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Finance Vancouver

Vancouver's TransLink Faces Serious Funding Gap

» Meeting long-term transport needs will require a major new governmental commitment, as well as new financing options like central-city tolling.

This week, metro Vancouver’s TransLink presented three options for the region’s elected officials: with an infusion of new cash, the transit authority could dramatically improve service and expand rapid transit along three new corridors; it could maintain the status quo and cut bus service by 40%; or, it could do something in between. Politicians in the region’s cities and in Victoria, the capital of British Columbia, have until October 31st to make up their minds. They’ll either have to find significant new funding sources or face dramatic cuts in transit service.

Though Vancouver is currently building a new rapid transit project called the Canada Line and is investing in a downtown streetcar project in time for the 2010 Olympics, the picture isn’t all rosy. TransLink faces a $4.6 billion funding gap between now and 2020. Municipalities and regional officials have a responsibility to come forward with $450 million of new annual funding if long-planned projects such as the Evergreen Line and Broadway extension of the Millennium Line are to be pursued. No funding at all would devastate plans to encourage more of the region’s population to choose transit over driving.

Three Options for Vancouver
No new financing $260 m more annually $450 m more annually
Bus service 40% reduction 10% increase 20% increase
# New buses Few 160 400
# New trains 48 100 138
Major expansions None None Evergreen Line, Broadway Extension, Surrey Extension
Station upgrades None Expo Line Expo Line
Cycling programs $1.2 m/year $10 m/year $23 m/year

——

Mayors are adamantly opposed to any proposals that would result in such reduced transit service as TransLink has suggested in the “no new financing” plan shown above. Cities alone would be able to raise about $275 million yearly from local revenues. Mayors may choose to levy automobile users an average of $122 a vehicle, with those in more polluting cars paying more. They could also increase taxes on parking, introduce higher gas taxes, and augment transit fares. Implementing all of these new funding solutions would allow the compromise plan to be implemented, basically allowing for a slight increase in transit provision.

TransLink is also proposing an even less expensive $130 million solution that would eliminate the need to levy an automobile fee but that would avert service cuts. Local officials have argued that an increase in property taxes would be politically infeasible.

Yet in order to fund transit service expansion at a cost of $450 million a year, British Columbia will have to get involved. Thus far, transport minister Shirley Bond has suggested that she isn’t a major supporter of rapid transit expansion. Nonetheless, mayors are continuing talks with provincial officials to find more money.

The province could choose to toll automobilists for bridge use or charge a vehicles miles traveled tax. Tolling drivers to enter the city core would be an effective incentive to take the bus or train. Together, at reasonable rates, these fees would raise $175 million a year. It’s unclear whether British Columbia officials will find such major new fees acceptable, but if there’s a consensus on the necessity of transit expansion in the region, someone’s going to have to find the money somewhere.

Categories
Finance

American Transport Policy, Stuck in Highway Mode

» The highway and transit lobbies are mutually dependent, with the much more powerful roads interest playing the dominant role.

Beginning in the early 1960s, a coalition of mayors, environmentalists, neighborhood groups, and other supporters of cities worked to expand federal aid to transit, arguing that the massive investment in the Interstate Highway System was depriving urban areas of their well-being. They suggested that more investment in public transportation was a necessary antidote to the destruction caused to inner-city communities as a result of megalomaniacal post-war planning efforts. In many ways, their work was successful even in the early years — Congress invested in new rapid transit networks in Washington, San Francisco, and Atlanta, and by 1975, the government was contributing 28% of all nationwide spending on public transportation. Its share had been only 1% just ten years before.

Yet, as Alan Altshuler and David Luberoff describe it in Mega-Projects: the Changing Politics of Urban Public Investment, the transit lobby has been systematically linked up with highway proponents since the early 1970s. They write:

“This coalition… achieved its greated victories in the early 1970s — mainly by threatening to oppose continued federal highway aid unless prohighway forced joined them in securing large scale funding for transit as well. Though highway interests resisted at first, they eventually acquiesced as part of a strategy to counter the dual effects of growing antihighway sentiment in major cities and presidential efforts, for general budgetary reasons, to curtail highway spending.” (176-177)

In other words, by blackmailing the roads lobby into believing that its existence would be threatened by much stronger anti-highway forces, transit was able to jump on the federal transportation bandwagon. The strategy was quite effective: even during the government-service-reducing Reagan years, federal involvement in public transportation continued unabated (though it is true that a short-lived federal operating aid program lost funds).

