FOR DISCUSSION ONLY
Projected level of Federal support for Link
John Deeter, 6/24/01
Central Link is the most ambitious new-start urban rail project in the United States for the next 15 years. The full Phase I project -- Northgate to Sea-Tac -- is about 24 miles long, is estimated to cost about $4.2 billion (YOE), and is projected to generate 154,000 daily riders in 2020. The current estimate of available local funds for the Link project is $2.1 billion (YOE) -- almost exactly half of the expected total project cost -- and the current projected federal contribution is no more than $1.15 billion (see Board Workshop May/June 2001, Appendix I). This leaves a shortfall of nearly $1 billion if no other revenue source appears. I believe that Sound Transit should reasonably expect a considerably larger federal contribution than is currently projected -- large enough, if fact, to make the full Phase I (Northgate to Sea-Tac) achievable without any new infusion of local money.
There seems to be a general belief among many people close to the Link project -- almost folklore, if you will -- that there's a "hard" cap to the dollar amount of federal support Link can expect. But the actual numbers from FTA reports belie this belief: in fact, other large projects recently and currently in the funding pipeline have received very generous federal support. I will first discuss recent levels of federal support for rail projects, with special emphasis on four particularly large projects (Los Angeles Red line, the Hudson-Bergen LRT line, the proposed Orange County LRT line, and BART to SFO). I then review local assumptions about federal funding, starting with the ballot measures prepared for the 1995 vote (which failed) and the 1996 vote (which passed). Finally, I present a "strawman" proposal for phasing the Link project designed to leverage a high level of federal support.
Recent and Upcoming Rail Projects
I have extracted some relevant information about recent and upcoming rail projects in the United States from the recently released "USDOT Report on New Starts: Proposed Allocations for FY2002" (see Table A-1 in Appendix A attached below). The fractional federal share for most urban rail projects has generally been in the range 60 to 70 percent of total cost, and very rarely under 50 percent.
But the most telling comparision is with three other large projects: Los Angeles Red Line which was recently completed and for which no additional construction is currently planned; Hudson-Bergen LRT which was recently opened and construction of the second segment is just now getting started; BART to SFO, which is nearing completion and scheduled to open next year; and Orange County LRT which is still in preliminary engineering but currently stalled due to local uncertainties about the need and effectiveness of the project. Data for these four systems are presented in Table 1, which mainly contains information extracted from Table A-1.
--------------------------------------------------------------------
TABLE 1.
Comparison of Seattle Link with other recent large rail projects
General Information
====================================================================
year
first year No, Cap. Fed. Fed. rides
FFGA comp- lgth of cost shr. shr. per
sgnd lete (mi) stn (B$) (B$) (%) day
--------------------------------------------------------------------
LA Red Line 1986 2000 17.4 16 $4.50 $2.35 52 120K*
MOS-1 1986 1993 4.4 5 $1.44 $0.70 49 ...
Hudson-Bergen LRT# 1996 2005 15.7 23 $2.11 $1.10 52 66K
MOS-1 1996 2000 9.6 16 $0.99 $0.60 61 31K
BART to SFO 1997 2002 8.2 4 $1.51 $0.75 50 74K
Orange Co. LRT ... ... 30.1 35 $3.74 $1.87 50 82K
Seattle Link 2001 ... 24 23 $4.20 $1.15 27 154K
MOS-1 (propsd)@ 2002 2008 9.5 13 $2.05 $0.50 24 70K
--------------------------------------------------------------------
* Current ridership (early 2001), others are projected 2020 ridership.
# MOS-1 and MOS-2; a third MOS is planned that will bring the system
length to 21 miles and ridership to 94K per day.
@ Capitol Hill to Henderson. Estimated ridership with Royal Brougham
and Beacon Hill stations included, 60K without them.
