but RTD should at least have such a system priced and under consideration for the future.

  6. RTD had considered asking for a tax increase last year, but put it off hoping for a better economy. That’s not happening fast enough due to the slow pace of our “jobless” recovery (state unemployment is actually a bit higher now than at last year). Now there is an anti-tax sentiment as personified in the Republican majority in the House as well as the electorate in general.

    The $305 million windfall from the private consortium deal will be a political football. FasTracks was approved by the voters in large part because local politicians got behind it as a benefit to their towns and communities. The local pols who supported FasTracks will be hard pressed to support a possible doubling of the tax to get their corridor built when they were told the .4 cents would get it done.

    Reading the Aurora Sentinel article, RTD Board Member Tom Tobiassen (representing Aurora) discusses the options, obviously the best one from his perspective is to use the money for the Aurora corridor. But that leaves out the other corridors.

    Another option is to use the money to complete only the final designs for each corridor. Kevin Flynn, spokesman for the EagleP3 Project says “I can see benefits in every single one of them (the options). He’s blowing smoke, since using the money only for design of the corridors in the absence of money (i.e. a tax increase) to actually construct them is ridiculous.    

    No matter how the $305 is spent, there will be more losers than winners, and that inevitably takes RTD back to the reality FasTracks can’t be built as originally sold to the voters without a substantial tax increase. And that’s not likely to happen.

    Caldera is licking his chops already.  

  7. The Anschutz campus is becoming a bigger economic engine all the time.  A long-term investment like light rail there may have very good eco devo payoff in time.  If I were a board member, I’d look closely at that one.  A connection from the Tech Center to Anschutz to the airport would be amazing.  

  8. 1)Where should the 305M dollars be spent?

    Spent equitably between the rail lines that have not received any funding for construction. There are lines that have/are receiving construction funding already (Federal Funding and RTD funding). The lines that have not received any CONSTRUCTION funding should be allocated the funding so construction can get started on those lines also. That is the only equitable thing to do. It would not be equitable to put that funding toward the rail lines already receiving the Federal or RTD funding or to the lines that are almost completed. If RTD’s goal, which I truly hope it is, that the entire SYSTEM be built out and completed then this is the best way to go. If RTD decides that some of the funding should go toward the construction of lines that have already started construction or are being funded already then RTD will be pitting one community over the other, one rail line over the other. Finish the ENTIRE SYSTEM and quit choosing winners and losers damn it.

    2) Should there be a .1%,.2%,.3% or .4% sales tax?

    Place two questions on the ballot.

    Q1-Shall the current .1% Stadium Tax (that sunsets/ends in 2011) be converted to fund the passenger rail system WITHOUT raising any new taxes?

    Q2- Shall a .3% Sales Tax be started to completely fund and finish the entire passenger rail system by 2019?

    If Q1 passes then it helps with the funding but will still take another 30 years to complete the entire system. If both Q1 and Q2 pass then we get the rail system we deserve and what was initially promised by RTD in 2006. Let’s get it done.

    YES ON 1 and 2! FOR AFFORDABLE PASSENGER RAIL TRANSPORTATION FOR THE ENTIRE METRO AREA. Time to hire a campaign team.

    1. But I disagree on the first part. I think if there’s the potential for both a rail line to and from the airport, and a major infrastructure improvement in one area, then that would be better than building 4 or 5 miles of rail in every unfunded FasTracks project. Plus, it appears that the Aurora plan has the public-private partnerships already lined up. I’d be eager to see if there is a plan for other specific areas though.

      I think your best shot at finishing FasTracks is to do it in chunks. I bet the voters would be ok with extending the Stadium tax into a FasTracks revenue stream, but I doubt they would approve a .3% increase on top of that.

  9. Kevin’s e-mail included another fact that brought light on something that was touched on in the comments. It was as early as 2007 when RTD first announced that it was increasing cost projections. That is before the economy hit rock bottom, so obviously it wasn’t just a severe drop in sales tax revenue that caused the cost estimation for FasTracks to rise.

    This will play into the political ramifications of asking the voters for another tax increase. Another thing to keep in mind is that RTD will not be the only group trying to get a tax increase passed in the next few years. A clogged ballot will have the same effect that it’s had for the past two cycles–nearly everything will go down in flames.

    These projects are, for the most part, necessary for the state’s longterm economic health, but we need to be having a frank conversation on these costs. Voters will definitely be doing that in 2011, 2012 and beyond.

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