Indeed, both transit and highways lobbying groups work to increase transportation funding as a whole, rarely suggesting that funds from one side of the table be transferred to the other. The roughly 3:1 revenue split between roads and public transportation at the federal level has been maintained as status quo for years, and even Representative Jim Oberstar’s (D-MN) relatively progressive bill this year does little to increase transit aid relative to that devoted to roads — the general push has simply been for more transportation money in general.

Highway proponents, led by groups like the American Association of State Highway and Transportation Officials (AASHTO), cannot argue against transit because of a widespread sense that a transportation funding bill will continue receiving support from Congresspeople representing urban areas only if it includes a significant share devoted to transit.

Transit-backers, meanwhile, have no choice but to support huge highway allocations if they want a transportation bill to pass in the rural and suburban-oriented Senate. Even Transportation For America (T4A), an organization whose mission includes fighting climate change and reducing car use, did not specifically advocate a expansion of transit aid and consequent decline in highway spending in its platform, couching its goals in ambiguous phrases like “efficiency” and “economic competitiveness.” The transportation bill ultimately has to pass, and the only way it has happened thus far is by forging an alliance between proponents of both modes. The same will have to be true this year or next, whenever Congress gets down to reauthorizing the existing legislation.

The political inevitability of the roads/public transportation coalition makes it difficult to envision a federal transportation bill with spending priorities on transit rather than highways. Considering the makeup of Congress, it would be impossible for transit advocates to stake out a position on their own and expect the support of a majority of legislators. The largely automobile-driving constituency of said congresspeople is unlikely to change dramatically save for major unforeseen increases in fuel prices. Wide-scale reductions in roads spending in favor of transit capital expenditures at the federal level, therefore, are unlikely for the envisionable future.

Categories
Light Rail Minneapolis

University of Minnesota Wants More Mitigation for Central Corridor LRT

Twin Cities Central CorridorProposed “floating slab” is claimed necessary to protect lab space.

When it’s completed in five years, the Central Corridor will connect downtown Minneapolis with the state capital 11 miles down the road in St. Paul, and it’s expected to become the Twin Cities’ most popular transit line. But opposition from prominent landholders along the route — including the University of Minnesota and Minnesota Public Radio — continues to challenge the project proponents’ contention that they will be able to maintain reasonable completion costs.

A little more than five years ago, Minneapolis opened its Hiawatha Light Rail line to great acclaim, and the project has been very successful. So much so, in fact, that the Metro Council, which directs transportation expenditures in the Twin Cities and the surrounding region, is currently extending station platforms along the line to support three-car trains.

You would think, then, that the completion of the area’s next major transit project couldn’t come soon enough. Indeed, the Central Corridor will be one of the most exciting new public transportation lines in the country when it opens in 2014, as long as the Federal Transit Administration commits to federal aid this year or next. It’s expected to attract more than 40,000 riders a day by 2030. At a cost of $914 million for the line, the program is at the middle of the pack in construction costs.

Yet the Central Corridor has been mired in controversy since serious planning began in 2001. For years, the University of Minnesota argued that it wouldn’t allow trains down Washington Avenue through the center of campus unless they were placed in a tunnel. Problem is, that would add hundreds of millions of dollars to the project’s cost and the University wasn’t willing to chip in. Alternative routings were cumbersome and would poorly serve the student population.

Homeowners and business groups along University Avenue, the principal section of the line, complained that it would increase noise, reduce parking spaces, and hamper retail activity. They argued that the system wouldn’t have enough stops to serve the community adequately.

Meanwhile, in downtown St. Paul, Minnesota Public Radio and other groups along Cedar Street claimed that light rail operations will cause vibrations that make work there impossible. Note that MPR moved into its offices after planning had begun on the project.

These, among others, are some of the hurdles typically faced by transit planners, who find that providing better transportation to a community isn’t as simple as building the line. In some cases, staff at the Met Council have agreed to changes — they’re planning to install what’s known as a “floating slab track” on Cedar Street to make sure that MPR’s nationally-syndicated broadcasts aren’t negatively affected. They’ve committed to adding more stops on University Avenues if they can find the funds. And the area of Washington Avenue in the midst of campus activities at the University will be transformed into a pedestrian-friendly transit mall.