--------------------------------------------------------------------
Table 2 shows a breakdown of funding sources for these projects -- federal new start funds; other (flexible) federal funds; state funds from every source other than purely local revenues; and funds from local revenues. The federal percentage share of the project total funds is also shown.
--------------------------------------------------------------------
TABLE 2.
Comparison of Seattle Link with other recent large rail projects
Funding sources and federal share
====================================================================
Fed. Other Total
New Fed. Fed. State Local TOTAL Fed.
Starts Funds Funds Funds Funds Funds Shr.
(M$) (M$) (M$) (M$) (M$) (M$) (%)
--------------------------------------------------------------------
LA Red Line
MOS-1 $605 $91 $696 $0 $743 $1439 48
MOS-2 $667 $52 $719 $0 $1020 $1739 41
MOS-3 $681 $246 $927 $0 $384 $1311 71
Total $1953 $389 $2342 $0 $2147 $4489 52
Hudson-Bergen LRT
MOS-1 $604 $282 $886 $106 $0 $992 89
MOS-2 $500 $154 $654 $562 $0 $1215 54
Total $1104 $436 $1540 $668 $0 $2207 70
BART to SFO $750 $0 $750 $152 $608* $1510 50
Orange Co. LRT ... ... $1870 ... $1871 $3741 50
Seattle Link
MOS-1 original $500 $0 $500 $0 $1750 $2250 22
MOS-1 proposed@ $500 $0 $500 $0 $1550 $2050 24
Phase I# $1150 $0 $1150 $0 $2100 $4200 27
--------------------------------------------------------------------
NOTE: Reported in $YOE. Totals may not add due to rounding.
* Includes $113 M in SFO funds and $27 in CAPRA funds beyond the
federal project.
@ Capitol Hill to Henderson (9.5 miles).
# Northgate to Sea-Tac (24 miles). Federal new starts estimate is
the sum of $500 M from TEA-21 plus an estimated $650 M maximum from
the next two funding cycles (2004-2015). Without additional funds
the project shortfall would be $950 M.
--------------------------------------------------------------------
Some comments on the four systems (besides Link) shown in Tables 1 and 2:
The Los Angeles Red Line got $2.34 B federal support (mainly new start money) out of a $4.5 B project -- and was in line for more federal money until LA decided not to build any more subways. It is currently carrying about 120,000 daily riders, a year after opening the third and final segment. If the Red line were started today -- some 15 years later -- its total cost should be inflated by about 80 percent (i.e., multiplied by a factor of 1.8), and would therefore be about $8 billion. (This assumes a construction mid-year of 2008, compared to the actual mid-year 1993.)
Hudson-Bergen LRT (Jersey City and northward, on the west side of the Hudson river, opposite Manhatten) is the largest new project currently under construction. MOS-1 opened last year, and the FFGA for MOS-2 was recently signed. MOS-1 got a whopping 89 percent in federal funds -- 61 percent from new starts and 28 percent from flexible funds -- and the state put up the rest! MOS-2 isn't doing as well -- only 54 percent federal support. These two segments total $2.2 B -- and there's a third segment that hasn't reached the FTA yet, so the total project will be well over $3 B.
Orange County's light rail project has been run past the FTA -- the total cost is $3.74 B and they expect 50 percent federal support. Right now this project is on indefinite hold because of local questions about its effectiveness.
Finally, BART to SFO -- a very controversial project now priced at over $1.5 B -- is getting 50 percent federal support. The federal share was orginally about 60 percent, but cost overruns after the FFGA was signed have diluted it.
How does Link compared to the three new projects (LA Red line, Hudson-Bergen LRT, and Orange County LRT)? Link Phase I projected ridership in 2020 (154 thousand per day) is comparable to the Red Line ten years after completion, and much larger than the projected ridership for either of the other two systems. On the other hand, Link is much less expensive than the Red Line (after adjusting for inflation), and comparable in cost to the other two. Thus Link will be significantly more cost-effective than any other recently started, large urban rail system in the country.
