Searched : light rail

Light Rail to Bridgeport Village: The Dumbest Train Project Yet

By John A. Charles, Jr.

TriMet and Metro are promoting the idea of a new light rail line from Portland State University to the Bridgeport Village shopping mall in Tualatin.

The question is, who would ride it?

We already know from experience that mall shoppers prefer private cars to trains. The Red Line to the airport was opened in 2001 specifically to service the Cascade Station shopping center, which is anchored by IKEA, Target, and Best Buy. Field observations conducted by Cascade Policy Institute in 2010 and again in 2016 showed that more than 98% of all passenger-trips to and from Cascade Station are made in private automobiles. Light rail is simply irrelevant.

The same is true for Gresham Station, another shopping center specifically built around a light rail stop. Regardless of the time-of-day or day-of-week, virtually all trips to and from Gresham Station are made in private vehicles.

The Green MAX line, which terminates at Clackamas Town Center, has also had no effect on travel patterns at the mall.

In order for the Bridgeport Village line to be built, Tigard residents will need to approve the city’s participation in the project by voting for Measure 34-255 in the November election. Local voters should learn from experience and turn down this measure. Light rail through Tigard would be a total waste of money.

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Does PCC-Sylvania Need a Light Rail Tunnel?

By Emma Newman

Metro and TriMet are jointly considering an expansion of the light rail system to PCC-Sylvania in SW Portland, by building a tunnel to the campus from Barbur Boulevard. The tunneling would have a significant impact on the surrounding neighborhood, forcing many homeowners to move away while still requiring PCC students to make a long walk to their classes.

Currently, 84 percent of PCC students drive to school, even with the campus being served by both shuttles and busses. If this tunnel plan is chosen, Oregon taxpayers will be saddled with paying half of the two billion dollar cost.

When asked at what point the costs of building new transit outweigh the benefits, a Metro spokesperson responded that “transportation planning is more an art than a science.”

An alternative plan under consideration is a rapid bus line which would also service PCC-Sylvania. While this would be about half the cost and much less inconvenient than digging a rail tunnel, it still would be a response to a need that doesn’t exist.

Despite the low ridership of current transit options, transportation officials continue to follow the mantra of “if you build it they will come,” rather than follow the laws of supply and demand.

Emma Newman is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She is a student at George Fox University, where she is studying Economics and Computer Science.

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John Charles Debates Tigard’s Light Rail Ballot Measure

During January’s Tigard Initiative Public Forum, John Charles debated a Tigard City Counselor on the merits of the Tigard ballot measure that would place restraints on the Tigard City Council regarding the Southwest Corridor Plan.

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Why Do Transit Officials Lie About Light Rail?

The transit agency for Vancouver (C-TRAN) is reconsidering its support for the Columbia River Crossing Project, which includes light rail to Vancouver. In a staff report prepared for this week’s C-TRAN board meeting, the following claims are made:

  • Light rail offers faster service (17 MPH) than bus rapid transit (14.5 MPH);
  • The extended Yellow MAX line will arrive in Vancouver every 7.5 minutes; and
  • Light rail will carry 6,100 people over the Columbia River during the peak period.

All of these answers are wrong.

C-TRAN express buses running from various points in Vancouver to Portland city center currently average 31-45 MPH (depending on the route) in the morning peak period. In the afternoon peak they average 20-30 MPH traveling northbound.

Current Yellow MAX line service is one train every 15 minutes, all day. There will be no peak-hour service to Vancouver at 7.5-minute intervals, because TriMet has reduced service by 14% in the past five years. The agency is broke.

Finally, the maximum one-way capacity of a two-car light rail train is approximately 274. Multiplying this times eight trains per hour in the peak direction is 2,192 riders, not 6,100.

The fact is, C-TRAN’s express bus service is far superior to the slow MAX, so why spend $930 million on a slow train to Vancouver? That’s the question that should be asked.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Cascade in the Capitol: Light Rail to Vancouver vs. CTRAN Express Buses – Testimony on HB 2800

Cascade President John Charles testified today before the Joint Committee on Interstate-5 Bridge Replacement Project regarding HB 2800. His testimony follows.

The CRC Plan for Light Rail:

A Step Backwards for Transit Customers

 John A. Charles, Jr.

Cascade Policy Institute

February 2013

Metric

TriMet Yellow MAX Line to North Portland

CTRAN Express Buses Serving Downtown Portland

Capital cost of expanding  light rail to Vancouver

$932 million

$0

2011 annual operating cost

$10.2 million

$5.04 million

Operating cost/hour

$270

$110

Annual hours of service

40,492

45,996

Farebox recovery ratio for operations cost

47%

67%

Cost/new vehicle

$4,200,000

$458,333

Peak-hour frequency

Every 15 minutes

Every 10.3-15.5 minutes

Peak-hour travel speed

15 MPH

31-45 MPH

Travel time, Vancouver to Portland

36-38 minutes

16 -18 minutes

% of passenger seating capacity actually used at the peak period

34%

38%

Promises of Frequent Transit Services: Hope Over Experience

According to the most recent finance plan for this project, “Light rail in the new guideway and in the existing Yellow line alignment would be planned to operate with 7.5 minute headways during the “peak of the peak” and with 15-minute headways at all other times. This compares to 12-minute headways in “peak of the peak” and 15-minute headways at all other times for the existing Yellow line.”[1]

In fact, the Yellow Line runs at 15 minute headways all day, with even less service at night.  Yet according to the FTA Full Funding Grant Agreement for the Yellow Line, service is supposed to be operating at 10-minute headways at the peak, improving to 7.5 minute headways by 2020. TriMet is violating its FFGA contract, which could lead to a denial of funding for the $850 million grant request that the CRC project plans to make.

The Green MAX line is also operating at service levels of at least 33% below those promised in the FFGA. 

The legislature should not be expanding TriMet’s territory at this time – especially into another state that already has a transit district – because TriMet cannot afford to operate the system it already has. Despite a steady influx of general fund dollars, TriMet has been cutting service ever since the legislature approved a payroll tax rate increase in 2003, as shown below.

TriMet Financial Resources, 2004-2013 (000s)

 

FY 04/05

FY 08/09

FY 10/11

FY 11/12 (est)

FY 12/13 (budget)

% Change 04/05-12/13

Passenger fares

$   59,487

$   90,016

$   96,889

$   104,032

$117,166

+97%

Payroll tax revenue

$171,227

$209,089

$224,858

$232,832

244,457

+43%

Total operating resources

$308,766

397,240

$399,641

$476,364

$465,056

+51%

Total Resources

$493,722

$888,346

$920,044

$971,613

$1,111,384

+125%

Note: Pursuant to legislation adopted in 2003, the TriMet payroll tax rate was increased on January 1, 2005, will rise by .0001% annually until it reaches a rate of .007218% on January 1, 2014.

 

  Annual Fixed Route Service Trends, 2004-2012

FY 04

FY 06

FY 08

FY 10

FY 12

% Change

Veh. revenue hours

1,698,492

1,653,180

1,712,724

1,682,180

1,561,242

-8.1%

Vehicle revenue miles

27,548,927

26,830,124

26,448,873

25,781,480

23,625,960

-14.2

Average veh. speed – bus

15.8

15.8

14.9

14.7

14.6

-7.6%

Average veh. speed – L. Rail

20.1

19.4

19.3

19.4

18.4

-11.5%

Source: TriMet annual service and ridership report; TriMet budget documents and audited financial statements, various years.

 


[1] C-TRAN, High Capacity Transit System and Finance Plan, July 20, 2012, p. 4.

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John Charles talks with Victoria Taft about the Portland-Milwaukie Light Rail Project

Victoria Taft, radio host on KPAM 860, interviewed John Charles about his latest commentary, Transit Hypocrisy, which discusses TriMet’s Portland-Milwaukie Light Rail Project.

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John Charles talks with Victoria Taft on light rail use and TriMet

Talk show host, Victoria Taft, talked with John Charles Monday about light rail use for the Expo Center’s Cirque de Soleil event, the Sustainability Center, and the future of TriMet.

 

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Free citizen education forum on Urban transportation and the CRC Light Rail Project

Citizens are warmly invited to hear five national experts share research on the myths and truths behind federally funded transportation infrastructure. This is a joint regional/national event, bringing in speakers around the country from the national think tank, the American Dream Coalition.

Come to this free, half-day conference on transportation solutions, their trade-offs, how to effectively address congestion, costs and funding, efficient use of public funds, bus service systems that actually work and how enforcement has been used to alleviate crime issues often associated with transit.

Come and hear about what other communities are doing to solve urban transportation problems and how these solutions can be applied in our region.


SPEAKER TOPIC
Tiffany Couch, Washington. Forensic Accountant & Financial Investigation, Acuity Group, PLLC Forensic Accounting Update – How has $152M in Federal and State Tax Dollars been spent so far?
Wendell Cox, Illinois. Public Policy Consultant, Principal of Demographia Improving economic growth and the quality of life in the Portland-Vancouver area
Tom Rubin, California. CPA, CMA, CMC, CIA, CGFM, CFM. Consultant for major transit capital projects How Cost-Effective Are Buses and Light Rail?
John Charles, Oregon. President and CEO Cascade Policy Institute Will Transit-Oriented Development Work in Vancouver?
Karen Jaroch, Florida. Licensed Professional Engineer. Co-founder of the Tampa 912 Project How to Organize Ideas into Action
Randal O’Toole, Oregon. Cato Institute Senior Fellow, Founder of American Dream Coalition What Are the Prospects for Federal Funding of the CRC?

 

Please visit http://btgaps2-stevescare.eventbrite.com to register!

Online registration is encouraged, but not mandatory.

 

 

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How many presidential buses does it take to equal the cost of one light rail car?

President Obama is traveling the Midwest on a new bus purchased by the Secret Service. The vehicle is painted all-black with tinted windows and appears to be the size of a standard Greyhound bus. Inside, we can assume that it’s tricked out with the latest in high-tech security gear and telecommunications and designed with a kitchen, shower, bedroom and lounge area.

Given its purpose, the price tag must be enormous.

Actually, it’s not. It was purchased for $1.1 million. A typical light rail car in Portland costs $4 million.

Regular transit riders might want to ponder that. A light rail car has hard seats, no headrests, minimal legroom and no on-board internet access.

The Presidential bus can go on any road in America, while light rail is limited to just a small part of the Portland region.

The proposed Milwaukie light rail project will cost $1.5 billion. If we cancelled the project, we could buy an entire fleet of presidential buses and run them to Milwaukie, with free coffee and donuts for everyone, and we still couldn’t spend as much as TriMet plans to spend on one mile of light rail.

Maybe transit customers would like to try the Presidential bus for a few months before we waste $1.5 billion on a slow train to nowhere.

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Cascade Requests Congressional House Committee to Delete Funding for Milwaukie Light Rail

Portland, OR – Today Cascade Policy Institute sent a letter to Rep. John Mica, Chairman of the Congressional House Committee on Transportation and Infrastructure, requesting that he delete all $750 million in federal funding being requested by TriMet for the Milwaukie light rail project.

Noting that the recently-signed Budget Control Act of 2011 requires Congress to reduce federal spending by $917 billion over the next 10 years and that Rep. Mica has released a draft six-year transportation spending bill forecasting a 35% cut in federal highway/transit spending, Cascade President John A. Charles, Jr. stated that the price tag of $205 million per mile for Milwaukie light rail was “indefensible” and should be terminated.

Cascade sent a second letter to Gov. John Kitzhaber, informing him of the letter to Rep. Mica and asking that he intervene to terminate the Milwaukie project, but implement a low-cost alternative concept with the following elements:

  • Finish the new bridge over the Willamette River
  • Cancel the light rail portion
  • Connect the streetcar loop
  • Offer more “express” bus service to Milwaukie

Charles stated, “The Milwaukie project offers no new transit service, forces the relocation of 68 businesses and 20 residences, and degrades current bus service to Milwaukie. We can improve service while saving about $1.3 billion, and that plan would free up about $600 million in local dollars for other civic improvement projects.”

For the letter to Rep. Mica click here.
For the letter to Gov. Kitzhaber click here.
For a summary of the low-cost alternative plan for Milwaukie light rail click here.

 

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Press Release: Light Rail and Streetcar Fail to Provide “High-Capacity” Service, Study Shows

study released today by Cascade Policy Institute shows that TriMet’s so-called “High-Capacity Transit” system – comprised of light rail, the Portland Streetcar and commuter rail – is incapable of actually moving large numbers of people when needed. Moreover, most of the time there is no demand for high-capacity transit because the region’s population is too dispersed, and people prefer to travel by modes other than passenger rail.

The study, Light Rail, Streetcars & the Myth of “High Capacity Transit,  measured actual trip choices made during 2010 at five big events when presumably “high-capacity” transit would be in demand: the Portland Green Building home show held in March at the Multnomah County Expo Center; the opening night show of the Cirque du Soleil in April; the final playoff game of the year for the Portland Trail Blazers in May; “Black Friday” at the Cascade Station shopping center in November; and December 21st at the Gresham Civic Station shopping center in December. The results were:

  • Light rail use at the Green Home Show averaged 20% of all passenger-trips;
  • Streetcar use at the Cirque du Soleil opening show was 8%;
  • Light rail use at the Blazer game was 21%;
  • Rail use at Cascade Station averaged 2% over a two-day period in November; and
  • Light rail at Gresham Civic Station carried 2% of all passenger-trips for the morning commute period and 2% of all passenger-trips for the mid-day shopping period.

In total, 47,666 passenger-trips were observed or estimated, and rail only garnered 11% of the market share, as summarized below.