Still, some want more. The University now suggests that the floating slab should be installed on Washington Avenue as well, since it has research facilities there. But the Met Council hadn’t planned on the technology and therefore would have to commit millions more to design and implementation. More importantly, light rail running on tracks without the expensive floating slab would produce less vibration than some existing construction activities on campus. If the sensitive research can be performed with that going on, what difference would a light rail system make?

Central Corridor will eventually be built, and the University of Minnesota will likely come to see the line as an integral part of campus life. The same will probably be said of the people living along University Avenue and those working on Cedar. But the Met Council has to survive months more of these relatively serious demands for mitigation before it will be able to start construction. It will probably have to agree to pay for some improvements, which will either mean a reduced ability to compete for competitive federal New Start funds or decreased quality of stations and services along the rest of the line.

The Twin Cities aren’t alone in facing the community demands placed on public sector infrastructure projects. Since the devastating consequences of urban renewal and inner-city highway construction became all too clear, neighborhoods have been ensuring that their best interests are being represented. That usually means strong opposition to projects such as this, even though the benefits likely to arise from improved public transportation are manifold. It also means that when a project can’t be stopped, people expect some form of payback, usually in the form of expensive compensation. Ultimately, that increases construction costs and lower trust in the ability of government to get estimates right the first time. Such are the costs of infrastructure creation today.

Image above: Central Corridor map, from Metro Council

Categories
Finance

Veolia and Transdev, Transport Operators, Propose Huge Merger

Domination of new company puts into question the role of private operators.

Neo-liberalism has become the defining approach most western political systems take to developed their economies after the fall of the Berlin Wall The repeated failure of left-oriented regimes to articulate a popular alternative to corporate welfare and reductions in government size hasn’t helped much. One prominent consequence in Europe and North America has been a privatization of formerly public services. This embrace of the so-called Washington Consensus has had a major effect on public transportation systems, which remain largely owned by local, regional, and national governments, but whose operations increasingly are being transferred to private firms.

I have no interest in extolling the value of these corporations, and their profit motive is likely resulting in less-than-ideal service provision, but the outsourcing of transit operations is undoubtedly producing a massive new industry whose business should be of interest to those in the public transportation trade.

In the U.S., Veolia Transport already manages the operations of Tri-Rail in Miami, New Orleans RTA, San Diego Sprinter, and Los Angeles Metrolink, among others. Though most large cities in Europe and the U.S. continue to run their own services through municipal or regional authorities, the tirades of conservatives against government control will likely result in more and more such operations being transferred to private control. In general, these private operators bid to provide a service that a city requests and then get a contract derived from city funds that lasts several years. There’s little proof that private contractors do this work any better than the public authorities had done it before.

The basic idea? Private profit at public expense.

Nonetheless, four large companies — Veolia Transport, Arriva, Transdev, and Keolis — are leading the way, and making big bucks doing it. Except for Arriva, which is British, the other three companies are French, and tightly aligned with the French government, which invests directly in the companies. Veolia Environnement, which is France’s largest private employer, and whose interests also involve water, waste, and energy distribution, is 10% owned by the Caisse des dépôts et consignations (CDC), which is a sovereign funds investor that funds infrastructure projects and major French companies. Transdev is a direct affiliate of the CDC (70%) and also connected financially with RATP (25%), Paris’ transport operator and a French government subsidiary. Keolis is 55% owned by SNCF French rail, a government subsidiary, and 26% controlled by the Caisse de dépôt of Québec, similar to its French counterpart.

Veolia, which has been having financial difficulties with its transport unit, recently announced its interest in acquiring Transdev. The operation is supported by the CDC and (its ultimate leader) French President Nicolas Sarkozy, a staunch supporter of the privatization of public services. The new company would have 130,000 employees, annual revenues of €8 billion, and be 50% controlled by CDC, 50% by Veolia. The merger would be finalized in early 2010 if it comes through. As part of the deal, SNCF, in affiliation with Eurotunnel, will assume control of Veolia’s cargo operations in France and Germany.

