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More FasTracks cost hikes likely

New budget figures being crunched for $6.1 billion project

By Kevin Flynn, Rocky Mountain News (Contact)

Published April 29, 2008 at 12:05 a.m.

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RTD's FasTracks team is working on new budget figures for the $6.1 billion program, with all indications pointing to more cost increases when the numbers are unveiled in the next two months.

FasTracks absorbed a 29 percent increase last year, from the $4.7 billion level when voters approved it in 2004.

Since the higher figure was announced a year ago, construction costs have continued to rise and the metro area's economy has continued to stagnate - pressuring RTD on both costs and the ability to pay for it.

"The economy has changed a lot since the time we did the last evaluation," Liz Rao, RTD's FasTracks program manager, told the Denver Regional Council of Governments' Transportation Advisory Committee on Monday. "Basically what we established last year is quite different from where we are today."

The committee approved RTD's current plan and passed it on to another DRCOG group for review, even though the plan faces more revision in the weeks ahead and DRCOG's staff and consultants reported RTD's current costs and revenues may be overly optimistic.

DRCOG, which has approval authority over RTD's program under state law, said further FasTracks cost increases "should not be surprising." It also asked RTD to include lower revenue forecast and higher projected costs in its next revision.

Rao said the new budgets for each transit corridor and other element of the FasTracks program are being worked out and would be ready by late June or early July.

The $6.1 billion total cost was based in part on construction costs as of the end of 2006 and inflated over the remaining 10 years of the program at an average 3.4 percent.

But the Colorado Construction Cost Index, one of the key indicators of inflation in the transportation construction industry, maintained by CDOT, went up 6.1 percent in 2007.

"We have had changed in the economy and we have to respond to those changes," Rao said.

DRCOG hired a consultant to go over RTD's estimates for construction costs. The consultant examined a number of commodities RTD needs to build the various projects and researched the costs independently of RTD's estimates.

It found that for 31 percent of the items, RTD had used lower figures than the range of costs the consultant found in the market, while 53 percent of RTD's estimates fell within the range and RTD had overestimated 16 percent of the items.

Another consultant examined the FasTracks finance plan and concluded the transit agency was too optimistic in its forecasts for sales tax revenues, assumed federal grants and cost savings obtainable through partial privatization of some projects, for which agreements with private companies have yet to be negotiated.

That led the DRCOG to conclude that RTD was being too optimistic and that its cost estimate may still be on the low side overall.

"RTD's capital cost estimates are at the low end of the reasonable range," said Steve Rudy, DRCOG's transportation planning director. Its assumed inflation rate doesn't account for the possibility of new spikes in costs and its projected operating costs may be too optimistic, he added.

DRCOG also sounded a warning on schedule, as required environmental studies on several corridors are up to three and a half years behind the original schedule. While RTD can compress the projects and work faster to make up the time, the opportunity to do that will soon disappear with any more delays, DRCOG warned.

flynnk@RockyMountainNews.com or 303-954-5247

Comments

  • April 29, 2008

    9:14 a.m.

    Suggest removal

    SteveFesch writes:

    Perhaps it's time Liz Rao and company take a pay cut instead of giving themselves raises.

    Read this my fellow tax payers of Colorado. http://www.rockymountainnews.com/news...

    When we approved the Fast Track budget it was 4.7 Billion dollars. There was no mention of using eminent domain and economic development "for creative funding". There was no mention of selling private bonds yet they just got that approved at the legislature while nobody was paying attention.

    I remember reading an article where Liz Rao didn't even believe that the Fast Tracks budget was off by a billion or so when they first reviewed the numbers. I'll find it an post it later.

    RTD you are blowing the Fast Tracks project and now you are trying to steal people's land away from them to cover your mistakes. It's not going to work.

    There are home owners on the west corridor who have been offered LESS for their homes than what they owe! Can you imagine losing your home to eminent domain and being left homeless and in debt? That is what RTD is doing.

    If you are going to squander billions and give yourselves pay raises at least compensate the land owners "in the path" so they can replace their properties with something similar to what they had before you assaulted their lives with your budget problems.

    RTD the tax payers of Colorado are watching your every move now. Every damn move. Our economy is failing, people are going hungry, and RTD continues to give themselves pay raises. In fact the RTD board of directors was just rewarded a pay raise by our state legislators this session.

    This is our tax dollars at work.

  • April 29, 2008

    9:47 a.m.