Summary Totals
All passenger-trips to all events, by mode choice

 

Green
home
show
Circus Blazers Cascade
Station
Gresham
Station
Totals Market
share
(%)
Rail 516 110 4,238 333 120 5,317 11%
Auto 2,106 1,245 14,636 (est) 17,570 5,101 40,658 85%
Other 0 0 1,626(est) 5 55 1,686 4%
Total 2,622 1,355 20,500 17,908 5,276 47,666 100%

Note: For the Blazer game, only light-rail trips were observed; other mode totals were estimated.

In all cases except for the Blazer game, actual seating capacity of the trains was never an issue because so few customers chose to ride, even when on-site parking was quite expensive. In the one case where high-capacity transit would have been very helpful – the Blazer playoff game – the light rail system was overwhelmed by crowds and could only muster 21% of market share despite the use of four different MAX lines – the Yellow, Green, Blue and Red lines.

The reason for the modest transit totals is that light rail is inherently a low-capacity system, because there are only two rail cars per train. The system cannot use more than two cars because trains travel on surface streets in downtown Portland. If trains had 8-9 cars, as is common with the New York City subway or other heavy rail systems, the trains would be blocking downtown intersections for minutes at a time.

Also, trains generally cannot run at greater frequencies than every three minutes due to operational and safety requirements. In most cases, trains only run every 12-15 minutes, or less often. These constraints limit passenger-throughput compared to a bus transit system where vehicles can travel with minimal spacing requirements.

Cascade President John A. Charles, Jr. conducted the research with the help of several assistants. He stated, “The field research shows that continued use of the phrase ‘high-capacity transit’ by local planners to describe the regional rail program is Orwellian. Light rail is actually a low-capacity system, and the streetcar is simply irrelevant. TriMet’s buses carries two-thirds of all regional transit trips on a daily basis, and that’s the service that should be recognized as high-capacity transit. Unfortunately, bus service is being sacrificed by TriMet in order to build costly new rail lines that carry relatively few people.”

 

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John Charles talks light rail on Fox Business’s Tom Sullivan Show

Watch John Charles discuss the cost of light rail and the bankrupting state of Portland public transit.

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John tells TriMet Board, “Milwaukie Light Rail: You Will Own the Problem”

John A. Charles, Jr.Cascade Commentary

TriMet Board Meeting is currently considering Resolution 10-11-57 which would be a thumbs up to move forward with the Milwaukie Light Rail project as planned. John Charles provided the below testimony in response to this resolution. This resolution is scheduled for Wednesday.

****

Members of the Board:

Resolution 10-11-57 must be considered within the context of TriMet’s current financial crisis.

There are two major cost drivers for TriMet: employee compensation and capital projects. Most of you can say that the payroll costs you now face were negotiated years ago and you have simply inherited the problem. However, if you approve this resolution and commit yourselves to new light rail service at a construction cost of $210 million per mile, you will own the problem.  And I see no way of solving your financial crisis if you have unsustainable costs in both operations and capital expansion.

(more…)

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Excessive Cost of the Milwaukie Light Rail Line

John A. Charles, Jr.
Cascade Commentary

By John Charles

Testimony before the Metro Council Regarding the Milwaukie Light Rail Line Resolution No. 10-4133

Metro proposes to allocate $144.8 million of flexible funding to one corridor in SE Portland  to move a handful of people who could be served just as well by Bus Rapid Transit at less than .2% of the capital cost, and the staff concludes that there is no opposition “known at this time.” Only in the Orwellian world of regional transportation decision-making could two public votes AGAINST the South/North LRT project be re-defined out of existence 12 years later.

The analytical argument against this project is actually much stronger now than it was in 1998 when it was voted down. We know more about alternatives, and about the true costs of rail. Continued rail expansion inevitably cannibalizes service elsewhere, as shown by the fact that TriMet has had a 38% increase in funding over the past five years while service has dropped by 10%.

(more…)

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The politics of light rail pork

Steve BucksteinAlthough the phrase “light rail” wasn’t even mentioned in the hearing, it seemed to be the elephant in the room today when the Subcommittee on Transportation and Economic Development of the Joint Ways and Means Committee met to move forward a $100 lottery bond measure to fund transportation projects throughout Oregon.

As introduced in the House, HB 2278 would have required that at least 15 percent of the funding be allocated to each of five regions described in the bill. But when the bill reached this committee, the 15 percent number had somehow been reduced to (more…)

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The Market has Spoken: Light Rail Can’t Compete

John A. Charles, Jr.QuickPoint!

The most recent downtown employer survey by the Portland Business Alliance contains important news for taxpayers. It shows that light rail’s market share for downtown commuters dropped by 30% over the past five years. Considering that TriMet actually opened two new rail lines during that period, this is a stunning decline in ridership.

In 2001, 20% of downtown employees traveled to work by light rail. By 2005 that had dropped to (more…)

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Failing Grade for PSU and Light Rail

John A. Charles, Jr.QuickPoint!

On Thursday, July 8, a Metro committee will finalize the funding plan for TriMet’s $494 million “South Corridor” light rail expansion project. It will run to Clackamas County and through the Portland bus mall. The committee is counting on Portland State University to contribute approximately $5 million.

Unfortunately, putting light rail on the (more…)

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The Mythical World of Transit-Oriented Development: Light Rail and the Orenco Neighborhood, Hillsboro, Oregon

John A. Charles, Jr.

Executive Summary

During the past decade, Portland-area planners have embraced Transit-Oriented Development (TOD) as the dominant land use/transportation strategy. They assert that TOD, especially based on light rail, will reduce traffic congestion, increase transit use, improve air quality, and attract private investment.

Dozens of TODs have been constructed in the Portland region since 1990, with several winning national acclaim. Most have received public subsidies, on the assumption that the public benefits of TOD outweigh the costs. However, little is known about how transit-oriented projects actually perform once they are built, in terms of transit use and auto dependency. The purpose of this analysis—the first in a series of Portland, Oregon TOD case studies—is to begin filling in that gap by analyzing one of the most well-known TODs in the country, Orenco Station. (more…)

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No More Failed Rail

Light rail was first introduced to the Portland Metro region by TriMet in the late 1980s. Since then a total of five “MAX” lines have been constructed. The Metro Council and TriMet have made the same promises every time a light rail line has been considered—that it will decrease traffic, cut greenhouse gas emissions, cut down on travel times, have frequent headways, and have high levels of ridership.

Every time these promises are made; every time these same promises are broken.

Traffic congestion increases as travel lanes are stripped away from drivers so that light rail can have an exclusive right away. Travel times are longer than promised as light rail speeds decrease year after year. Train headways are less frequent, often occurring every 15-30 minutes instead of the promised 7-10 minutes. It takes decades for a MAX line to account for the greenhouse gas emissions that are produced during the construction of the line, and that’s if ridership is as high as Metro and TriMet have forecasted.

However, ridership numbers never come close to estimated levels. In fact, TriMet ridership has been decreasing every year since 2015, meaning that any new light rail line will have a high cost with very little added benefit.

The same promises are being made again by Metro and TriMet with the proposed SW Corridor Light Rail project, which will travel from downtown Portland to Tigard’s Bridgeport Village. The project is currently set to cost between $2.35-2.76 billion in 2023 dollars, though this amount is likely to increase based on the experiences of past lines. A vote on regional funding for the project is set to occur in November 2020.

Click below to learn more about the No More Failed Rail project and why you should vote “no” for another unsuccessful light rail line.

 

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Energy-Efficiency Myths of Commuter Rail

Advocates of rail transit tend to argue that we need trains because they are more energy-efficient than buses or cars. Unfortunately, that’s only true in some cases.

According to a new report by the Federal Railroad Administration, the average energy consumed by all commuter rail systems in America during 2011 was 2,923 British Thermal Units (BTUs) per passenger-mile. But the commuter line operated by TriMet (WES) was close to the bottom: WES consumed 5,961 BTU per passenger-mile, more than twice the national average.

Not only is WES inefficient compared with its peer group, but it is wasteful compared with other modes of travel. The national average for all transit buses was 4,240 BTU per passenger-mile; for all light-duty cars, the average was 3,364.

Based on these numbers, the environment would be better off if WES were terminated and riders simply got in their cars.

Nonetheless, TriMet management is “all-in” on more commuter rail. In its proposed FY 15 budget, the agency plans to purchase two additional rail vehicles at a total cost of $8.5 million. None of those costs will be paid by the privileged few who ride WES; debt service will be paid by taxpayers for the next 20 years.

It’s a cliché but still true: In government, nothing succeeds like failure.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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TriMet Finally Admits Rail Problems

Last week I wrote about the problems TriMet is having with its constantly failing rail system. On Wednesday, TriMet General Manager Neil McFarlane announced that the agency is hiring an outside firm to review light rail maintenance needs. The contract will cost a maximum of $245,000.

This is an important acknowledgment by TriMet that the vaunted regional rail system is suffering from chronic breakdowns that will require ever-increasing levels of maintenance.

The ownership problems associated with rail transit are well known within the industry. Indeed, four years ago the head of the Federal Transit Administration (FTA), Peter Rogoff, gave a speech on this topic to a room full of transit executives. Mr. Rogoff reminded people that rail systems have significant long-term costs. FTA had recently concluded that there were more than $78 billion in deferred maintenance costs for public transit agencies in the U.S., and three-fourths of those costs were associated with rail systems.

TriMet management is having to face up to this reality. The supposed “operating advantages” of hauling rail cars disappear when the lifecycle costs of rail system ownership are taken into account. Bus transit doesn’t face these problems. The cost of a bus is only one-tenth the cost of a rail car; it can be sent to many locations rather than a few dozen; and the ubiquitous road system is paid for by millions of motorists, not the transit agency. This keeps the maintenance costs of bus transit to a manageable level.

Unfortunately, TriMet is in a financial free-fall, and absorbing substantial costs for depreciation and maintenance of light rail will worsen the fall for a long time to come.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. 

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The Chronic Failure of Rail Transit

The local transit agency, TriMet, likes to claim that continued expansion of the regional rail system is critical because rail has operational cost savings over buses.

Unfortunately, this assertion overlooks a glaring problem: The rail system breaks down approximately 30% of the time.

I subscribe to a TriMet email system that notifies me every time there are service outages on light rail or the streetcar. During the past 12 months, I received 117 such notices.

The Steel Bridge rail crossing is the source of most problems, and when it goes out, four MAX lines are affected. Thousands of riders are inconvenienced, often for hours. But there are many other reasons for rail malfunctions: cold weather, hot weather, collisions with automobiles, and security problems, to name a few.

In addition, Portland streetcar service was completely shut down in the South Waterfront for three weeks in September, due to construction of the Milwaukie light rail line.

In every case of a rail outage, passengers have to be rescued by buses. The road system is ubiquitous, so buses have many options for traveling from one location to another. When a rail car goes down, everything behind it backs up.

TriMet’s management is obsessed with building more rail, but the backbone of daily service is the ordinary bus.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. 

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Westside Commuter Rail: A Financial Train Wreck

John A. Charles, Jr.Cascade Commentary

Westside Commuter Rail: A Financial Train Wreck

By John A. Charles, Jr.

Download the pdf here

February marked the one-year anniversary of the Westside Express Service (WES), the 14.7-mile commuter rail line that runs from Wilsonville to Beaverton. While the train’s owner, TriMet, has gone to great lengths to put a positive spin on this, the truth is that WES has been a failure. The daily ridership is only half of what was projected, and taxpayers subsidize each rider by at least $45 per round trip.

At a time when TriMet faces a $27 million budget shortfall for the next fiscal year, we have to consider whether we can afford the luxury of a commuter train that runs almost empty.

(more…)

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Paving the rails with gold

John A. Charles, Jr.QuickPoint!

Since the voter defeat of Measure 28, public officials in the Portland region have proposed numerous emergency tax plans to stave off service cuts such as shortened school years. Oddly, these same elected officials are warmly embracing the joint proposal of Metro and TriMet to spend $850 million building two new light rail lines.

According to Metro’s Environmental Impact Statement, each new trip on light rail will cost (more…)

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Traffic-jam-with-rows-of-cars-cm

T2020 is the transportation measure that Metro wants—not Portland residents

By Rachel Dawson

Is it possible to spend billions of dollars on transportation to make congestion worse? According to Metro, the answer is “yes.”

More than 75% of residents in the Portland tri-county region commute to work by car. Therefore, it should come as no surprise that a similar percentage of voters surveyed by Metro consider traffic congestion a serious problem (73%) and say that improving roads, bridges, and highways to ease traffic should be a regional goal (78%).

Share of respondents who answered each issue is an “extremely” or “very serious” problem.

Next year, Metro wants to raise at least $3 billion in taxes for its transportation package (informally known as “T2020”). That $3 billion is just for what Metro calls its “Tier 1” projects; it still has a long list of “Tier 2” projects that could significantly increase the price. To pay for all that, Metro is considering bonds that would increase property taxes, an additional vehicle registration fee of up to $59, an income tax, or possibly a sales tax. Conservatively, Metro’s transportation package would cost the average household an additional $530 a year in taxes and fees and would be the largest proposed tax increase in Metro’s history.

But, Metro’s T2020 tax package is not the proposal residents in the region want. Close to $2 billion from the plan have been earmarked for transit. Of that amount, nearly $1 billion would go toward a light rail line to Bridgeport Village. Another $50 million would be spent on planning for a MAX light rail tunnel under the Willamette River—planning that most survey respondents did not support. Millions more will be spent devising potential MAX light rail expansions along Powell Blvd to I-205 and 99E from the Orange line’s last stop in Milwaukie to Oregon City.

In contrast, when voters were surveyed regarding the goals for additional transportation funding, more than twice as many people indicated that widening roads and highways to address bottlenecks (31%) was their first choice, compared with only 13% of respondents who preferred providing more frequent and faster bus and MAX service. Widening roads was by far the most popular choice, beating out retrofitting bridges to be earthquake resilient and improving pedestrian safety on streets.