What sort of federal support should we expected for the Link project? The signed FFGAs for the three segments of the Red line specified 59 percent federal support, but this was diluted to 52 percent due to significant cost increases during construction. Hudson-Bergen LRT is getting 70 percent and Orange County LRT expects 50 percent, and none of these "large" systems is as cost-effective as Link is expected to be. And other recent projects have received federal shares of 60 or even 70 percent, although the cost of any one of these projects has generally been well under $1 billion (see Table A-1 in Appendix A).
Thus, it is not fair to argue that because no other project is currently slated to receive over $500 million for a single MOS, the Link project is likewise subject to a similar limit. In fact, the premise isn't even true -- LA Red Line, Hudson-Bergen LRT, and Portland's Westside Line have all gotten over $500 M for a single FFGA. The examples of the LA Red line and Hudson-Bergen also demonstate that a large project with a projected large ridership is fully eligible for a federal contribution well in excess of 50 percent, with multiple MOS's and large annual grants continued over as long a period as 15 years.
A federal share of 50 percent of the $4.2 billion total estimated cost of the Link project provides $2.1 billion, and (fortuitously!) the available local match provides almost exactly the other $2.1 billion. The bottom line is that the full Phase I (Northgate to Sea-Tac) is financially feasible if the region gets all the federal funding it is entitled to.
On the other hand, Link's consultant projects that Link should expect no more that 4 percent of federal "new-start" money over the 2006-2015 time interval, or some $650 million. (See Appendix I in the "Central Link Board Workbook, May/June 2001".) Together with the $500 million already committed from TEA-21, this amounts to just $1.16 billion, and leaves the project nearly $1 billion short of what is needed for completing. But Link is the "premier" federal project for the next 15 years -- like the Red line was for the previous fifteen. Aggressive lobbying by the region should easily raise the Link share of the pot to something closer to 10 percent (instead of the 4 percent suggested by the consultant), which would allow Link to reach Northgate before 2015.
History of RTA/Sound Transit assumptions about Federal support
How did local assumptions regarding the target level of federal support for light rail in the Puget Sound region evolve, from the one developed in 1994 and rejected by the electorate in 1995 to the LPA (and MOS-1) adopted locally in 1999 and accepted by the FTA and Congress in 2000? [Note: The FFGA for this latter plan was signed in January 2001, but the new Secretary of Transportation, Mr. Mineta, has annulled this agreement. Sound Transit is currently preparing a revised MOS-1 and possibly a new LPA as well.]
The evolution of targeted federal support, as deduced from published plans, is summarized in Table 3. It should be noted that the level of federal support is generally targeted at around 30 percent, and in a couple of instances a good deal lower. Only two times has a target of 50 percent or greater been mentioned: (1) in 1999 a level of 50 percent was used in negotiations with the FTA around the time the current LPA was adopted and the total cost for Phase I was still a fairly low $2.9 B; and (2) in late 2000 a level of 69 percent was assumed for MOS-2 in order to build the segment from Lander St. to Sea-Tac without relying on any further North King Co. funds (they were exhausted in MOS-1 to get to 45th St.).
--------------------------------------------------------------------
TABLE 3.
Previous assumptions about Federal and State support
for the Central Puget Sound Light Rail Project
====================================================================
Fed. State Local TOTAL Fed. Fed/
Funds Funds Funds Funds Shr. yr@
yrs (M$) (M$) (M$) (M$) (%) (M$) Ref.
--------------------------------------------------------------------
RTA Plan, Oct. 1994* 16 $948 $803 $2264 $4015 24 100 (a)
Sound Move, May 1996* 10 $547 ... $1149 $1696 32 92 (b)
Sound Transit, 1999@ 10 $1450 ... $1450 $2900 50 145 (c)
Link MOS-1, 2000@ 10 $500 ... $1000 $1500 33 50 (d)
Link Phase I, 2001@
MOS-1 13 $500 ... $1750 $2250 22 ... (e)
MOS-2 13 $930 ... $420 $1350 69 ... (e)
Total 13 $1430 ... $2170 $3600 40 110 (e)
Link Phase I@ 12 $1150 ... $2200 $3600 32 96 (f)
--------------------------------------------------------------------
* 1995 dollars. @ YOE dollars.
