Cascade in the Capitol: Testimony Before the Joint Committee on Legislative Oversight on Columbia River Crossing

Testimony of John A. Charles, Jr.

President, Cascade Policy Institute

Before the Joint Committee on Legislative Oversight on Columbia River Crossing

 Regarding the Proposed Light Rail Extension to Vancouver

March 15, 2012

The CRC is fundamentally a light rail project. Therefore the first task for the Oversight Committee should be to rigorously assess the purpose and need for light rail. Specifically, what transportation service will light rail provide, and how does that service compare with express bus service currently offered by CTRAN?

It is important that the comparisons be made on a side-by-side basis, not system-wide.  The reason is that the cost-effectiveness of TriMet’s light rail system varies considerably by line. The Yellow line is the least productive MAX line in the entire system[1], averaging only 127 boarding rides/vehicle-hour. In contrast, the most productive line (Blue) averages 166 rides/vehicle-hour.

A summary of key metrics clearly shows that light rail compares poorly:

 

CRC Light Rail vs. CTRAN Express Bus

 

MAX Yellow Line

CTRAN I-5 Express buses

Peak-hour travel time*

36 minutes

16 minutes

Total capital cost, 2012-2020**

$856-$944 million

$4-$8 million

% of operations cost covered by fares***

47%

67%

 

 

*Derived from the FEIS and CTRAN published schedules.

**Various CRC finance documents; author’s estimates for CTRAN.

***Personal communication with finance staff of the respective agencies, 3/14/12.

Travel Speed: The only reason to add new transit service is to make bi-state travelers better off. Light rail would make them worse off, by lengthening commute times by 125%. The attached paper by transit consultant Thomas Rubin provides a more detailed analysis. This is a fatal flaw that cannot be overcome, because MAX is an all-local system, and it is competing with Express Bus service.

Cost: At roughly $300 million/mile, this would be the most expensive transit project in Oregon history. For comparison, the Milwaukie LR project is estimated to cost $211 million/mile while the Emerald Express BRT project in Eugene-Springfield cost $6 million/mile.

Light rail proponents have long argued that the high capital costs of rail are offset by savings in operations cost, but that is based on systemwide averages.  Actual numbers for CTRAN I-5 Express Buses and the Yellow MAX line suggest that there will be no operating cost savings for light rail.  CTRAN recovers 67% of bus operating costs from passenger fares, while the Yellow MAX line collects only 47%.

Conclusion: Vancouver light rail would serve no public purpose and would have extremely low ridership. The Legislative Oversight Committee should euthanize it as soon as possible.



[1] TriMet FY 2012 Transit Investment Plan, P. 103

Rubber-Tire Contempt: TriMet’s $1.5 Billion Plan to Deliver Inferior Transit Service

As a young environmental activist growing up in north Jersey in the 1960s, I took transit buses all over – into Newark, Elizabeth, and New York City. Later, as a college student in Pittsburgh, I took Greyhound across the state many times to get home.

For environmentalists, it was a badge of honor to abandon our 9 MPG autos and travel on a bus with 35-45 other passengers. The oil embargo was very real. We had odd/even license plate days for gas fill-up in 1973, so it seemed like a form of patriotism to be frugal.

Times have certainly changed. Cars have become more efficient, and chronic urban smog has permanently disappeared due to improved auto technology. That’s the good news. But the bad news is that many transit agencies are no longer content to merely provide a service to those unable or unwilling to drive in a private vehicle.

Portland is the poster child for this problem. In fact, TriMet doesn’t really care about transit service per se; the agency is obsessed with expensive trains that are supposed to recreate the way entire neighborhoods function, through “transit-oriented development.”

TriMet is so contemptuous of bus service that the agency is building massively expensive trains that simply replace cheap buses. And the replacement service is actually worse. The Milwaukie light rail line, now being built by TriMet (even though they have very little of the required funding in hand), is breathtaking in its sheer wastefulness. It will cost $205 million per mile for a train that will average 17 MPH. It will make the daily commute for current Milwaukie bus riders worse by forcing them to transfer to rail at Milwaukie. Rail will never offer express service; but there are already at least four bus routes on McLoughlin that offer a menu of local, limited-stop, and express bus routes.

Worse yet, the train will take 68 businesses and 20 residences. More than 60 mature shade trees on SW Lincoln Street near PSU are being cut down this week.