Finally, when asked about specific types of projects that could be funded by a transportation ballot measure, repairing potholes had the highest percentage of support (86%), while upgrading MAX to run underground at a cost of $5 billion dollars was the only potential project mentioned to have support from less than half of respondents (only 44%).

Portland residents were clear about what they want: better roads and less congestion on roadways. They were equally clear about not supporting MAX upgrades.

Instead of crafting a measure that reflects what people want, Metro has chosen to allocate the majority of funds in their 2020 transportation measure to areas that received the lowest amount of support, such as public transportation and biking/walking infrastructure improvements. It is clear these are projects that Metro staff, not voters, want for the region.

Based on respondents’ answers, officials should consider adding auxiliary lanes on freeways and major arterials to address congestion in bottlenecks. For example, a new auxiliary lane on I-5 southbound from OR 217 to I-205 brought congestion levels down from five hours a day to only one; and an auxiliary lane added to 217 between 99W and I-5 S improved congestion from four hours to zero. Adding auxiliary lanes decreases the number of merges that occur at a given section. This in turn would lead to fewer vehicle emissions, as cars idling in congestion produce more emissions than driving in free-flowing traffic. Also, merging onto a freeway is a major cause of accidents, so decreasing the number of merges also improves safety.

Metro staff seem to forget their job is to serve the public. They are attempting to force their own transportation agenda on the region instead of providing the improvements residents say are most important. Portland metro residents should stand up to this bullying by voting “no” on Metro’s transportation bond measure next year. We need improved transportation, not more low-use government pet projects.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was published by Pamplin Media Group on November 27, 2019.

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Like Other MAX Projects, TriMet’s Green Line Underdelivers at 10th Anniversary

By Rachel Dawson

TriMet has proven time and again that it is unable to live up to past promises. The MAX Green Line, which first opened 10 years ago, is no exception.

The Green Line is fifteen miles long and runs along I-205 from Portland State University to the Clackamas Town Center (CTC). It began as a portion of the North-South light rail alignment, which was canceled in 1988 after failing to secure voter funding. TriMet attempted to scale the alignment down to run from North Portland to the CTC, but the project was again rejected by voters in 1996 and 1998.

The plan for light rail to the CTC was later resurrected in 2001, and planning for the Green Line commenced in concert with the more recently implemented Orange Line to Milwaukie.

The alignment eventually earned federal approval in 2006. Of the total $575.7 million price tag, $478.2 million came from the federal government, $23 million came from the state, and $74.5 million came from local jurisdictions.

Of the local match, $69 million came from the City of Portland, $39.3 million from Clackamas County (the majority of which came from the county’s urban renewal funds), $23 million from the Oregon Department of Transportation, $20.5 million from TriMet, and $6.2 million from land donation and other funds.

The Green Line has failed to live up to these promised expectations:

Ridership is lower than projected. When the Federal Transit Administration completed its 2015 “Before and After Study” on the line, there was an average 24,000 daily weekday boarding rides. This is well below the 30,400 riders that TriMet predicted at entry into preliminary engineering for the line’s opening year. That number has continued to decrease to just over 16,000 average daily riders in August 2019, making up only 34% of the FEIS’s predicted ridership levels for 2025. With five years to go until 2025, it seems unlikely that the Green Line will garner the 30,500 riders needed to hit TriMet’s promised level of 46,500 boarding rides.

The line has lower frequency than promised. Trains arrive at stations every 15 minutes during peak periods and every 35 minutes at other times of the day. TriMet promised trains would arrive every 10 minutes during peak hours and every 15 during other times. TriMet attempted to blame this low level of service on a decline in tax revenues during the recession, but train frequency has not increased since the economy has recovered. Furthermore, TriMet’s total operating and non-operating revenues increased from 2009 to 2018 by 54%, and revenue from payroll and other taxes increased by 71%. The payroll tax rate will continue to go up every year until 2024, although it appears the Green Line’s level of service won’t increase with it.

Instead of the promised passengers, light rail brought increased crime to the CTC area. Clackamas County experienced heightened crime in the corridor from 2009-2012 after the Green Line opened and an increase in graffiti around MAX stops, according to a survey by the Oregon High Intensity Drug Trafficking Areas Program sent to the Clackamas County Sheriff.

Unsurprisingly, the line’s cost was higher than TriMet originally anticipated. The final price tag of $576 million was 14% greater than the anticipated cost in preliminary engineering, a difference of about $70 million.

TriMet is now planning for a 12-mile line from downtown Portland to Tigard. Elected officials from Tualatin, Tigard, Durham, and Washington County should take a sobering look at TriMet’s track record on the Green Line, the Yellow Line, and WES. It shows a consistent pattern of over-promising and under-performing. Given this history, TriMet’s projections for the SW Corridor project should not be trusted.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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TriMet Broke Key Promises About MAX

Published in Portland Tribune

By Rachel Dawson

TriMet’s payroll tax has been increasing since 2005 and will continue to go up every year until 2024. There is no issue with revenue; rather, the issue lies with light rail.

TriMet’s MAX Yellow Line first opened 15 years ago in May 2004. The Yellow Line’s Final Environmental Impact Statement (FEIS) made a myriad of predictions for the year 2020, which makes now the perfect time to reflect on what officials promised and what taxpayers and transit riders since have received.

The Yellow Line originated in 1988 as a 21-mile project connecting Vancouver, Washington, with downtown Portland and Clackamas Town Center. This plan was scrapped after Clark County voters defeated a proposal to raise $236.5 million in 1995 and Oregon voters turned down a $475 million regional ballot measure in 1998.

Read the full article here

Content credit to Portland Tribune

 

 

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The MAX Yellow Line: A Look Back After 15 Years

By Rachel Dawson

TriMet’s MAX Yellow Line first opened 15 years ago in May 2004. The Yellow Line’s Final Environmental Impact Statement (FEIS) made a myriad of predictions for the year 2020, which makes now the perfect time to reflect on what officials promised and what taxpayers and transit riders have since received.

Yellow Line History

The Yellow Line originated in 1988 as a 21-mile project connecting Vancouver, Washington with Downtown Portland and Clackamas Town Center. This plan was scrapped after Clark County voters defeated a proposal to raise $236.5 million in 1995 and Oregon voters turned down a $475 million regional ballot measure in 1998.

Not to be deterred by a lack of voter support, officials developed a shorter alternative in 1999 that would run from the Expo Center to Downtown Portland along Interstate Avenue. This alternative cost $350 million, 74% of which came from the Federal Transit Administration (FTA).

The construction of the new alternative was not put to a public vote. Portland officials instead expanded an urban renewal district to include the Interstate Avenue Corridor. Doing so allowed them to appropriate $30 million in tax increment funds to finance the rail that otherwise would have gone to other tax-collecting jurisdictions, including Multnomah County. The county commissioners opposed expansion of the urban renewal district, but the Portland City Council approved it anyway.

Looking back after fifteen years, we find that key promises made in the FEIS were never kept:

1.  Frequency of Service

What We Were Promised: TriMet promised FTA in their Full-Funding Grant Agreement (FFGA) that peak-hour trains would arrive every ten minutes and off-peak trains every 15 minutes. The promised service according to the FEIS was supposed to reach eight trains during peak hours in 2020.

What We Received: Instead of having 10-15-minute headways between trains, the Yellow Line runs every 15 minutes during peak-periods and every 30 minutes during other parts of the day.

2.  Travel Times

What We Were Promised: TriMet predicted travel times to be 24 minutes from Downtown Portland to the Expo Center and 19 minutes from Downtown Portland to N Lombard.[1] Light rail speeds were projected to reach 15.3 miles per hour (mph), and bus speeds were projected to be 13.2 mph in 2005.[2]

What We Received: Actual travel times are slower than predicted. It takes 35 minutes to take light rail from Downtown Portland to the Expo Center and 28 minutes from Downtown Portland to N Lombard, even though light rail has its own exclusive right of way. Actual travel times are 45.8% greater to the Expo Center and 47.4% greater to N Lombard. Actual light rail speeds in the corridor only hit 14.1 mph in 2005 while bus speeds averaged 16.1 mph—significantly faster than predicted.

3.  High ridership

What We Were Promised: The FEIS forecasted ridership in the corridor to dramatically increase with the building of the Yellow Line. By 2020 the line’s ridership was expected to have 18,100 average weekday riders.

What We Received: At no point since the Yellow Line opened has ridership met projected levels. In April 2019 ridership only reached 13,270, 26.7% less than projected. This number will not meet 2020 projected levels based upon the negative trend observed over the past three years. From March 2016 to March 2019 ridership levels decreased by 3.6%.

Lower than promised ridership isn’t unique to the Yellow Line; every TriMet rail forecast has been wrong, and always wrong on the high side.

Light Rail Is Not Superior to Bus Transit

The Yellow Line was expected to provide superior service compared to the no-build bus alternative. This forecast hasn’t panned out. The Yellow Line replaced Line #5, which if it were still operating, would have seven-minute headways between Vancouver and Downtown Portland. C-Tran express service was forecasted to have three-minute headways.[3]

Light rail does not reach any more people or businesses than Line #5 did. In fact, Line #5 had more stops along Interstate Avenue, meaning some riders now have a longer walking commute to the MAX stations.

TriMet bus service from Vancouver to Downtown Portland continues to be an option even after the Yellow Line’s construction. Line #6 was changed to pick up the link between Jantzen Beach and the Yellow Line’s Delta Park stop that Line #5 had previously serviced. It then continues down MLK Boulevard to the Portland City Center.

In Spring 2019, Line #6 saw 665 average weekday on/offs at Jantzen Beach and only 190 total on/offs at Delta Park. This means that the vast majority of Vancouver commuters on Line #6 opt to stay on the bus to Portland instead of transferring to the Yellow Line.

Given the Yellow Line’s history, we can expect the prospective SW Corridor light rail project to increase traffic, have fewer trains than promised, and have lower ridership than predicted. If ridership levels are 26.7% below forecast 15 years into service, why should the SW Corridor ridership estimate of 43,000 daily boardings be taken seriously? The FTA should not offer TriMet additional light rail funding in the future if TriMet is unable to honor its past promises.

TriMet may argue that service levels are below EIS forecasted levels due to a lack of funds. However, TriMet’s revenue increase in recent years tells otherwise. Between 1998 and 2018, passenger fares increased by 116% and tax revenue increased by 64%. TriMet’s payroll tax has been increasing since 2005 and will continue to go up every year until 2024. There is no issue with revenue; rather, the issue lies with light rail.

Moving forward, Metro and TriMet should focus on creating a more reliable bus network that runs on an already built road system. Doing so will benefit riders and taxpayers alike.

__________________________

[1] Federal Transportation Authority, Interstate MAX Before and After Study, 2005, 2-5.

[2] Id, 2-10.

[3] North Corridor Instate MAX Light Rail Project, Final Environmental Impact Statement Executive Summary, October 1999, S-17.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Better Buses May Be the Transit Solution the SW Corridor Needs

By Rachel Dawson

TriMet may have found a better alternative to the proposed SW Corridor light rail project without realizing it.

TriMet is planning a 15-mile-long transit project on Division Street that will run 60-foot buses from downtown Portland to Gresham. The project is estimated to cost $150 million and will include expanded bus stations that offer protection from the weather and signal priority for buses to cut down on travel times by 20%. Each bus is equipped with three doors and can hold 60% more passengers than the typical TriMet bus.

TriMet discarded the idea of continuing buses along the proposed SW Corridor route in favor of light rail despite decreasing transit ridership and increasing light rail costs. Instead of spending nearly $3 billion on a new light rail line, TriMet could mimic the Division Transit Project and run high capacity buses along the route with upgraded stations for just 5% of light rail’s cost. Running buses on an already built system will save hundreds of residents and employees from being displaced. TriMet can also decrease bus emissions by trading diesel for renewable or compressed natural gas for a cleaner ride.

It’s time for TriMet to stop making excuses for light rail and do what is best for both taxpayers and commuters in Portland.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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SW Corridor Project: A Net Negative for the Environment

By John A. Charles, Jr.

Portland politicians claim to be concerned about carbon dioxide emissions and climate change. That’s why so many of them support TriMet’s proposed 12-mile light rail line from Portland to Bridgeport Village near Tigard. They think it will reduce fossil fuel use.

Their assumptions are wrong.

According to the Environmental Impact Statement (EIS) for the project, energy used during construction of the rail project will equal 5.9 trillion Btu. Much of this will be in the form of fossil fuels needed to power the heavy equipment. Additional energy will be used to manufacture the rail cars, tracks, and overhead wires.

The EIS claims that the negative environmental consequences of construction will be made up by energy saved from operations of the train. However, the operational savings are so small it would take 61 years to mitigate the carbon dioxide emissions of construction.

2035 Daily Vehicle Miles Traveled and Energy Consumption 

Vehicle Type Daily VMT – No build option Million Btu/Day – No build option Daily VMT

With Light Rail

Million Btu/Day

With Light Rail

Passenger vehicle 51,474,286 249,084 51,415,071 248,798
Heavy-duty trucks 3,389,982 73,132 3,389,288 73,117
Transit bus 100,122 3,546 97,501 3,453
Light rail 19,189 1,247 21,200 1,377
TOTAL 54,983,579 327,009 54,923,060 326,745

                                          Source: Draft EIS, SW Corridor Project

Unfortunately, all of the light rail cars will need to be replaced before then. Building new cars will require more energy, resulting in additional CO2 emissions and a longer payback period.

Light rail is not a solution to a perceived climate change problem; it IS a climate change problem. Any further planning for the SW Corridor project should be terminated.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Metro Transportation Funding Task Force Testimony

By John A. Charles, Jr.