The merged company would control 42% of the French transit market, and collectivities in the country are already worrying about the merger’s effect on competition. Less of it could mean increased costs for municipalities looking to outsource their bus and train networks.

As these companies expand, the French government and its private interest are making their mark on transit service provision around the world. SNCF, which has taken control of Eurostar and has a managing stake in the Italian upstart NTV, is planning a similar take-over of European high-speed operations as they’re opened to privatization; SNCF has made well-known its interest in operating American services such as California High-Speed Rail. This isn’t necessarily a bad thing — anyone who has visited French cities knows the quality and reliability of service provided there.

But French transit and rail services work so well because there’s a strong political will to support their well-being, even when they’re privately run. Is that true in the U.S.? Will private operations run by mammoth European corporations be supported adequately by public subsidies? Or will this de-governmentalization of service provision mean lower wages for workers, less safety, and a general disinterest from the public perspective in continued investment in alternative transportation?

I don’t have the answers to these questions, but they’re worth asking as global corporations take command of driving our buses and trains here, there, and everywhere.

Categories
Boston Metro Rail

MBTA Moves Forward With Blue Line Extension Planning

MBTA Blue Line Extension MapLong-planned link between Revere to Lynn, however, still lacks funding source.

Yesterday, the Government of Massachusetts announced that it would sponsor the completion of a planning report on a northeast extension of the MBTA Blue Line. The completion of the Draft Environmental Impact Study, which is a required step on the path to building a major infrastructure project in the United States, will demand about $300,000 in consulting fees. Yet this new guarantee of planning funds in no way ensures the eventual completion of the project, which would stretch from the Blue Line’s existing terminus at Wonderland to Lynn, several miles up the North Shore. Boston’s transit agency is mired in billions of dollars of debt and has a number of projects that are being prioritized over this extension.

The Blue Line opened in 1904 to streetcar operations and was converted to rapid transit technology in 1924. It is the shortest of the MBTA’s several rail transit lines and attracts 67,000 riders a day — high for most transit systems, but not Boston, whose three other lines each carry more than 100,000 daily users.

Massachusetts has been planning for a lengthening of the line to Lynn for years, with state legislators approving a bill in 2004 that committed a 50% funding match if federal dollars to cover the rest of the project’s cost could be found. The project’s eventual construction cost will be more than $600 million. The study will determine the environmental and neighborhood impacts of the project’s route. With the DEIS completed, MBTA could theoretically begin applying for New Starts construction dollars from Washington.

Yet, the Boston region has concentrated funding on other transit priorities. A 0.4-mile Blue Line extension south from Bowdoin to the Charles/MGH Station, where it would meet the Red Line, recently received $29 million in design money from the state, though there is no guarantee the $300 million project will be built. Meanwhile, the light rail Green Line would be stretched from Lechmere into Somerville and beyond if planners on that side of the Charles River get their way — and find more than $900 million. Boston’s Silver Line busway is under constant improvement and will be stretched south along Washington Street. None of these projects are fully funded and the MBTA, which spends 30% of its operating budget to service its more than $5 billion debt, isn’t exactly ready to commit to more transit service.

The above projects were included in the Central Artery/Tunnel (Big Dig) settlement process approved by the state in 1990 as part of a deal to mitigate the impacts of expanding highway capacity through the region’s core, which means they’re prioritized, if Massachusetts is ever capable of finding the tax revenues to cover their cost. The Blue Line expansion to Lynn was not included in that deal as far as I know.

Perhaps even more problematically for the Lynn Blue Line extension, cities along the route have been ignoring MBTA’s demand to reserve right-of-way for the project. The city of Revere allowed the construction of a condominium and parking garage directly in the path of the proposed track, so the MBTA will either have to pay to buy and demolish that building, or it will have to realign the route through a marsh. Either “solution” will increase costs exponentially. It’s unclear why Revere wouldn’t be responsible for covering these new costs.

Just as importantly, a Lynn extension may not be the best investment for Boston. Lynn is already served by MBTA commuter rail, which offers 20-minute service to North Station throughout the day. Also, there are significant arguments to be made for a prioritization of the Green Line, which will serve already dense areas of the region and encourage infill and transit-oriented growth.

Image above: Blue Line extension map, from Future MBTA