(a) RTA Master Plan (10/29/94). Assumes 43.6 percent federal plus
state support for all rail ($2.0B/$4.6B, from Table 2, p. 64),
and 20 percent state support (pp. 39, 67).
(b) Sound Move (5/31/96). Assumes 30 percent federal contribution
for South King Co. subarea.
(c) New Starts FY2000, USDOT (1999). Phase I, Northgate (?) to
Sea-Tac.
(d) New Starts FY2002, USDOT (2001). Original FFGA for University
District to Lander St.
(e) Sound Transit (Jan. 2001). Amended FFGA.
(f) Board Workbook (May/June 2001). 45th St. to Sea-Tac. Note that
there is a $250 M shortfall.
-------------------------------------------------------------------
Although the percentage federal contribution has fluctuated widely, the annual dollar value has been fairly stable -- around $100 M (YOE dollars). In order to compare the first two entries (both given in 1995 dollars) with the remaining ones (YOE dollars), I multiplied the former by 1.68 to account for inflation to 2008 (approximate mid-year for the last two entries). The lowest value ($50 M per year) is clearly an anomaly, and is due to the small federal contribution from TEA-21. On the other hand, the highest value ($145 M per year) may actually be an achievable target, provided Sound Transit is able to present a more convincing case that it needs and deserves this level of federal support.
Does the principle of "subregional equity" affect in any way how much federal support will be requested and how it will be distributed among the five subregions?
The "Master Plan" adopted by the RTA Board on October 29, 1994, contained a very clear statement on this matter:
- "The RTA shall seek to maximize federal funding. No subregion shall be penalized in equity calculations for qualifying for such funding." [p. 41]
- "The RTA Financing Plan will provide a budget for each of the five RTA subareas, comprised of the subarea's projected share of local taxes, bonding capacity, and farebox proceeds, and an assumption for federal funding, and related expenditures." [p. B-3, my italics]
- "Government funding that is received for a specifically determined facility and/or service will be allocated to the subarea(s) which benefits from the facility and/or service." [p. B-3]
Strawman proposal for Link phasing
ST has to be much more aggressive in seeking federal funds. Central Link stands out as the number one project among those now coming into the federal funding pipeline -- high ridership serving dense urban areas. Other, lower rated projects have been getting 60-70 percent federal funding. Total cost for Northgate to Sea-Tac is $4.2 B, and $2.25 B in local funds is available ($1.75 B from North King, $500 M from South King). $1.4 B federal share (39 percent of $3.6 B) gets us to 45th St., and $2.0 B (48 percent of $4.2 B) gets us to Northgate. People should stop being timid about asking for our fair share of the federal pot.
It is essential that a plan be developed for continuing the Link project to completion beyond MOS-1 -- there may very well be 2 or 3 further MOS's down the road.
The proposal outlined here is deliberately aggressive in the sense that it seeks to maximize the federal contribution to the project. Thus MOS-1 is reduced to the absolute minimum (Capitol Hill to Lander) that will retain the $500 M federal contribution from TEA-21. At the beginning of the next funding cycle (FY2004) Sound Transit then presents the federal authorities (FTA and Congress) with a very large ridership MOS-2 -- going both south (Lander to Henderson) and north (Capitol Hill to 45th) -- and requests at least a 50 percent federal contribution for these two segments. (See Table 4.)
---------------------------------------------------------------------
TABLE 4.
Strawman phasing plan for Link Phase I
=====================================================================
Fed.
Opens Cost Local Fed. Pct.