At the last meeting, there was a fair amount of discussion about how the proposed bond measure should be structured to reduce GHG emissions from the transportation network.

If that is the direction the committee prefers, then it implies that the bond measure should not fund any road expansion projects. But it also has implications for light rail construction.

According to the Draft Environmental Impact Statement (DEIS) for the SW Corridor project, the estimated energy consumption during construction of light rail will be 5,886,876 million Btu. The DEIS also asserts that the “one-time energy use required to construct the Light Rail Alternative would be offset by the project’s long-term, beneficial operational impacts.”

To determine if this is true, we can look at the estimated daily energy savings from rail operations. On page 4-129 of the DEIS, the following information is presented:

2035 Daily Vehicle Miles Traveled and Energy Consumption

Vehicle Type Daily VMT – No build option Million Btu/Day – No build option Daily VMT

Light Rail option

Million Btu/Day

Light Rail option

Passenger vehicle 51,474,286 249,084 51,415,071 248,798
Heavy-duty trucks 3,389,982 73,132 3,389,288 73,117
Transit bus 100,122 3,546 97,501 3,453
Light rail 19,189 1,247 21,200 1,377
TOTAL 54,983,579 327,009 54,923,060 326,745

 

Since the energy savings from light rail operation compared with the base case are quite small, it would take 61.09 years to overcome the GHG deficit caused by construction. Also, the useful life of the equipment is likely to be only 40 years, so replacing all the light rail cars and track system would create another energy deficit.

If you asked the Energy Trust of Oregon for a grant to install an energy conservation project with a 61-year payback, they would probably reject your request. Cost-effective energy efficiency projects need to have a payback period that is less than the lifespan of the equipment.

Given the over-riding goal of GHG reduction, I recommend that bond expenditures be limited to bike and pedestrian projects only. Among other things, this would drop the total cost by about 90%, which would greatly increase the chance of voter approval.

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Taxpayers Should Demand Accountability Before Passing (Another) Metro Bond Measure

By Miranda Bonifield

Last November, Metro gained approval from Portland voters to borrow $652 million for low-income public housing projects. In 2020, they’ll ask for $850 million for a light rail project.

This year, the regional government is proposing a $475 million bond measure to fund parks and nature projects. While Metro argues this is not a tax increase, the reality is that borrowing $475 million will cost taxpayers over $800 million between principal and interest payments. And judging by precedent, Metro will ask for additional funds before they’ve completed the projects currently on their roster. Metro has owned its largest nature park, Chehalem Ridge, for nearly a decade without making it accessible to the public—making it a nature project, but not a park. Metro continually asks voters to pay full costs without delivering full benefits.

In 2016, Metro persuaded voters to approve additional funding for similar projects despite concerns that the regional government ought to make smaller demands and demonstrate its reliability. While audits have found some improvements since 2016, Metro still struggles to demonstrate measurable benefits from the thousands of acres they already possess.

The Metro Council will be finalizing the bond language and hearing public testimony in their Portland headquarters at 2 p.m. on June 6. Voters should require accountability and consistency from Metro before indebting ourselves for another twenty years.

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Testimony Before the Joint Subcommittee on Capital Construction HB 5005

By John A. Charles, Jr.

Members of the subcommittee, my name is John Charles and I am President and CEO of Cascade Policy Institute, a nonpartisan policy research organization.

Most witnesses ask you to spend money. I am here asking you to save money – by deleting the Governor’s request for $27.5 million in lottery-backed bonds for TriMet’s planned light rail line to Bridgeport Village mall near Tualatin.

It’s important to note that HB 5005 is actually the first part of a two-part request for this project. As Ms. Gabriel stated in her April 5 briefing, the Governor will be asking for an additional $125 million of bond revenue in the next biennium, so you should really think of this as an appropriation of $152.5 million.

I encourage you to reject the request because TriMet has a consistent record of over-promising and under-performing on all its capital construction projects, as detailed below. You should stop rewarding that kind of behavior.

Analysis of the SW Corridor Project

TriMet makes two primary claims regarding this light rail line. First, it will attract 43,000 average weekday riders by 2035. Second, it will provide a “reliable, fast travel option” between Bridgeport Village and Portland.

Neither of these claims is plausible.

TriMet Ridership projections are always inflated

TriMet has a 40-year track record of making ridership forecasts. They have been consistently wrong, and always on the high side. As Figure 1 shows, actual ridership has never even reached 60% of projected ridership on a specific rail line. In 2017 total average weekday ridership was less than half the predicted ridership for MAX in 2020. 

Click here for the full document.

SW Corridor Light Rail Project Joint Ways and Means Committee Testimony John Charles April 2019

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Our Most Pressing Environmental Crisis Is at Home

By Miranda Bonifield

Oregon’s most pressing environmental crisis isn’t in forests or renewable energy. Our human habitats have been endangered by our restrictive so-called “smart growth” policies. Even when we talk about allowing growth, policymakers tend to favor light rail over people’s real needs. Senate Bill 10, which would require cities like Portland to allow development of 75 housing units per acre in public transit corridors, misses the mark in two key areas.

First, the bill’s attempt to legislate the location of new development won’t improve transit ridership. Despite billions in new light rail lines and mixed-use developments, TriMet’s ridership has been declining since 2012.

Second, the bill removes parking minimums from these developments. This could lower the cost of development, but it could also worsen parking and traffic problems in a city that’s been trying and failing to cut down on automobile use for decades. It’s a mistake to allow denser development while assuming that the people who live here will depend on public transit rather than cars.

Taking the shackles off developers so that we can provide housing is a good idea, but lawmakers need to plan around people rather than trying to stack people into their plan. Transit-oriented development hasn’t worked in the last twenty years. It’s not going to start working today.

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Metro’s Priorities Don’t Match Yours

By John A. Charles, Jr.

The Portland regional government known as Metro recently published the results of a poll regarding the most important issues to the region. Unsurprisingly, traffic congestion emerged as the number one concern: 96% of all respondents stated that congestion was a serious problem.

These results are consistent with virtually every poll taken over the past 25 years, yet congestion continues to get worse. The reason is that the Metro Council refuses to improve driving conditions and authorize new bridges and highways where they are needed, such as the west side of Portland.

Instead, Metro is determined to spend enormous sums of public money on additional light rail service that most people will never use.

Metro has appointed a 30-person Task Force to draft a ballot measure for 2020 seeking billions of dollars to build a light rail line to Bridgeport Village. This would be a complete waste of money. Transit ridership peaked in 2012. Since then, thousands of customers have left for Uber and Lyft, and they’re not coming back. TriMet is becoming irrelevant.

Sadly, no one at Metro or TriMet cares what taxpayers want—they only care about expanding their bureaucratic empires. Voters should remember this when the bond measure is unveiled later this year.

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John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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The Housing Affordability Crisis: The Role of Anti-Sprawl Policy

By Randall Pozdena, Ph.D.

Executive Summary

So-called smart growth policies are advocated as a means of avoiding sprawl.  These policies have at their heart a policy of reducing the availability of land for housing in urban areas. In Oregon and some other states, anti-sprawl policy is implemented by regulations that impose urban growth boundaries (UGBs).  Other regulations impose minimum density policies and others reduce spending on highways and increase spending on transit service—especially light rail—as an alternative.  Advocates of anti-sprawl policies argue that such regulations would allow urban growth to proceed at a lower overall cost.

Many states adopted smart growth policies in the last five decades—enough time for the policies to have demonstrated their purported advantages.  The evidence, at least on the housing front, is that the cost-containment claims have not materialized.  Instead, many urban areas are finding themselves with home prices that make ownership and rental of housing increasingly unaffordable.  Cities and states are thus using or considering additional regulations and subsidy policies to provide their residents with more affordable housing.  There is virtually no discussion of whether anti-sprawl regulatory interventions precipitated the housing crisis, let alone consideration of abandoning the policy.

The purpose of this study is to examine the links between anti-sprawl regulations and the spectacular increases in housing costs and the virtual disappearance of affordable housing in many markets.  Specifically, we measure the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of US land uses.

We apply the analysis to data from all 50 states and identify those states whose development policies reflect constrained site supply and those that do not.  Because Oregon has among the longest-standing and most aggressive implementations of smart growth land use policy, we pay particular attention to the state, and drill down with analyses at the Metropolitan Statistical Area (MSA) level in Oregon to demonstrate that the state-level findings are corroborated for all of its MSAs.

The primary metrics examined in this study are the rate of housing price appreciation, the degree of rigidity (“inelasticity”) of the supply of new homesites, and the degree to which the housing stock has failed to increase enough to affordably provide additional housing services.  Since we note that the adverse trends in house price inflation and slowing of site supply took greatest effect the last 30 years or so, we scrutinize market behavior subsequent to this period.  Because of the onset of the Great Recession in 2007, however, we estimate our models on this period.  This is because we do not wish to conflate the effects of anti-sprawl policy with the collapse of mortgage markets and home construction that persisted for the next half decade.

After establishing the linkage between constrained site supply and housing prices and affordability, we turn to the evaluation of the various policies that are in place or proposed to redress these problems.  This analysis is performed for the state of Oregon only.  The State’s wide-ranging and aggressive policies and proposals make it broadly representative of the nature, cost, and effectiveness of these policies—both those in place and those recently proposed.  With theory as a guide, and our acquired knowledge of the reactivity of the housing market to various stimuli, we can then opine on the likely effectiveness of these policies.  We also offer our own suggestions.

At the national level, using state and MSA data, we find the following:

  1. Twenty-three of the 50 states studied fail to provide housing units at a volume adequate to keep housing prices and incomes growing at a rate consistent with affordability. On average, these states under-provided housing units by 6.4 percent of their current stock of housing units.
  2. We demonstrate that those states that fail the affordability and supply adequacy test are overwhelmingly those with documented adoption of one or more aggressive anti-sprawl growth regulatory initiatives.
  3. Annual housing price inflation exceeded annual income growth by 14 percent each year during the study period in those states that failed to provide housing in sufficient quantity to keep it affordable. Extrapolating the findings to the nation, the housing stock is smaller by as much as 4.5 million housing units (in 2015 likely) than it should have been to preserve affordability.

Because Oregon has aggressively pursued anti-sprawl policy, it was given special attention in the study.  We found the following:

  1. All eight of Oregon’s MSA housing markets failed the test of affordability and adequacy of supply over the various study periods for which data was available. The estimated total shortfall in supply equals approximately 18 percent of the existing stock—virtually identical to that found for Oregon using state-level data.
  2. We analyzed the current and proposed housing policies of the state of Oregon. At present, proposals include approximately $2.3 billion by the State and the Department of Housing and Urban Development (HUD) to assist housing access and over $600 million in new affordability-related programs. This study finds that there is little hope that these policies can redress the scale and extent of Oregon’s affordable housing problems and, in some cases, may worsen them by burdening developers of housing with new regulations.

In summary, this study finds anti-sprawl policy to have been implemented in a manner that has pernicious effects on housing affordability.  Specifically, regulatory constraints on site supply have caused an on-going crisis of housing supply and affordability.  In many markets, the development of land for housing is regulated too aggressively.  Additionally, existing and new programs for addressing housing affordability rely on other regulation and spending programs that will not have the designed effect of providing affordable housing.  This study strongly recommends, instead, relaxation of regulations that limit the land area available for housing development.  Any residual concerns about sprawl should be addressed by reforming current highway and transit pricing and finance practices, which are known to be economically inefficient.

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Press Release: Report shows ride-hailing services would be a viable solution for TriMet’s high-cost bus lines

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, Ore. – Today Cascade Policy Institute released a report that recommends TriMet pursue a one-year pilot program which replaces one or more high-cost and low-ridership bus lines with ride-hailing services. The program would be supported by a subsidy funded by the costs saved by eliminating the bus line.

The report, Ride-Hailing as a Solution for TriMet’s High Cost Bus Lines: A Proposal for a Pilot Project, was authored by Eric Fruits, Ph.D., an Oregon based economist and Portland State University adjunct professor.

The proposed pilot program would offer riders point to point service from ride-hailing companies like Uber and Lyft within a ride-hail zone, when and where within the zone would be most convenient to the rider. The two high-cost bus lines suggested by Fruits include lines 97 (Tualatin-Sherwood Rd) and 63 (Washington Park/Arlington Hts). These lines intersect other bus lines and MAX stops, so the proof of the transaction should be used as a 2.5-hour TriMet pass. Doing so would allow passengers to connect to other buses or light rail in the area.

Cascade President and CEO John A. Charles, Jr. stated, “TriMet should embrace the benefits ride-hailing services offer instead of viewing them as a threat. Pairing services like Uber and Lyft with TriMet’s bus services would give riders a convenient and affordable way to commute while saving TriMet considerable money.” Indeed, the cost of subsidizing 75% of a user’s ride-share fare would be 55% lower than the current cost of operating proposed bus lines 97 and 63.

This proposal comes with its own set of challenges in the form of barriers to access. Services such as Uber and Lyft are hailed through an app on an individual’s smartphone and paid for by linking an individual’s bank account to the app. Some TriMet users do not own either a smartphone or a bank account. Jurisdictions which have adopted similar programs have handled this challenge by creating call centers available to riders without smartphones and by giving unbanked riders prepaid gift cards.

Ride-hailing services also contract out wheelchair accessible rides to third-party companies which would allow disabled riders to continue to commute in the corridor.

Similar pilot projects have been implemented in cities across the United States as transit authorities have recognized and taken advantage of the benefits ride-hailing services offer. TriMet should follow suit and engage in a low-stakes, one-year pilot project in order to cut costs that are rising due to declining ridership in certain areas. Doing so will serve riders, TriMet, and taxpayers alike.

