As many of you already know, Metro is pursuing federal legislation to speed up construction of Measure R projects. The plan as originally conceived was called the 30/10 Initiative — meaning it seeks to build 30 years of Measure R projects in 10 years with the use of federal loans and other financing.
Some members of Congress have shown an interest in such a plan. So have many groups around the country, including the U.S. Conference of Mayors and the U.S. Chamber of Commerce. That’s the reason that Los Angeles Mayor Antonio Villaraigosa has lately taken to calling the plan “America Fast Forward.”
The national interest is because 30/10 is not just a plan to help Los Angeles County. It could help transit agencies around the country that have raised local funds but need help getting enough money to actually begin construction of projects.
With that in mind, this is the first in a series of posts about other regions that are trying — much like Metro — to expand their transit systems. We’re going to start in Colorado, where there are some striking similarities to efforts to fully realize Measure R here.
On Election Day in November 2004, Denver-area voters approved a $4.7-billion investment in their mobility and future called FasTracks.
At the time, the metropolitan area was sprawling along the Front Range of the Rockies and freeways were becoming increasingly congested. Air pollution was getting worse too, fouling the very reason so many have chosen to live in Colorado. In 1995, a new airport opened on the prairie 25 miles east of the city center, requiring a long drive to reach for residents and visitors alike.
FasTracks was an attempt to dramatically revamp how the region got around. The plan — at the time the largest in America — was to add 119 miles of light rail, commuter rail and busways by 2017 to link otherwise disconnected suburbs to one another and to downtown Denver. And do it in 12 years.
Similar to Los Angeles County’s Measure R, FasTracks is funded by a local sales tax increase, in this case an extra four cents on every 10 dollars spent.
Since its passage, Denver’s Regional Transportation District (RTD)– the public agency charged with implementing FasTracks — has faced challenges on two fronts. In the years immediately following its passage, booming costs of construction materials drove up estimates for the project. Then, as the global recession set in, revenues from the sales tax declined.
I talked with Pauletta Tonilas, FasTracks Public Information Officer, to get the details on how a 30/10-style program could bolster Denver’s transit construction projects, as well as how Denver is making it work in difficult times.
Starting with the latter, back in 2007, RTD entered into a Federal Transit Authority pilot program that helped RTD negotiate with a consortium of contractors to build nearly 35 miles of commuter and light rail.
The program is called Eagle P3: The the contractors pitched in $450 million in loans up front to build that large chunk of FasTracks in just a few years. And in June, the RTD is set to receive a grant of $1 billion from the FTA to be paid out over several years to round out the program. Once the new rail lines open to the public, the contracting team will then operate the lines while RTD pays back the loans with interest over 28 years. In essence, Tonilas said, it works like a home mortgage.
The buyer puts some money down up front and then borrows the rest, which is paid back over a number of years to the bank. The buyer benefits by getting to move in right away. Or in Denver’s case, building transit lines right away, instead of having to wait many years for enough sales tax to accumulate to pay for construction of the projects.
In additional to getting to use the system sooner, taxpayers benefit from greater cost certainty during the construction process. And, due to the currently highly competitive market for large construction contracts, Eagle P3 ended up costing Denver metro residents $300 million less than RTD had projected. On the other side, Tonilas noted, the private firms benefit from making a “stable, long-term investment” with a guaranteed income source.
The linchpin of it all was that FTA pilot program. Through the course of Denver’s Eagle P3, the FTA will study how this novel approach helps to streamline project implementation and to reduce risks and costs to taxpayers.
The 30/10 Initiative is obviously a little different. The big question is could something like 30/10 also help Denver fully realize FasTracks? The answer is almost certainly it could provide the Denver region another tool to get the job done — given that the original timeline for the entire FasTracks program has already been pushed back.
On a broader level, too, the 30/10 Initiative has the ability to help transform metro areas in the West that grew up in the era of the automobile. If you look around the country, some of the most ambitious efforts have come out West — Portland is probably the best example, but Salt Lake City, Denver and Los Angeles (to name a few) are following a similar path and that’s a good thing in a country that is more urban and often more willing to look for other ways to get around.
Categories: 30/10 Initiative, America Fast Forward
Denver, Salt Lake City, Dallas, Seattle are other cities that can be on board with what LA is doing for Fast Forward America because they are essentially self-help regions that are building their transportation networks for Bi-partisian support.
Which can then expand into other cities with existing networks like Chicago, NYC, DC.
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This is a great and important piece and should find its way to the national transportation advocates (and Metro’s own government affairs staff) in Washington for sharing with FTA and Congressional leaders. The piece makes an extremely effective case for 30/10 for not just LA. Kudos to Carter Rubin for writing it.
You clarified a complicated concept quite well. The project delivery approach you described is a Public-Private Partnership, and we here at Metro are embarking on a P3 program to deliver some of our Measure R projects using this approach as well. We see it as a nice compliment to 30/10, in that public funding can be used to leverage private financing, etc.
We are currently evaluating 3 highway and 3 transit projects, and expect to have recommendations to discuss with the Board sometime this summer.
We have a website… http://www.metro.net/ppp.
Did the FTA guarantee the contractors’ loan? If not, how did that affect the interest cost of the loan? And when you say that the contractors will operate the lines, are you saying they expect to operate them at a profit?
Regarding LA, do the current Red/Purple lines, or the Blue, operate at a profit? I know that metro systems world wide generally don’t, of course, but I’m wondering just those pieces of the whole system.
Thank you for the informative articles!