---------------------------------------------------------------------
MOS-1 Capitol Hill to Lander 2008 $1350 M $850 M $500 M 37
MOS-2A Lander to Henderson 2008 $700 $300 $400 57
MOS-2B 45th to Cap. Hill 2012 $900 $400 $500 56
MOS-3A Henderson to Sea-Tac 2012 $700 $500 $200 29
MOS-3B Northgate to 45th 2014 $600 $250 $350 58
---------------------------------------------------------------------
Totals $4250 M $2300 M $1950 M 46
---------------------------------------------------------------------
Note that the segment Capitol Hill to Henderson specified in Scenario 4 as the "MOS" is here broken into two parts, MOS-1 (Capitol Hill to Lander) and MOS-2A (Lander to Henderson). This allows local funds for the Rainier Valley segment to be used to leverage a federal match, assumed here (and in much of the table) at a reasonable 57 percent. (Note that the entire segment from Capitol Hill to Henderson is projected to open in 2008 as the "initial operating system". This initial system (MOS-1 plus MOS-2A) recieves overall a modest 44 percent federal share while being very competative in terms of cost per rider, etc., compared to other systems currently in the pipeline.) The strategy is to hold off MOS-2A until the beginning of the next federal funding cycle (FY2004), and pool it with MOS-2B (Capitol Hill to 45th) after the SEIS for the Montlake alignment is completed. The combined MOS-2 is actually not much larger than MOS-1 -- $1.6 B compared to $1.35 B -- but it generates a whopping additional ridership of 70K/day. The low cost per rider fully justifies something close to the federal maximum of 80 percent, but I've written down a modest 56 percent, or $900 M. And it wouldn't be unreasonable to start negotiations at $1 B (62 percent).
Once the initial operating system is opened in 2008, Sound Transit will be in a good position to ask for federal support for MOS-3, which will push Link to Northgate in the north and Sea-Tac in the south before 2015. In this way it may be possible to build the complete Phase 1 (Northgate to Sea-Tac) without any additional local money beyond the $2.1 B already in hand -- assuming modest cost-saving measures (such as the Montlake alignment instead of Portage Bay) and modest contributions from other sources (such as a sales-tax rebate from the State).
References
\
APPENDIX A.
USDOT Annual Report on New Starts Proposed Allocations FY 2002
Extracted from FTA's "Annual Report on New Starts: Proposed Allocation of Funds for Fiscal Year 2002". See <http://www.fta.dot.gov/library/policy/ns/ns2001/ns2002.html>
----------------------------------------------------------------------
Table A-1.
USDOT Annual Report on New Starts Proposed Allocations FY 2002
General Information
======================================================================
year year No. Cap. Fed. Fed. rides
Sta- FFGA to lngth of cost shr. shr. per
tus sgnd open (mi) stn (M$) (M$) (%) day
----------------------------------------------------------------------
Atlanta/N Springs Open 1994 2000 1.9 2 $463 $371 80 33K
Boston Transitway UC 1994 2003 1.0 3 $601 $331 55 22K
Chicago/Douglas UC* 2001 2005 6.6 11 $451 $320 71 27K