The full report, Ride-Hailing as a Solution for TriMet’s High Cost Bus Lines: A Proposal for a Pilot Project, can be downloaded here.

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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High Costs and Low Ridership Are Nothing New for Southwest Corridor Project

By Rachel Dawson

Decreasing ridership paired with increasing costs makes for a bad business decision for TriMet’s proposed Southwest Corridor plan. The TriMet proposal would add an additional light rail line stretching from downtown Portland to Bridgeport Village in Tigard. The project’s draft environmental impact statement predicts what TriMet thinks will happen, without taking into consideration what has occurred with past projects.

The plan estimates that rides on every current light rail line will more than double, and the total weekday rides will nearly triple by the year 2035. However, in recent years light rail rides have been decreasing or plateauing across the board.

But overpredicting ridership isn’t anything new: Every single past TriMet light rail plan overestimated the number of rides it would have.

Additionally, the capital costs of light rail projects historically have been underestimated, meaning projects have proven to be more expensive than what TriMet had predicted. This has already become evident with the Southwest Corridor plan: In 2016 the capital costs were predicted to be $1.8 billion dollars, which increased to $2.8 billion in 2018.

Increasing prices plus decreasing ridership sounds more like a recipe for economic disaster than a successful project. You have the opportunity to voice your opinion at the southwest corridor public hearing on Thursday, July 19 at the Tigard City Hall.

Rachel Dawson is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Metro’s November Bond Measure Would Make All Housing More Costly

By John A. Charles, Jr.

Metro recently decided to refer a $652.8 million bond measure to the November ballot. If approved by voters, it would authorize Metro to borrow money either to purchase existing housing units or to subsidize the construction of new ones. The loans would be paid off by higher taxes on every property owner in the region for the next 30 years.

Unfortunately, of all the things Metro could do to reduce the price of housing, borrowing money is likely to be the least effective.

For one thing, new construction is expensive. Many public housing projects in recent years have cost more than $250,000 per unit. If Metro is lucky, the bond measure might pay for a total of 2,400-3,000 new apartments. Since the Portland region produces over 10,000 units of new housing every year, Metro’s intervention would not even be noticed.

In addition, borrowing $652.8 million and paying it back with interest (for a total of over $1 billion in debt service) would make every current home and apartment more expensive. We can’t tax ourselves to prosperity.

The basic weakness in the Metro bond measure is that it misdiagnoses the problem. When the Metro Council adopted its long-range growth management plan in 1995, it made a conscious decision to limit the physical size of the urbanized metropolitan region. That limit is imposed through Metro’s control of the Urban Growth Boundary. The planning goal was to “grow up, not out,” in order to prevent rural development and create the population density needed for light rail.

While that vision may sound appealing to some, there is a tradeoff: It limits the supply of new housing. Metro has always known this. As the agency’s economists wrote in 1994, “…the data suggest a public welfare tradeoff for increased density, more transit use, and reduced vehicle miles traveled. The downside of pursuing such objectives appears to be higher housing prices and reduced housing output.”

Metro controls the regional land supply and doesn’t want lots of cheap land for housing. Metro actually needs land to be scarce and expensive, because that’s the only way to justify its vision of high-density housing projects and light rail transit. Inevitably, this will be self-defeating; higher home prices will push more and more people out of Portland, where they will become even more auto-dependent.

In addition to its control of the regional land supply, Metro also imposes a tax of 0.12 percent on all new housing construction, with the exception of projects where the value of land improvements is less than $100,000. The tax revenues are used to pay for planning required on lands that might be used for housing in the future. The City of Portland also imposes its own tax for a similar purpose, at a much higher rate. It should be obvious that taxing new construction makes the housing problem worse.

Metro’s November Bond Measure Would Make All Housing More Costly The best thing Metro could do would be to systematically inventory every artificial barrier to housing production, such as zoning ordinances, planning requirements, building codes, system development charges, and hidden taxes—and figure out a way to reduce or eliminate them.

In other sectors of the economy where supply is unregulated, the market does a wonderful job of providing us with the products we want at reasonable prices. The same thing will happen in housing, if we allow it.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on July 3, 2018.

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TriMet Shows That Public Pension Reform Is Possible

By Scott Shepard and John A. Charles, Jr.

The Oregon Legislature is currently meeting, and the conventional wisdom is that reform of Oregon’s overly generous Public Employee Retirement System (PERS) is impossible. According to Governor Kate Brown, we signed contracts with public employee unions, a deal is a deal, and we should just quietly accept our fate that the massive cost of PERS will lead to layoffs and service cuts at schools and other service providers.

There is another way.

The Portland regional transit district, TriMet, is not part of PERS and has been slowly reforming its pension program since 2002. As a result, 100% of all new employees are now in 401(k)-style pensions that have no long-term liabilities for employers. These are referred to as “defined-contribution” (DC) pensions in which monthly payments are made by management into personal accounts owned by employees. Once those payments are made, the employer has no further financial obligations. The eventual pension payouts will be a function of the market performance of whatever investments are chosen by individual employees.

This stands in contrast to “defined benefit” (DB) programs like PERS in which employees are promised various levels of retirement payments calculated through arcane formulas that leave management mostly clueless about the level of funding obligation they’ve agreed to. In many cases, those liabilities turn out to be much larger than expected.

The advantages for taxpayers of moving public employees into DC pensions is now evident in the actuarial valuations done for TriMet. According to the most recent valuation, projected annual benefit payments for TriMet DB pensions will peak in 2034 at $74.6 million, and then steadily decline to $6 million in 2072. They will hit zero by the turn of the century.

This was not something that TriMet did casually. Management was forced into it because of decisions made a decade earlier that caused long-term retiree obligations to explode. TriMet Board members are appointed by the governor. In the early 1990s, Governor Barbara Roberts and TriMet General Manager Tom Walsh wanted public approval of a massive expansion of TriMet’s light rail empire and the tax funding to pay for it. They feared that controversy about a union contract could endanger public support.

In their efforts to avoid strife, in 1994 they granted expensive concessions to the Amalgamated Transit Union Local 757 (“the ATU”) on behalf of its represented employees. Loren L. Wyss, the long-serving president of TriMet, objected and his battle with Walsh became public. In back-channel communications with Gov. Roberts, Walsh made it clear that either he or Wyss needed to go. In August 1994, Wyss met with Gov. Roberts, where he submitted his resignation.

As later explained in The Oregonian,

“…the contract just approved by Tri-Met union employees will protect all its members from additional contributions to their pensions for 10 years. It will also guarantee 3 percent minimum wage increases in the future…every single dollar of health, welfare, dental and vision plans will be paid for by the public employer; [and] the retirement age will decline to 58 within 10 years….”

The die was set for cost escalation. In the decade from 1994 to 2004, salaries and wages increased 72 percent; annual pension costs went up 160 percent; and the cost of health care benefits rose 116 percent. These increases plus stagnant revenues in the latter half of the period resulted in a tripling of unfunded pension liabilities, from $38 million in 1993 to $112.4 million in 2002.

Fred Hansen followed Tom Walsh as General Manger; and he moved new, non-union hires into DC pensions after 2002. This was a first step towards fiscal sanity. Resistance from the ATU kept TriMet from moving its new unionized workers to DC plans for another decade, by which time a citizens’ committee of Portlanders had issued a report declaring TriMet “on the brink” of disaster.

During a protracted negotiation with the union in 2012, TriMet CFO Beth deHamel testified at a binding arbitration hearing,

“TriMet’s union defined benefit plan would be placed on critical status and under federal oversight if it were a private pension plan subject to ERISA.” She also stated that unless something was done to shore up the plan, “TriMet could be forced to default on its pension obligations or its other financial obligations in the future.”

Union leadership eventually agreed to move all new members to DC pensions by 2013, while protecting existing members from reform. As a result of this delay, the union workers’ DB fund remained only 59 percent funded in 2013.

Nevertheless, the trends were now moving in the right direction. The number of active employees still accruing DB pension benefits fell from 1,580 to 1,460 from 2016 to 2017 alone. In 2017 the unionized workers’ DB account reached nearly 80 percent funding, with unfunded liability falling by nearly $50 million in a single year.

Neil McFarlane was TriMet General Manager during that era. He commented recently, “The shift [to DC pensions] has been a success. TriMet is paying more than the required annual contribution every year right now” because the system is closed. “We will be fully funded within the next few years: five to ten for the union plan, fewer for the non-union.”

The DC plan to which TriMet moved new workers has been recognized as one of the best in the country. It features low costs, high returns, and a guaranteed employer contribution that is paid irrespective of employee matching contributions. As a DC plan it does not create open-ended, unpredictable public liabilities to be paid by generations as yet unborn.

TriMet has not fully banished the ghosts of unsustainable employee-benefit promises past. It still faces a massive and escalating unfunded liability driven by health care costs, known in accounting jargon as “other post-employment benefits,” or OPEB. The health care benefits that TriMet granted away in the 1994 contract debacle have been described as “universal health care into the afterlife.”

The description is only a minor exaggeration, as the plan offered TriMet’s unionized employees health care without premiums and with mere $5 co-pays, and benefits that ran not only throughout retirement, but to the employees’ spouses and dependents for fully 16 years after the employees’ deaths. Total unfunded liability for OPEBs reached an astonishing $769 million dollars in 2016.

Compare: State Paralysis on PERS 

TriMet’s pension reform efforts offer a valuable guide to the Oregon legislature on how to contain and reverse the spiraling PERS disaster. The unfunded liabilities for PERS have grown from $16 billion to more than $25 billion in less than ten years, even with the far-too-optimistic 7.2 percent assumed-savings rate (i.e., discount rate) in place. Were the rate adjusted down to its actuarially appropriate level, PERS’ unfunded liability would explode to $50 billion or more at a stroke.

Even at the current recognized rate, funding status has fallen below 70 percent, even while mandatory payments to PERS by government employers have passed 26 percent of payroll.

Municipalities are laying off workers, depleting public services, and raising fees in order to fund the present level of recognized PERS unfunded liabilities. Some reduction in pension benefits will have to happen, one way or another. All parties will benefit from an orderly effort to reform benefits while there is still time. 

The Way Forward

The state should follow the tracks laid by TriMet by moving its employees from DB to DC plans as soon as possible. As TriMet has demonstrated, this move will begin to stanch the fiscal wounds that have been inflicted by a generation of recklessly overgenerous pension benefit promises.

Unfortunately for everyone, PERS reform has been hamstrung for more than 20 years by a wayward state Supreme Court, which has thwarted previous attempts at thoughtful change with erroneous interpretations of the federal Contract Clause. The legislature will be obliged to make bigger changes than would have been required years ago. It will have to move all current workers, whenever they were hired, to DC plans for all work performed after the date of the effective legislation.

While this reform will be significant, it also will be deeply equitable. Right now, older workers are receiving higher benefits for each hour worked than ever will be available to younger workers. This isn’t fair, and it may violate civil rights laws: Younger workers are more diverse than their older peers, which means that benefit reductions that affect only new workers have a disparate impact on women and minorities.

The reform will also pass constitutional muster. As the Oregon Supreme Court finally recognized in its Moro decision, correcting its long-held error, the legislature may change any benefits for work not yet performed, even for current employees.

The Oregon Legislature can and must follow TriMet’s example. The sooner this is done, the less drastic any later steps will be. According to TriMet General Manager McFarlane, solving a pension crisis “doesn’t get any easier with passing time.”

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free-market research center. Scott Shepard is a lawyer and was a visiting law professor at Willamette University during 2016. This essay is a summary of a case study of TriMet’s pension reform written by Mr. Shepard for Cascade Policy Institute. The full report is available here. This essay was originally published in the February 2018 edition of the newsletter “Oregon Transformation: Ideas for Growth and Change,” a project of Third Century Solutions.

Click here for the full report, Following in TriMet’s Tracks: Defined-Contribution Plans a Necessary First Step to Oregon’s Fiscal Health:

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TriMet Needs a Broader Definition of Diversity

By John A. Charles, Jr.

TriMet has been recruiting a new General Manager for the past six months. At its January meeting, the Board announced the name of the leading contender and offered the public a chance to ask questions.

Before the questioning began, however, an executive search firm hired by TriMet summarized the recruiting process. Celia Kupersmith of KL2 Connects said that more than three dozen applications had been vetted, and a significant number of them were women or racial minorities. A black woman was one of three finalists.

However, the top applicant was Doug Kelsey, a white male currently employed by TriMet.

Many activists in the audience criticized the process. They complained that TriMet had proceeded too quickly and with not enough transparency. In particular, they were upset that virtually all applicants requested privacy in order to protect the jobs they already had. Soon thereafter, the TriMet Board announced that it would delay a final hiring decision while it reassessed its process.

Many of TriMet’s critics have a naïve view of the business world, and it shows in the self-contradictory nature of their demands. They want a deep pool of talent, rich with ethnic and gender diversity, but they also want a very public process. The two goals are mutually exclusive. Complete transparency means most qualified candidates will not apply.

They also have a narrow concept of “diversity.” Race and gender are just two attributes the Board should consider. What about intellectual diversity?

TriMet has been working off the same philosophical playbook for over 35 years. The focus has always been two-fold: (1) building a network of low-speed, low-capacity light rail lines; and (2) maintaining “labor peace” by agreeing to wage agreements that include expensive retiree benefits. That vision is looking very stale these days.

TriMet’s ridership is in a steady decline. It peaked in fiscal year 2012 and ridership has dropped in each of the last three years. Only 2.4% of total travel in the Portland region takes place on transit, making it irrelevant or even a nuisance to most taxpayers.

Light rail has lower ridership today than before the Orange line to Milwaukie was built. During FY 2017, boarding rides per-hour on MAX reached the lowest level since light rail opened in 1986.