    Suggest removal

    openmind writes:

    How much more private property will they need to develop in order to compensate for their budget deficit? This project is going to get a lot messier and a lot more expensive. I am not convinced RTD is going to deliver the voters what they promised. They are proving time and time again that they can only succeed at mismanaging projects and tax payer funds.

  • April 29, 2008

    6:50 p.m.

    Suggest removal

    MNM writes:

    RTD must be pleased that they got a law passed in 2005 that requires them to only pay 50% of appraised value on partial takings. That'll cover some of the $2.5 million RTD approved in December for eminent domain attorneys and definitely useful in light of 175 west corridor property condemnation notices going out anyday.

    Property owners can call up their State Senator, Betty Boyd (D)Lakewood, and thank her for having voted to help RTD get that one passed.

  • April 29, 2008

    8:58 p.m.

    Suggest removal

    silverjeep2000 writes:

    RTD is trying to BUY their way out of financial trouble by taking peoples property without just compensation. They also like to block access to other properties so the people will just say "I GIVE" and RTD can then sell the property to investors. No talking to any of the legislature will help as RTD has also bought them.

    There will be more and more property owners who will side with us in the future once RTD takes the land they own who currently think RTD would never do that to them.

    Fair warning people. Take a look at what RTD is doing now. There are 6 more lines coming through. Will your property be next in line?

    RTD is getting wage increases, tax hikes, selling bonds now, and selling eminent domain property to investors to make up the deficit in their budget because they don't know what they are doing now or in the past. They don't know how to create a budget with increases in the future.

    Don't get us wrong, the light rail system is good to a certain extent. The problem with RTD is the way they treat the common people. How would any of the board members like their property being taken away without just compensation? They won't respond to that question as it doesn't concern them.

    RTD thinks they have won because they got our bill to protect us common peoper killed. What RTD doesn't realize is that we won't give up. We will continue fighting until they kill us and not just the bill.

    Make phone calls/send letters/e-mail your legislature to fight for all of us including yourself instead of RTD and the developers. You are the ones who voted the legislature in and you can vote them out just as fast. Remind them of that.

  • April 29, 2008

    9:23 p.m.

    Suggest removal

    jacka writes:

    House Bill 1354

    This bill, if signed by Gov. Ritter, will allow RTD to loan money or sell land to developers, but will also allow them to grant the land or money to the developer and take oversight away from the Public Utilities Commission. The developer assumes responsibility for any revenue bonds and must pay them back, but RTD still collects the .04 percent tax increase that was to pay for these bonds.

    Thats right taking and a bypass of TABOR will allow radical RTD to continue FasTricks - the fleecing of Metro citizens in the name of their own progress.

    1. RTD will be able to grant land a money to developers and avoid PUC oversight

    2. RTD will act as a financial backer to developers, without recourse should the developer default

    3. RTD could loan money to developers too, enriching private interests and bypassing TABOR to expand government.

    Stop the RTD lies!

  • May 1, 2008

    6:02 a.m.

    Suggest removal

    Acemon writes:

    The politicians want I-70 widening to be funded by those who use it. If so, then why not increase the fare for light rail to cover at least part of the increased costs? After all, if light rail is so convenient, so easy, and such a better option than sitting in traffic, isn't the ride worth another fifty cents?

  • May 9, 2008

    1:07 p.m.

    Suggest removal

    prk166 writes:

    Acemon, they have so few passengers compared to their costs the way it is that further raising fares would like make little difference.

    Did anyone else catch that they're already 3 1/2 years behind on environmental studies. IIRC they can't get Federal funding without those.

    At what point do the taxpayers get to put this project to an end?

  • May 10, 2008

    4:47 a.m.

    Suggest removal

    warrengfunk7 writes:

    What the heck is wrong with you people posting on here? Blaming RTD for all of this is nutty! China is obviously the cause of all this and they are not very nice people in control over there. China is a real threat to this nations and our allies and our way of life. China is building maga-project after mega-project, paying workers less money all week, than you need to buy today's lunch. The result, China can afford to build all of the infrastructure WE SHOULD BE BUILDING IN THIS COUNTRY. Instead, China is building so much, that they drive up the prices of steel, concrete and all commodities in general. Then we are stuck trying to build projects by paying the highest labor wages on Earth, using sub-standard Chinese materials (because China drove up the price so high, we can't afford anything other than China's sub-standard construction materials).

    China must be stopped and the US must continue to invest in major infrastructure, no matter the cost. What RTD needs is another tax increase so that RTD will not be forced to build a stripped down transportation system. Increase RTD's tax enough, so that RTD can actually build a better system than which is currently proposed.