BART at Millbrae. How much money did we waste? Photo by the author.
The Metropolitan Transportation Commission (MTC) has admitted that its transit operations for the Bay Area are unsustainable. Even worse the head of the Federal Transit Agency (FTA) agrees. But the good news here is that the FTA is leery of providing funds for goofy expansion projects such as Muni’s central political subway to Chinatown, BART to Livermore, BART to San Jose and BART’s insane standard gauge diesel extension to Antioch.
But BART, MUNI and the MTC continue to waste money on these expansion plans. That’s because, while operating dollars are scarce, capital (or investment) dollars are provided by the government. Just because these dollars are federally funded doesn’t mean we should waste them. And the FTA is slowly coming to that conclusion.
The head of the FTA, Peter Rogoff, made it clear that partnering with bankrupt agencies to extend their empire made no sense when the agencies could not afford to operate what they had. This is a huge change in orientation. Critics claim the FTA cannot help with operating expenses (and they can’t) so they are being disingenuous about the problem.
To this observer, that is shallow criticism. Rogoff is merely pointing out that the Emperor wears no clothes. This is a long-overdue breath of fresh air and a bold stance in the face of prior poor transit policy. But turning this system around, when the established policies are based upon transit expansion is likely to prove difficult.
One approach, that has never been employed, would be to have the FTA audit the success of the transit projects they have funded. They could look at the build estimate and compare that to the final cost (including bond payments, interest on loans and the rest) and look at the projected riders and compare that to the actual riders. One way to get FTA funding is claim ridership so high, thanks to consultants, that the project looks acceptable.
BART to SFO is the poster child for an FTA audit. It ran almost a half a billion over budget, when you get into the details, and ridership is still well under what was projected. It’s a nice service, but it carries an uncontemplated surcharge and it dead ends in Millbrae, where 38,000 riders would have used it according to the specs and we see about 8,000 today.
That has to be a failure in anyone’s book but no one bothers to look at what we spent and what we got. Since the FTA provided the bulk of the money, they should step to the plate and audit the results.
This observer would go so far as to suggest there should be a penalty if you imagine riders, obscure costs and get your project built. Right now there is none. Perhaps if we made the agency issue bonds for construction, paid by the FTA when the project came in within 3% of its targeted budget, we would get realistic estimates. Failure to meet the goal would mean the FTA would not fund the construction part of the project.
That would be about 40% of the project. The 60% funding would be based upon ridership. If the projected ridership fails to materialize, then the FTA is not required to fund it and the agency eats the difference.
In this fashion, no transit agency would put forth a project unless it was certain to meet the criteria required. It’s all about risk and reward. Under the present system it’s all reward with no risk. See Madness at Millbrae for a detailed analysis of BART to the airport.