TriMet’s financial position would be unsustainable were it not for massive and growing subsidies. During the past two decades, TriMet has promised so much to employees in the form of pensions and post-employment health care benefits that the agency now has unfunded liabilities of nearly $1 billion.

At the TriMet hearing in January, I asked Mr. Kelsey whether he saw any possibility that TriMet’s next light rail project—a multi-billion line to Bridgeport Village—might be canceled under his leadership, given the problems stated above. He responded that light rail was still a very important part of TriMet’s planning and he was not about to abandon it.

That answer concerned me because TriMet seems wedded to an outdated business model. Both in Portland and elsewhere, ridesharing companies such as Uber and Lyft are steadily eroding the market share of both regulated taxis and transit operators. This trend will only accelerate as autonomous vehicles become a reality.

Over the next 20 years, shared driverless cars likely will revolutionize the transit industry. Capital-intensive light rail and streetcar systems will face rising costs with declining ridership, creating a fiscal death spiral.

TriMet and its executive search consultants have done a commendable job of recruiting a diverse field of CEO candidates when measured by race and gender. What is lacking is a broader concept of “diversity” to include new ways of thinking about transit.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in The Portland Tribune.

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Tolling People on to Portland’s Highways

Tolling People on to Portland’s Highways

By John A. Charles, Jr.

Earlier this year the state legislature passed a bill requiring the Oregon Transportation Commission (OTC) to apply for federal authorization to implement “value pricing” on two regional highways: I-205, and I-5 from the Washington border to the intersection with I-205. The OTC must apply by December 31, 2018.

Although value pricing may sound vague or somewhat ominous, motorists should be happy with this new policy. It has the potential to eliminate traffic congestion and create a revenue stream that will allow us to build the new highways and bridges that we need.

First, some background. “Value pricing” is a bureaucratic term for electronic tolling of highways where the toll rates vary based on the density of traffic. Usually, the rates change based on time of day, direction of travel, and day of the week. The rates are set to ensure 45 MPH driving conditions at all times of the day, hence the “value” offered to motorists.

There are many possible variations on this theme. In most cases, value pricing is used on new highway lanes, allowing drivers the option of staying in the unpriced, general purpose lanes. That probably will not be feasible in the Portland region because there is no room for an entire new network of priced lanes on I-5.

In some ways this is a blessing, because variable tolling will make our current lanes more productive. If priced properly, it’s possible that new lanes will not even be needed, saving us the expense of construction.

Value pricing is necessary because our current system cannot address congestion. Our highway network is an open access system, where each trip appears to be “free.” Of course, it’s not free—it’s being paid for by various back-door mechanisms such as motor fuel taxes, vehicle registration fees, and random federal grants. But we think it’s free, so during peak hours we see a “stampede” effect.

When too many people try to get on at the same time, per-lane throughput drops substantially. The carrying capacity for most highways is roughly 1,800 vehicles per-hour in each lane. At times of hyper-congestion, this can drop to 900 vehicles or fewer.

By using variable pricing, we can clear up the stampede and get per-lane travel back to 1,600 or 1,800 vehicles per-hour. In essence, value pricing allows us to “toll on” more people than we “toll off.”

The effect of this was seen recently when tolls on the Port Mann Bridge in Canada were removed on September 1. The Port Mann is a 10-lane bridge over the Fraser River near Vancouver. After tolls were removed, the result was a huge increase in congestion. One driver saw her daily commute increase by 25 minutes each way. She told a news reporter, “Absolutely, it’s terrible. It’s selfish but I want those tolls back on.”

In addition to the benefits of free-flow driving conditions, variable tolling will also create the dedicated revenue stream we need for future highway expansion. There is no doubt that we need several new bridges over the Columbia River, plus additional highway lanes elsewhere. Value pricing will tell us where to build, when to build, and who is willing to pay.

Fortunately, the Oregon Constitution does not allow toll revenues to be siphoned off for non-highway uses such as light rail construction. Therefore, money paid by motorists will benefit them directly.

The new law mandates value pricing on two specific highways but also authorizes the OTC to implement pricing anywhere else. Since the Portland highway network is an integrated system including I-84, I-5, I-405, HW 26, HW 217, and I-205, it would be better to implement value pricing region-wide to ensure that motorists get what they want: free-flow driving conditions, at all times of the day.

Most new highways being built around the world are using electronic tolling with variable rates. The new Oregon law is an opportunity for us to learn from that experience and to implement a Portland highway pricing system that truly delivers “value” for motorists.

John A. Charles, Jr. is President and CEO of the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Wilsonville Spokesman and The Portland Tribune.

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The Case of the Missing Transit Money

By John A. Charles, Jr.

Last week the TriMet Board adopted a budget for fiscal year 2018, which begins on July 1.

As usual, the budget shows no correlation between the levels of subsidies given to TriMet and the amount of service provided to customers.

For example, in 2008, TriMet had a total of $397 million to pay for operations of bus and rail service. In 2018, the agency predicts it will have $600 million, a 51% increase. Yet bus service—which carries two-thirds of all passengers—has barely improved.

In 2008 the “revenue-miles” of bus service (those miles where buses were in operation) totaled 22,574,030. If service increases in 2018 as planned, the total is likely to be 22,597,927—only a 0.1% increase.

Where did all the money go?

TriMet claims that increased light rail service made up the difference, but between 2008 and 2016 the revenue-miles of MAX only went up 14%. No service increase in 2018 will make up the difference between 14% and 51%.

Moreover, ridership is not growing along with the increased funding. In fact it is shrinking. During 2008 the total number of “originating rides” (which excludes transfers) was 77.6 million. Ridership peaked in 2012 at 80 million, and then dropped to 77.2 million in 2016.

TriMet is also losing market share, especially at peak hours. According to the Portland city auditor, in 2008 an estimated 15% of all Portland commuters used TriMet. By 2016, that had dropped to just 10%.

The steady rise in TriMet’s revenue is almost entirely due to tax subsidies, not passenger fares. In fact, next year passenger fares will only account for 10% of TriMet’s all-funds budget—likely the lowest level of passenger support in TriMet history.

Nonetheless, the Oregon legislature is considering a bill that would authorize a new, statewide employer tax that would generate even more subsidies for transit. The Portland experience shows that this is a bad idea. The more we subsidize monopoly transit, the more the employees divert funds for their own use.

Last year TriMet spent $1.23 on employee benefits for every $1.00 expended in wages. That largely explains why service levels have been stagnant.

In 1969 the Portland City Council put Rose City Transit out of business because Councilors believed that a government-run monopoly would be much more efficient than a private-for-profit company. The TriMet experience has shown that the City Council was wrong.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

 

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Oregon Politicians Support Better Roads, Just Not Here

By John A. Charles, Jr.

Recently the Oregon Legislature held a hearing on HB 3231, a bill promoted by Rep. Rich Vial (R-Scholls) that would authorize the formation of special districts for the purpose of constructing and operating limited-access highways.

Opponents made many of the same arguments they’ve been using for decades: new highways threaten farmland; increased driving will undermine Oregon’s “climate change” goals; and we can’t “build our way out of congestion.”

Perhaps the most comical opposition argument was made by Marion County, which sent all three of its Commissioners in a show of force. The Commission Chair concluded his remarks by saying, “We understand progress; we just want that progress to go somewhere else.”

Oregon stopped building new highways in 1983 after I-205 was completed. Elected officials came to believe that our needs for mobility could be met through increased urban densities, massive subsidies for public transit, and various forms of “demand management” to entice or even force people out of their cars.

The new approach didn’t work.

It turns out that manipulating urban form through land-use controls has very little influence on driving. Sure, you can regulate suburbia out of existence through density mandates, as Metro is doing. You can also reduce the parking supply and bring light rail right to someone’s front door.

But no matter how much some people fantasize about using alternatives to cars, it’s not very practical. Midday meetings, post-work errands, childcare obligations, and countless other demands lead people to rationally opt for driving for most trips.

That’s why, after a 20-year spending binge of $3.67 billion for new rail lines, TriMet’s share of daily commuting in Portland actually dropped from 12% in 1997 to 10% in 2016.

Auto-mobility is a wonderful thing, and there is no reason to feel guilty about new roads. For one thing, driving is strongly associated with economic growth. According to ODOT, for every job created in Oregon, we can expect an additional 15,500 miles of auto travel each year. If you’re in favor of new job creation, you have to accept increased driving as a logical consequence.

Moreover, the emissions associated with driving are now so minor that the real concern should be reducing air pollution from congestion. Vehicles sitting in gridlock have per-mile emissions of infinity; getting those vehicles into free-flowing conditions will improve local air quality.

Autos generally have the lowest emission rates when traveling at steady speeds of around 50 MPH. This is also a driving speed that makes most drivers happy, especially at rush hour. The way to accomplish both goals is through the construction of new highways when needed, coupled with the use of variable toll rates (also known as “dynamic pricing”). This could happen under HB 3231.

Across the country, dozens of impressive new highways are being built, many with private financing. Dynamic pricing is being be used to pay off bonds and eliminate congestion. This is the progress that most commuters dream about.

Unfortunately, it probably won’t happen here. Oregon politicians only support progress somewhere else.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in the Portland Tribune on April 25, 2017.

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Let’s Build Some Highways

By John A. Charles, Jr.

Oregon stopped building new highways in 1983 when I-205 was completed. Top planning officials began espousing a philosophy of spending money on rail transit rather than roads. The government also used the power of zoning to crowd more people into urban centers, in the belief that high density would lead to less reliance on cars.

The new strategy failed.

The Portland regional transit agency, TriMet, was given more than $3.6 billion to build a light rail system; yet between 1997 and 2016, TriMet’s market share of all commute trips in Portland fell from 12% to 10%. As a result, traffic congestion has become a major barrier to regional mobility.

Now a bipartisan group of legislators, led by Republican Rich Vial of Wilsonville and Democrat Brian Clem of Salem, has introduced a bill that would jump-start the highway-building process. HB 3231 would authorize cities and counties to jointly form special districts for the purpose of building and operating limited-access public highways.

If built, such highways would likely be financed through loans, with debt service paid off by tolls.

So far HB 3231 has not received a public hearing. It should. Motorists deserve all the highways they are willing to pay for. Let’s give them a chance to vote with their dollars for a better road system.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Portland’s Regional Transit Strategy Is Not Working

By John A. Charles, Jr.

The Portland Auditor released the 2016 Annual Community Survey on November 30. The responses show that the share of all commute trips taken by public transit fell 17% during the past year.

This was part of a longer-term decline in transit use. The transit share of all Portland commute trips peaked in 2008 at 15%. Since then it has hovered near 12%, and now rests at 10%.

Taxpayers should be especially concerned about the negative correlation between passenger rail construction and market share. In 1997, when the region had only one light rail line—the Blue line to Gresham—transit market share was 12%.

After extending the Blue line to Hillsboro and adding four new lines plus the WES commuter rail and the Portland Streetcar, transit market share is only 10%.

Travel Mode Share for Weekday Commuting

Portland citywide, 1997-2016

Mode 1997 2000 2004 2008 2010 2012 2014 2015 2016
                   
SOV 71% 69% 72% 65% 62% 61% 63% 60% 61%
Carpool 9% 9% 8% 8% 7% 6% 6% 5% 6%
Transit 12% 14% 13% 15% 12% 12% 11% 12% 10%
Bike 3% 3% 4% 8% 7% 7% 8% 7% 8%
Walk 5% 5% 3% 4% 6% 7% 8% 9% 9%
Other n/a n/a n/a n/a 7% 6% 6% 7% 7%

      Source: Portland Auditor, Annual Community Survey

The numbers cited above are for citywide travel patterns. When broken out by sector, the Auditor found that just 5% of all commuters in Southwest Portland took transit to work in 2016. Despite this lack of interest by commuters, TriMet and Metro are working to gain approval for another light rail line extension from Portland State University through SW Portland to Bridgeport Village. The likely construction cost will be around $2.4 billion.

Unfortunately, there is no empirical basis for thinking that cannibalizing current bus service with costly new trains would have any measurable effect on transit use.

Transit advocates like to claim that we simply need to spend more money to boost ridership, but we’ve already tried that. TriMet’s annual operating budget went up from $212.2 million in 1998 to $542.2 million in 2016. After adjusting for inflation, that’s an increase of 72%. Those increases were on top of construction costs for rail, which cumulatively exceeded $3.6 billion during that era.

It’s time to stop the myth-making and start holding public officials accountable for a plan that isn’t working.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Policy Picnic – October 26, 2016

Please join us for our monthly Policy Picnic led by

Cascade’s President and CEO, John A. Charles, Jr.


Watch Your Wallet November 8! Why You Should Vote No on Tigard Light Rail and Metro’s Open Space Levy

Metro is asking for a new tax levy despite the fact that it already has sufficient funds to operate all its parks. Since 1995, Metro has spent hundreds of millions of tax dollars buying up large tracts of lands far from where most people live. The Metro Council doesn’t want you (or your dog) to use most of these lands, but they do want you to pay for them. Metro’s Five-Year Operating Levy (Measure 26-178) is one more wallet-grab.

The proposed Tigard-Tualatin light rail project (Measure 34-255 in Tigard) would cost at least $240 million per mile to construct — the most expensive transit project in state history. Tigard will be required to fund part of that price tag, and increased taxes will be the result. This is what happened to the City of Milwaukie and Clackamas County when Metro forced through the Orange line.

John Charles will give you the inside story on these two ballot initiatives and tell you what their proponents don’t want you to know. He’ll explain what these measures really do and what they mean for you, your family, or your business. Bring your friends and coworkers!

Admission is free, but reservations are required due to space limitations. You are welcome to bring your own lunch; light refreshments will be served.