How can one government agency spend $1.5 billion for a mere 7.3 miles of train service, to provide a level of transit that is demonstrably inferior to bus service being replaced?

The answer is that TriMet is institutionally designed to fail. The agency has a monopoly on service and a monopoly on subsidies. Actual customers only account for about 25% of the agency’s operating revenue and none of the capital funds used for construction. So customers don’t really matter. TriMet does what its management wants, simply because it can.

I was down at Lincoln Street for an hour watching the trees getting cut. It was one of the saddest things I’ve ever seen a governmental agency do. The street is already served by the #17 bus. The train is simply unnecessary. Yet, for the 906-foot segment of Lincoln Street that is being wrecked, we will spend $35.2 million.

If you had $35 million to spend to improve three blocks of an urban street, how would you spend it? Not on light rail. Not if it was your own money. Not if you actually cared about the urban environment.

The Obama presidential bus only cost $1.1 million and rides on regular roads. Couldn’t we have just bought a few of those, run them up and down Lincoln Street, and saved the trees? I’m sure they would offer a much nicer ride than generic light rail cars.

The day the Portland City Council put private bus companies out of business in 1968 was a sad day in local history. Private companies could never get away with destroying a street like this or spending $1.5 billion on a pointless boondoggle.

TriMet is hopelessly corrupt. It’s time to admit that the agency is out of control and has utterly lost sight of its mission. Maybe in 2012 the legislature should consider abolishing this rogue agency, and starting fresh with a market-driven transit concept that focuses on actually serving customers with the best transit at the lowest public cost.

Portland’s Debt Isn’t Rosy

By Christopher Robinson

The Federal Government isn’t the only one with a spending problem. Local governments are finding themselves under a mountain of debt as well. The City of Portland currently owes more than $6.5 billion in long-term obligations. That comes out to about $11,000 for each of the city’s residents.

Portland is required by law to have a balanced budget, meaning income has to equal expenditures. However, an Oregon Revised Statute permits Portland to issue revenue bonds for “any public purpose.” $3.6 billion of the city’s obligations come from the sale of such bonds. The balanced budget requirement doesn’t mean much when funding can be created so easily, simply by going into debt.

Furthermore, only $60 million of Portland’s bonds receive the highest Aaa rating from Moody’s. If the city continues massive spending without strong assets to back its borrowing, the majority of its bonds risk being downgraded. This would lead to an overall reduction in Portland’s credit rating, which would spell financial catastrophe.

The simple truth is that to remain fiscally responsible, you cannot spend what you do not have. Portland inevitably must raise taxes to pay for its obligations or cut spending. Given the still-troubled state of the economy, tightening belts and cutting spending is the best option.


Christopher Robinson is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

EcoFlats: One More Unsustainable Green Icon for Portland

By Christopher Robinson

So-called “sustainable development” is a longtime political interest in the city of Portland. Although the term itself is never defined, the concept implies the use of “green” design and technologies in order to reduce energy consumption, water use, solid waste and automobile travel. The loftiest goal is “net zero,” whereby all electricity and water needs are met from on-site generation and no outside sources are necessary.

One such “sustainable” project is the EcoFlats apartment building located on North Williams Avenue in Portland’s Boise neighborhood. Recently, the development received a good deal of media coverage due to its implementation of green technologies and an “affordable” price tag. EcoFlats has no interior hallways, no air conditioning, a large roof top solar array and the goal of net-zero energy usage. On the surface it would seem an excellent model for future affordable, sustainable development; but an extensive back-story to EcoFlats’ financing and planning reveal otherwise.

First, EcoFlats’ location is no coincidence. Although promoted as a bicycle commuter friendly location (North Williams Avenue is considered a major “bicycle thoroughfare”), it is within the Portland Development Commission’s (PDC) “Interstate Corridor Urban Renewal Area.” This means businesses and developers can receive subsidies from PDC. EcoFlats sits on land previously occupied by a small equipment repair shop, which was considered underutilized space. In order to aid redevelopment, PDC provided the developer with a $740,000 commercial loan representing roughly 23% of the total project cost. Loans approved by PDC are intended to close financial gaps and may have reduced interest rates if applicants meet certain requirements, such as using sustainable technology.

In addition to the incentives from PDC, the developer also applied for Oregon’s business energy tax credit. The program covers up to 50% of costs towards the purchase of certain technologies. These include high-efficiency combined heat and power projects, such as the $200,000 solar array on top of the building.

