Tuesday, September 10, 2013

Los Angeles's Streetcar Project Doubled in Cost, Service Will Be Less than Promised

The LA Times has a story about new cost estimates for LA's downtown streetcar project. Originally estimated at $125 million, it will now cost about $250 million because of unaccounted costs of moving utilities and some other things. The story has many interesting and distressing tidbits that may have lessons for streetcar investment (and much transport investment).

First, the good people of California and specifically Los Angeles need to stop being lied to about projects they are expected to vote on. Proposition 1A, which voters passed to provide nearly $10 billion to the state's high speed rail project, promised voters a train that has unreasonable cost and service characteristics. The downtown LA streetcar used a popular vote to raise taxes on land* to pay for what was supposed to be half of the cost of the project. Now that vote represents one-quarter of the cost, and no one knows where the balance will come from. In the story Councilmember Huizar's office says they will "aggressively pursue" other federal grants. I hope somebody has a better idea than that.

I say that the people were lied to because moving utilities is a well-known major cost associated with downtown surface rail projects. Perhaps someone thought that the utility companies would just move the utilities out of their own volition, but this is unlikely as utility relocation is subject to lawsuits and has been a big deal for other downtown LA rail projects. I do hope there is a charitable explanation as to why utility relocation was left off the initial cost estimates.

Second, the use of propositions for these projects is straining the credibility of the public sector. Not only are costs double from initial estimates, but now service will be less than promised. From the story:
"We're not losing any sleep over these numbers," Jessica Wethington McLean, the executive director for Bringing Back Broadway, told officials. "They represent a 100% perfect solution, which is very unlikely."
She referred to the expectation that engineers will modify the plans to make them more efficient. That could involve reducing the number of streetcar stops or slightly shifting the tracks to dodge utility lines.
I'm pleased that advocates for the streetcar don't care how much it costs. Bully for them. But since service is now going to be reduced with fewer stations or less convenient track alignments mean that the benefits of the system are also reduced (if the benefits are not reduced because of these expected changes than the features to be eliminated should have never been considered). Whatever the benefit-cost ratio was before, it is much worse now. Somebody should have an inkling to reconsider the project based on new information about costs and benefits. If not, then why bother with all the studies, voting, etc.? And for $250 million for a couple of miles of surface rail shouldn't you get a 100% perfect solution? That's a lot of money for compromise.

*The land tax falls disproportionately on businesses and commercial properties, which did not get to vote for the proposition. There are larger issues of representation associated with the special taxing districts commonly used to pay for these streetcar projects that I won't get into here.

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