 

Cascade’s Policy Picnics are generously sponsored

by Dumas Law Group, LLC. 

Dumas Law Group
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MAX at 30: Portland Transit Needs a New Plan

September 5 marked the official 30th anniversary of the opening of TriMet’s light rail system. Like many Portland residents, I took a free ride that day and felt that this was a big step forward for transit service.

Unfortunately, actual performance never lived up to the hype. My hopes for “high-speed” transit were dashed when I discovered how many stops there were. The average train speed today is only 18 MPH.

My expectation that MAX would include five or six train cars was also incorrect. There are only two cars per train on MAX, and there will never be more than two cars because Portland has 200-foot blocks in downtown. Longer trains would block busy intersections.

The cost of construction also spiraled out of control. The Orange line to Milwaukie cost $210 million per mile, making it hundreds of times more costly than simple bus improvements.

In short, MAX is a low-speed, low-capacity, high-cost system, when what we really need is just the opposite—a higher-speed, higher-capacity, low-cost system.

Regional leaders should pull the plug on any more rail and start focusing on the future of transit, which will feature driverless vehicles, door-to-door delivery, and private car-sharing services such as Uber Technologies.

The passenger rail era died a hundred years ago. It’s time for Portland to get into the 21st century.

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TriMet’s Edifice Complex

Recently TriMet announced that after two years of planning for an expensive new “bus rapid transit” line from Gresham to Portland, the new service would actually take 8-11 minutes longer than current buses.

Over in Southwest Portland, TriMet is planning a $2 billion light rail line to Bridgeport Village near Tualatin, a suburban shopping mall.

Agency planners are fascinated with shiny new objects, but most riders don’t benefit. For example, between 2000 and 2015, TriMet opened five new rail lines, but the total vehicle-miles of daily transit service actually dropped by 5%.

It’s time to admit that TriMet’s basic business model is becoming obsolete. The agency is a sluggish monopoly that takes years to bring new service to market, while customers live in a smartphone world where they have millions of choices and same-day delivery.

In particular, the coming era of driverless vehicles will create entirely new businesses that will free riders from the tyranny of fixed-route transit service. Legacy systems such as TriMet will be stuck with a vast network of aging infrastructure that will be too expensive to maintain.

We don’t need another light rail line to Bridgeport, or a bus rapid transit line to Gresham. What we need is new vision of mobility in Portland.

(revised 4/6/16)

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Broken Promises: The Real Trends in TriMet’s Transit Performance (2004-2015)

TriMet’s ridership is declining and its level of fixed-route service is lower today than it was in 2004. According to mainstream transit advocates, the solution is to spend more public money.

The problem is we’ve already tried that, and it’s not working. TriMet has been imposing a regional payroll tax on most employers since 1972. The rate was initially 0.30%, then grew to 0.60% by 1979. During the 2003 legislative session, TriMet sought approval to raise it by another tenth of a percent. According to TriMet General Manager Fred Hansen, “TriMet’s proposed payroll tax increase will be used exclusively to provide new or enhanced transit service. This will include assisting in the operation of Washington County Commuter Rail, Clackamas County light rail, Lake Oswego Streetcar, increasing Frequent Service routes, and enhanced local service connections to these lines.”

The rate increase was approved, and was phased in over a 10-year period, beginning January 2005.

During the 2009 legislative session, TriMet lobbied for another rate increase, phased in over 10 years. The new rate of 0.7337% went into effect on January 1, 2016.

Now that we have more than a decade of experience with payroll tax rate increases, it is informative to compare revenue trends with service trends. The results show that there is no correlation between revenue and service.

 

 

TriMet Financial Resource Trends for Operations

2004-2015

 (000s) 

2004 2006 2008 2010 2012 2014 2015 % change
Passenger fares $55,665 $68,464 $80,818 $93,729 $102,240 $114,618 $116,734 +110%
Tax revenue $155,705 $192,450 $215,133 $208,933 $248,384 $275,357 $292,077 +88%
Total operations $290,513 $342,274 $404,481 $433,609 $488,360 $522,155 $493,572* +70%

 

*Grant revenue in 2015 dropped by $41,876 due to timing of receipt; those funds will appear in TriMet’s 2016 income statement.

 

VIEW TABLE IN PDF HERE

 

In fact, there is negative correlation – as TriMet’s revenue went up over the course of a decade, actual service went down. 

 

Annual Fixed Route Service and Ridership Trends for TriMet

2004-2015 

2004 2006 2008 2010 2012 2014 2015 % change
 
Hours of service 1,698,492 1,653,180 1,712,724 1,682,180 1,561,242 1,608,090 1,676,826 -1.3%
Miles of service 27,548,927 26,830,124 26,448,873 25,781,480 23,625,960 23,763,420 24,248,910 -12%
Originating rides 71,284,800 74,947,200 77,582,400 77,769,119 80,042,810 75,779,560 77,260,430 +8.4

 

Source: TriMet, http://www.trimet.org/pdfs/publications/trimetridership.pdf 

VIEW TABLE IN PDF HERE

 

There is a slight correlation between revenue and transit use, as total originating rides went up 8% while operating revenue went up 70%. However, ridership peaked in 2012 and has dropped by 3.5% since then.

It is also interesting to compare revenue trends with TriMet’s share of commute trips. The Portland Auditor has conducted an annual “community survey” since 1997, and those surveys measure travel choices by Portland residents. The results show that TriMet’s market share of commuting has remained exactly the same since 1997, despite (or because of) massive expenditures on rail transit during that period. 

 

Travel Mode Share for Weekday Commuting

Portland citywide, 1997-2015 

Mode 1997 2000 2004 2008 2010 2012 2013 2014 2015
                   
SOV 71% 69% 72% 65% 62% 61% 64% 63% 60%
Carpool 9% 9% 8% 8% 7% 6% 6% 6% 5%
Transit 12% 14% 13% 15% 12% 12% 10% 11% 12%
Bike 3% 3% 4% 8% 7% 7% 7% 8% 9%
Walk 5% 5% 3% 4% 6% 7% 7% 8% 8%
Other n/a n/a n/a n/a 7% 6% 6% 6% 7%

VIEW TABLE IN PDF HERE

Notwithstanding the obvious drop in service, TriMet claims that the legislative promise was met because new rail lines were opened. But to the 66% of TriMet riders who saw their bus service drop by 12%, shiny new rail lines were of little consolation.

The chief enablers of TriMet’s tax addiction have been Portland-area business associations, including Portland Business Alliance, Westside Economic Alliance, Oregon Business Association, and the Central Eastside Industrial Council. Those groups repeatedly embraced higher taxes for their members on the premise that more transit revenue equaled more transit service. That premise is clearly false.

When the TriMet Board meets to increase the tax rate again in September, Portland business groups should reconsider their automatic support. Unless and until TriMet service levels reach those of 2004, there is no reason to continue “throwing money” at an underperforming monopoly.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Failed Promises: Why the Legislature Should Reject TriMet’s Request for New Spending Authority

TriMet is currently seeking new spending authority in SB 1510 to help finance regional “multi-modal” transportation projects. Legislators should deny this request based on previous experience with TriMet commitments.

To refresh the memory: during the 2003 session, TriMet sought approval to increase the payroll tax rate by one-tenth of a percent. According to TriMet’s then-General Manager,

“TriMet’s proposed payroll tax increase will be used exclusively to provide new or enhanced transit service. This will include assisting in the operation of Washington County Commuter Rail, Clackamas County light rail, Lake Oswego Streetcar, a substantial increase in Frequent Service routes, and enhanced local connections to these lines.”[1]

The rate increase was approved, and was phased in over a 10-year period.

During the 2009 legislative session, TriMet sought an additional rate increase. The legislature again approved the request. The TriMet board approved the first of 10 planned rate increases last September, and the new rate of 0.7337% went into effect on January 1, 2016.

Let’s look at the results. After a decade of tax increases, it’s clear that there is no correlation between increased TriMet revenue and actual levels of service: 

TriMet Financial Resource Trends for Operations, 2004-2015

 (000s)

CLICK HERE TO VIEW TABLE IN PDF 

2004 2006 2008 2010 2012 2014 2015 % change
Passenger fares $55,665 $68,464 $80,818 $93,729 $102,240 $114,618 $116,734 +110%
Tax revenue $155,705 $192,450 $215,133 $208,933 $248,384 $275,357 $292,077 +88%
Total operations $290,513 $342,274 $404,481 $433,609 $488,360 $522,155 $493,572 +70%

 

In fact, there is negative correlation – as TriMet’s revenue went up over the course of a decade, actual service went down: 

Annual Fixed Route Service and Ridership Trends for TriMet

2004-2015

CLICK HERE TO VIEW TABLE IN PDF 

2004 2006 2008 2010 2012 2014 2015 % change
 
Hours of service 1,698,492 1,653,180 1,712,724 1,682,180 1,561,242 1,608,090 1,676,826 -1.3%
Miles of service 27,548,927 26,830,124 26,448,873 25,781,480 23,625,960 23,763,420 24,248,910 -12%
Originating rides 71,284,800 74,947,200 77,582,400 77,769,119 80,042,810 75,779,560 77,260,430 +8.4%

 Note: The term “originating rides” excludes transfers.

Source: TriMet, http://www.trimet.org/pdfs/publications/trimetridership.pdf 

There is a slight correlation between revenue and transit use, as total originating rides went up 8% while operating revenue went up 70%. However, ridership peaked in 2012 and has dropped by 3.5% since then.

TriMet claims that the 2003 promise of “enhanced service” was met because many new rail lines were built. But to the 66% of TriMet riders who travel by bus and saw their service drop by 12%, shiny new rail lines were of little consolation.

TriMet now wants to expand its reach through SB 1510 so as to spend new funds for “multi-modal” projects. We suggest a simple response: unless and until TriMet transit service returns to at least 2004 levels, no additional spending authority should be granted.

[1] Fred Hansen, testimony before the Senate Revenue Committee on SB 549, March 11, 2003, p. 3.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. 

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What Can Be Learned from Portland’s Smart Growth Experience?

The annual “New Partners for Smart Growth” conference opens in Portland on Thursday, February 11. “Smart Growth” refers to an amorphous planning theory favoring (or requiring) high urban densities, mixed-use development, and non-auto travel.

Given Portland’s status as the Mecca for this philosophy, it’s likely that the conference will be a love fest of planners, activists, and consultants celebrating the “Portland story.” Unfortunately, the reality of Smart Growth is a lot less glamorous than the PowerPoint slides.

For example, Portland has been a leader in light rail construction for over 30 years, but it hasn’t changed how people travel. According to the Portland City Auditor, in 1997 – when Portland had only one light rail line terminating in Gresham – 12% of Portland commuters took transit.

In 2015, transit use was still only 12% of commuter travel, despite (or because of) a multi-billion rail construction campaign that added a streetcar loop, a new commuter rail line, and five new light rail lines. During that era bus service was reduced by 14%, and buses still account for two-thirds of daily riders.

On the land-use front, planners have succeeded in their goal of densifying the region; but there was collateral damage. Due to density regulations, buildable land is now scarce, driving up the cost of housing. This is incentivizing many property owners to tear down nice homes and replace them with out-of-scale apartment buildings – many with no off-street parking. Some Portland Progressives who supported this planning agenda now wonder why their formerly pleasant neighborhoods are flooded with automobiles.

In the suburbs, most new projects simply have no backyards. It’s hard to remember now, but in 1995, the average lot size for a new home in Washington County was 15,000 square feet. This provided plenty of room for kids.

Those days are over. In the new “South Hillsboro” development, which will be built out over the next decade, most dwellings will be attached units on tiny lots. The larger parcels – averaging only 7,000 square feet – are being marketed as lots for “executive housing.”

Nice backyards that were once common are now only available to the rich, due to the artificial scarcity of land that Smart Growth calls for.

The Portland conference will feature trips to “transit-oriented developments” (TODs) like Orenco Station in Hillsboro. Orenco features a housing project with passive solar design along with urban-scale density near light rail, but both elements required large public subsidies. It would be difficult to replicate those projects elsewhere.

Perhaps the most disappointing fact about regional planning in Portland is that very little effort is being made to learn from the experience. Since 2008, at least four audit reports by the Metro Auditor have criticized agency planners for this failure.

In the 2010 report, the Auditor found that “Metro’s processes to plan transportation projects in the region were linear when they should have been circular. After a plan was adopted, the update process began anew with little or no reflection about the effectiveness of the previous plan or the results of the performance measures they contained.”

It’s clear that this was not an accident; it was by design. As the Auditor noted, “systems to collect data and measure progress towards these outcomes were not in place.”

No measurement means no accountability. That’s not a smart way to plan a region.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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The Futility of Public Hearings

Over the past four years, TriMet and Metro have been planning something called the SW Corridor Project. Metro describes it as a multi-modal project featuring new transit capacity, local street improvements, and enhancements to trails, sidewalks, and bike lanes. The project will begin at Portland State, travel along Barbur Boulevard, and terminate somewhere near Tualatin.

The exact nature of the transit element has never been disclosed; ostensibly, the choice is between light rail and bus-rapid transit. The Project Steering Committee insists that final decisions on the technology, route, terminus, and financial plan are still open for discussion, with some preliminary decisions scheduled for 2016.

Curiously, however, at the November 11 TriMet Board of Directors planning retreat, the Board was informed (at 3:17:05) by project staff that opening day for the project has already been set: September 12, 2025.

How is it that TriMet already knows the exact day that operations will commence, if it doesn’t even know any of the particulars – including a proposed, $250 million tunnel to PCC-Sylvania that would only be built if light rail is chosen?

Apparently, all decisions have actually been made, and future public hearings will be just as fake as the past ones.

All aboard for light rail to Bridgeport Village. Only 3,581 days till the opening ceremony!