The estimated costs are misleading. Tenants pay the energy costs for their residence, so the tax credit only benefits the developer. Proponents argue that energy costs will be lower because the building produces its own energy, cancelling out the cost of solar panels. However, the solar panels are subsidized by taxpayer money. All Oregonians, including the tenants, are footing the bill.

Furthermore, the developer of EcoFlats was not required to build any off-street parking for the building, a significant subsidy that allowed for more revenue-generating units. The developer received a parking exemption because North Williams Avenue is considered a “transit street” because it has a TriMet bus route. However, the majority of tenants likely will own an automobile, meaning the surrounding neighborhood will have to bear the burden of increased on-street parking.

Finally, EcoFlats is part of Energy Trust of Oregon’s “Net Zero” pilot program. The Energy Trust is a non-profit organization funded through a three percent, state-mandated surcharge on customers of the state’s largest energy suppliers, including PGE, PacificCorp and NW Natural. The Energy Trust works to promote reduced energy use by providing incentives from the money they collect. Projects enrolled in their “Net Zero” pilot are eligible to receive up to $575,000 in various incentives. The goal is to achieve net-zero energy consumption through careful planning and implementation of new technology. Again, however, the benefits are concentrated in developments such as EcoFlats, while the cost is spread across all who pay the three percent energy surcharge.

In total, EcoFlats has $1,415,000 in potential and realized subsidies, representing roughly 44% of the total project cost. Yet, even with these subsidies, the rents are very high for the local market. Portland Housing Bureau designates the Boise neighborhood as a low-moderate income community. Rent for 600- and 750-square-foot apartments at EcoFlats are $1,000 and $1,500 a month, respectively. This means it does not meet the requirements of low-moderate income families for affordable housing, which should represent less than 30% of gross annual income. Current Boise neighborhood residents are effectively priced out of the development.

There are clear winners and losers here. The 18 residential units and two commercial spaces are filled, which is good for the developer. The City of Portland wins, because they now collect almost double the property taxes on the land. The Energy Trust wins, because they can claim more energy savings, though whether or not the building ever achieves its net-zero energy goal will depend on the usage of the tenants. It will require a conscious effort in order to do so, and actual performance is likely to lag the estimated performance.

Oregon taxpayers and all who pay the Energy Trust surcharge are the big losers. They are required to make up the difference in costs for “sustainable development” but receive none of the touted benefits. EcoFlats is only one in a long list of heavily subsidized projects which have increased in number in recent years. Eventually, people will realize that “sustainability” in Portland is not about helping the environment, but rather about creating an image that only benefits a select few.


Christopher Robinson is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Testimony before the CRC Independent Review Committee

John A. Charles, Jr.
Cascade Commentary

Testimony before the CRC Independent Review Committee

By John Charles

Download Full Testimony Here

June 17, 2010

I wish to make two basic points tonight, related to: (1) tolling; and (2) TriMet’s financial viability

Tolling, Variable Rates, and the Portland Highway Network

For the past several years, the CRC management team has considered tolling primarily as a means of partially financing the new bridge. While there has been some modest consideration of variable toll rates, project managers have never defined the purpose of those rates (in terms of anticipated driver benefits), nor have they analyzed variable pricing within the context of the broader Portland highway network.

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Ending Highway Gridlock in Portland

randall_pozdena

by Randall Pozdena, Ph.D.

Click here to read the full report in PDF format

The Portland region is rated the 24th most congested metropolitan area in the country, but it does not have to be. Policymakers in Portland have focused on so-called “smart-growth” policies, limiting the geographic extent of development and developing light rail and streetcar infrastructure, while overlooking lower-cost, efficient and environmentally beneficial transit and roadway capacity solutions. In this report, Dr. Randall Pozdena presents the fundamental problems with the way Portland addresses roadway capacity issues, explains why systemic reform is needed, and proposes real recommendations for getting there.

A Sign of the Times

Jeff AlanQuickPoint!

Click the play button to hear the audio commentary

The MADE IN OREGON sign atop the White Stag building is a Portland Waterfront icon. Every Christmas, the lighting of the red “nose” is carried live by all the television stations and has become a local tradition. The sign read “White Stag Sportswear” until 1997, when it was changed to “Made in Oregon.” Now the latest owner, the University of Oregon, wants to change the sign, too.

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