Dallas/No-Central UC 1999 2003? 12.5 9 $517 $333 64 17K
Denver/SE LRT UC 2000 2008 19 14 $882 $525 60 38K
Denver/Southwest Open 1996 2000 8.7 $176 $120 70 22K
Tri-Rail Commuter UC 2000 2005 $327 $110 34 42K
Houston Bus Plan UC 1994 2004 $625 $500 80
Los Angeles
Red MOS-3 Orig 1993 n/a 12.3 9 $3044 $1416 47
Red MOS-3A Open 1993 2000 6.3 3 $1311 $681 52 120K
LRT MOS-3B Stdy 6 15K
Maryland/MARC Open 1995 2001 $132 $105 80
Memphis/Medical UC 2000 2004 2.5 6 $75 $60 80 4200
Minn-StP/Hiawatha UC 2001 2004 11.5 15 $549 $274 50 25K
Hudson-Bergen (1) Open 1996 2000 9.6 16 $992 $604 61 31K
Hudson-Bergen (2) UC 2000 2005 6.1 7 $1215 $500 41 35K
Newark Rail (1) UC* 2000 1 5 $208 $142 68 13K
Pittsburgh Recnstr UC 2001 2004 $384 $100 26 24K
Portland/Westside Open 1992 1998 17.7 20 $964 $630 65
Portland/Interst UC 1990 5.6 10 $350 $257 73 18K
Sacramento/South UC 1997 2003 6.3 $222 $111 50 25K
Salt Lake No-So Open 1995 1999 15 $312 $237 76 26K
Salt Lake Univ. UC 2000 2002 2.5 4 $106 $85 80 7600
SF BART to SFO UC 1997 2002 8.2 4 $1510 $750 50 74K
St Louis/St Clair UC 1996 2001 17.4 8 $339 $244 72
San Diego/Mssn E UC* 2000 2005 5.9 4 $431 $330 77 11K
San Jose/Tasman W Open 1996 1999 7.6 $325 $183 56 7500
San Juan/Tren Urb UC 1996 10.7 16 $1653 $708 43 113K
Washington/Largo UC 2000 2004 3.1 2 $434 $260 60 28K
----------------------------------------------------------------------
Baltimore/Dbl-Trk Pend $154 $120 78 44K
Chicago/SW Comm. Pend* $165 $128 78 14K
Seattle Link (1) Revw* 2001 7.2 10 $1500 $500 33 87K
---------------------------------------------------------------------
Chicago/NCC Comm. Dsgn $236 $145 61 8400
Dallas/Trinity II Dsgn 25 5 $184 $46 25 11K
Little Rock/River Dsgn 2.1 9 $13.2 $8.6 65 1000
LOSSAN Improv. Dsgn $36 $24 67
Miami/Busway Dsgn 11.5 12 $89 $23 26 8800
New Orleans/Canal Dsgn 5.5 37 $157 $125 80 31K
No. San Diego Dsgn* 23.7 15 $332 $152 46 15K
San Franciso/3rd Dsgn 5.4 19 $531 $0 0 71K
Seattle Link (2,3) Dsgn@ 16.3 13 $1350 $931 69 70K
----------------------------------------------------------------------
Austin LRT PE# 14.6 16 $739 $369 50 37K
Charlotte/So LRT PE 11 19 $331 $167 50 15K
Cincinnati/IS LRT PE# 19 24 $875 $431 49 24K
Cleveland/BRT PE 9.8 $229 $135 59 29K
Hartford/BRT PE 9.6 12 $82 $52 63 8800
Houston/Astro LRT PE 7.5 17 $300 $0 0 33K
Las Vegas/ext. PE 4.7 11 $597 $210 35 63K
Los Angeles
Eastside LRT PE 5.9 8 $750 $402 54 15K
Valley E-W BRT PE 14.2 13 $300 $0 0 24K
Miami/N 27th BRT PE# 9.5 10 $88 $61 69 10K
New Orleans/Desire PE 2.9 22 $93 $65 70 15K
New York/LIRR Acc. PE 4 2 $4344 $2172 50 351K
Orange Co./Center PE 30.1 35 $3741 $1871 50 82K
Phoenix/E Valley PE@ 20.3 28 $1076 $533 50 24K
Raleigh/Regional PE 34.7 16 $755 $377 50 18K
San Diego/Mid ext PE* 3.4 3 $117 $42 36 12K
San Juan/Minillas PE 1 2 $477 $383 80 14K
----------------------------------------------------------------------
* "Highly recommended",
# "Not recommended"
@ Not rated
others "recommended"
----------------------------------------------------------------------
John Deeter 6/24/01
Send e-mail to:
John Deeter bj556@scn.org
This is a link to John Deeter's home page.