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

 

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Transit Policy: Kryptonite for Business Leaders

By John A. Charles, Jr.

During September, the Portland regional transit monopoly, TriMet, voted to raise the payroll tax rate by 1/10th of a percent, beginning January 2016. The rate increase will be phased in over a ten-year period, as required by the state legislature.

Politically, the only reason TriMet was able to do this was that none of the major business associations objected. The question is, “why?”

A number of issues should have raised red flags for business representatives. First, the payroll tax pays for more than half the cost of all transit operations. That ratio seems far out of balance. The primary beneficiaries of transit are transit riders, yet they only pay about 24% of operations cost. It would seem far more equitable to insist that passenger fares pay for at least 50% of the operational cost.

Second, there is no reason for businesses to pay more if TriMet is unwilling to impose discipline on the expenditure side. The transit district has failed miserably to do this for decades. TriMet has approved so many lucrative labor contracts that the total cost of benefits now routinely exceeds the cost of wages. In FY 2014, the ratio was $1.49 in benefits for every $1.00 in wages; in FY 2015, it was $1.19. It’s hard to imagine any private sector company paying that much in total benefits.

And third, TriMet has repeatedly broken promises about how it would spend new payroll tax money. In 2003, when the Legislature approved an earlier tax rate increase, TriMet promised that every penny of new tax revenue would be used for “new service.” Yet over the subsequent decade of tax rate increases – 2004-2014 – TriMet’s total annual operational revenue increased by 80%, while miles of actual transit service declined by nearly 14%, as shown below: 

TriMet Financial Resource Trends

 (000s) 

  2004 2006 2008 2010 2012 2014 % change
Passenger fares $ 55,665 $ 68,464 $ 80,818 $ 93,729 $ 102,240 $ 114,618 +106%
Tax revenue $ 155,705 $ 192,450 $ 215,133 $ 208,933 $ 248,384 $ 275,357 +77%
Total op. resources $ 290,513 $ 342,274 $ 404,481 $ 433,609 $ 488,360 $ 522,155 +80%

  

Annual Fixed Route Revenue Service Trends 

  2004 2006 2008 2010 2012 2014 % chng.
Hours of service 1,698,492 1,653,180 1,712,724 1,682,180 1,561,242 1,608,090 -5.3%
Miles of  service 27,548,927 26,830,124 26,448,873 25,781,480 23,625,960 23,763,420 -13.7%

TriMet claims that service actually increased during this period because several new rail lines were built, and rail cars are bigger than buses. But that is a fallacy. Most transit vehicles are under-utilized most of the time, so seating “capacity” is rarely important.

When bus service was cut throughout the 525-square mile district by 14% over the past decade, the thousands of riders who were inconvenienced were not made better off just because a few new trains were operating in narrow corridors somewhere else. They were made worse off, and may have stopped riding transit altogether as a result.

In fact, transit has lost market share over the past 17 years despite (or because of) the rail building boom. According to the Annual Community Surveys conducted by the Portland Auditor, the transit share of commute travel was 12% in 1997, when TriMet had only one light rail line. By 2014, it had dropped to 11%.

 

Travel Mode Share for Weekday Commuting

Portland citywide, 1997-2014 

Mode 1997 2000 2004 2008 2010 2011 2012 2013 2014
               

 

 
SOV 71% 69% 72% 65% 62% 63% 61% 64% 63%
Carpool 9% 9% 8% 8% 7% 6% 6% 6% 6%
Transit 12% 14% 13% 15% 12% 12% 12% 10% 11%
Bike 3% 3% 4% 8% 7% 7% 7% 7% 8%
Walk 5% 5% 3% 4% 6% 6% 7% 7% 8%
Other n/a n/a n/a n/a 7% 6% 6% 6% 6%

             Source: Portland Auditor

Transit policy tends to make otherwise rational business leaders do silly things. Instead of defending themselves and demanding that public transit districts operate more efficiently, they feel obliged to “take one (more) for the team.” But this simply enables the dysfunctional behavior by transit districts to continue.

The fact is, public sector monopolies and their unionized employees will take every dollar available for themselves as long as someone keeps putting new dollars on the table.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. This article originally appeared in the September 2015 edition of the newsletter, “Oregon Transformation: Ideas for Growth and Change.”

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Mysteries of Tilikum Crossing

Portland’s newest bridge over the Willamette River, Tilikum Crossing, has a few puzzling design features. Apparently, a barrier down the middle of the bridge means that a stalled light rail train or bus would shut down transportation until it was removed, because no vehicle could go around it.

If the bridge is only open to trains, buses, cyclists, and pedestrians, what useful purpose does the barrier serve? (Other than potential MAX and TriMet bus line rush hour chaos, that is.)

And that’s not all….

Syndicated radio host Lars Larson interviewed Cascade’s John Charles on Monday. Click on the Listen link to hear John reveal his observations from Portland’s South Waterfront during Tilikum Crossing’s opening week.

You might be surprised by what he saw bicyclists doing on SW Moody Avenue.

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Policy Picnic – October 28, 2015


Please join us for our monthly Policy Picnic led by Cascade President and CEO John A. Charles, Jr.


Topic: Portland-Milwaukie Light Rail: Comparing Promises with Reality 

Description: TriMet’s newest MAX line opened on September 12. At $210 million per mile, this was the most expensive light rail line in Portland history. Now that it’s open, is it making the traveling public better off?

In this seminar, we revisit the Utopian predictions made by transit planners in 2008, and measure those against the early performance of the line.

There is no charge for this event, but reservations are required as space is limited.  To reserve your free tickets, click here.

Admission is free. Please feel free to bring your own lunch.
Coffee and cookies will be served. 
 
Sponsored by:
Dumas Law Group
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Tilikum Crossing: More Punishment for Motorists

The new bridge over the Willamette River, TriMet’s Tilikum Crossing, opened for business on Saturday. With beautiful weather and parties at every stop of the Orange MAX line, a good time was had by the thousands of sightseers.

Unfortunately, now that we’ve returned to gray skies and normal weekday travel, it’s clear that the bridge created both winners and losers. The big winners are light rail passengers and bicyclists. The scenic bikeway has already proven immensely popular with local cyclists, who are crossing at a rate 10 times higher than the rate previously observed on the nearby Ross Island Bridge.

The big losers are motorists. The Tilikum Crossing is closed to autos and trucks. In addition, the new traffic signal at the west end of the bridge creates a major bottleneck on SW Moody Avenue, the busiest road within the district.

At both morning and afternoon peak-periods, Moody Avenue traffic is shut down 60% of the time in order to accommodate light rail, the streetcar, and buses leaving or entering the bridge. This gums up all north-south travel, including most of the same bike riders cruising over from east Portland, who must cross Moody Avenue as they exit the bridge.

Moody Avenue motorists have no choice but to wait through red lights that sometime exceed three minutes; but pedestrians and cyclists are rebelling by the hundreds. After losing patience, they simply cross the rail tracks illegally.

In most normal cities, a new bridge makes everyone better off. But in Portland, a bridge simply becomes one more weapon in the political war on mobility.

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The Extinction of Public Transit

By Emma Newman

Uber and Lyft have recently gained over 50 percent of the taxi market in Portland. This is especially notable as Portland was initially hostile to ridesharing companies, to the point of filing a lawsuit against Uber late last year. This industry takeover is just one example of how private market innovation has upended government-regulated transit.

At a recent Metro hearing on the SW Corridor project, one of the main arguments for pursuing a costly light rail tunnel requiring the destruction of several homes was that ten years of disruption is worth 100 years of use. But considering the speed at which the transportation industry is changing, is long-term use of public transit infrastructure likely?

Public transit is rarely anyone’s first choice due to inconvenience, time cost, and lack of reliability—problems that personal vehicles rarely face. Overcoming these factors has made ridesharing companies more popular than traditional taxicabs.

The fact that private market solutions will increasingly outcompete public transit is evident not only with companies like Uber and Lyft, but with future technologies as well. Google’s driverless car being used on a wide scale may seem to be far into the future; but if costly transit projects are being justified by decades of potential future use, transit planners need to consider what the future of transit may actually look like.

Emma Newman is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She is a student at George Fox University, where she is studying Economics and Computer Science.

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What They Say vs. What They Do: How PCC Students Really Get to School

By Anna Mae Kersey, Emma Newman, and Thomas Tullis

TriMet is considering the construction of a light rail line from Portland State University to Tualatin, at a cost of roughly $2 billion.

One routing option still on the table is to run the train down Barbur Boulevard, then build a tunnel to the Sylvania campus of Portland Community College. The tunnel would add $244 million in capital cost. It also would require moving several dozen homes and take at least two years to build.

To put this in perspective, for the price tag of the proposed tunnel, one could purchase approximately 23,094 Teslas, build 41 aerial trams like the one at OHSU, buy two brand-new cars per PCC-Sylvania student, or pay for 117,200,000 Uber rides from the PCC Sylvania campus to downtown Portland.

Such a hefty sum might be justified if there were a need for “high-capacity” transit at PCC-Sylvania, but such a need does not exist.

According to survey data released by PCC, 58 percent of Sylvania students drive to class, while 32 percent take shuttles or buses. However, travel surveys are notoriously unreliable, in large part because people tend to underreport their reliance on auto travel.

To correct for this, Cascade Policy Institute collected field data by going to PCC-Sylvania and counting every trip to and from the campus, at various times and on various days. The field observations tell a different story. Roughly 84 percent of students drove and only 15 percent took TriMet or the PCC shuttles during our observations, which covered nearly 7,000 trips.

During final exams week, when students really had to be in class, the split was even more skewed: 89% traveled via private automobile.

The difference between what students said in a survey and how they actually traveled is significant because it shows that college students are much less willing to forego cars and take transit than is commonly thought. For TriMet, this means the proposed light rail line likely will not have the increase in ridership that planners assume.

We can also learn from experience elsewhere, because one other PCC campus has been directly served by light rail for the past five years. The PCC Willow Creek campus is a single building located directly next to a light rail station on the west side. This is unlike the spread-out PCC Sylvania campus, where students would still have to walk a significant distance from the proposed light rail station to get to their classes.

Despite the convenience of light rail stopping right at the front door, at Willow Creek the field observations showed that 80 percent of students drove, 14 percent took light rail, and 5 percent took the bus. This is only a slight decrease in automobile use compared with Sylvania. Is it really worth spending $244 million to service a suburban college campus with light rail for this tiny difference?

Driving is the preferred method of travel for the majority of college commuters because it offers versatility that caters to their complicated schedules both in and out of the classroom. It seems that the complexities of student lives and lack of demand for transit are being overlooked in this decision.

PCC-Sylvania is already served by a rich mixture of college shuttles and TriMet buses. Those options are currently underutilized. Thus, there is no reason to spend $244 million and disrupt the serenity of this neighborhood to build a light rail tunnel.

Anna Mae Kersey, Emma Newman, and Thomas Tullis are research associates at Cascade Policy Institute, Oregon’s free market think tank.

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TriMet’s Great Disappearing Act

During the 2003 session of the Oregon State Legislature, TriMet sought an increase in the regional payroll tax rate. In public testimony, TriMet General Manager Fred Hansen said, “TriMet’s proposed payroll tax increase will be used exclusively to provide new or enhanced transit service.”

The legislature approved TriMet’s request, and the payroll tax rate went up every January for ten straight years. By the end of 2014, TriMet had received $34.4 million in new payroll tax revenues attributable to rate increases. Yet during that same decade, the miles of transit service offered to patrons actually dropped by 14%, while the hours of service declined by 5%.

Like a magic show, TriMet tried to distract the audience by pointing to grand celebrations for the opening of the WES commuter rail line and the Green MAX line, both of which opened in 2009. But overall service levels were reduced five times in six years, the opposite of what was promised in 2003.

TriMet’s proposed budget for 2015-16 was released last week. It calls for “expanding service through the opening of the Portland-Milwaukie light rail line.” Once again, all the attention will be on new trains, while total service levels will still be far below the levels we had in 2003.

State legislators should be asking TriMet where all the money went. But sadly, no one in Salem cares about results.

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Scare Tactics Not Working in Road Tax Debates

The Oregon Department of Transportation (ODOT) recently issued a report describing the deteriorating condition of Oregon highways. The authors estimate that the cumulative cost to the state economy from poor roads will be $94 billion by 2035.

At the same time, the Portland City Council is considering a new local income tax to pay for road maintenance and safety, citing a lack of adequate funding.

While road maintenance is indeed a problem throughout Oregon, the public is unlikely to approve new road taxes. The primary reason is a lack of trust. During the past 15 years, Portland has squandered vast amounts of money on fads like streetcars, light rail, bioswales, and “road diets.” At the state level, ODOT spent nearly two decades and $180 million on a silly bridge-with-light-rail proposal to Vancouver, Washington that is now dead.

These projects were mostly aimed at getting people “out of their cars.” Yet the reality is, regardless of how people travel, more than 99% of all trips take place on a road. So road maintenance needs to be the top priority with existing transportation dollars.

New methods to pay for transportation infrastructure will eventually be needed, but politicians need to re-earn the public’s trust before that can happen.

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Scare Tactics Not Working in Road Tax Debates

The Oregon Department of Transportation (ODOT) recently issued a report describing the deteriorating condition of Oregon highways. The authors estimate that the cumulative cost to the state economy from poor roads will be $94 billion by 2035.

At the same time, the Portland City Council is considering a new local income tax to pay for road maintenance and safety, citing a lack of adequate funding.

While road maintenance is indeed a problem throughout Oregon, the public is unlikely to approve new road taxes. The primary reason is a lack of trust. During the past 15 years, Portland has squandered vast amounts of money on fads like streetcars, light rail, bioswales, and “road diets.” At the state level, ODOT spent nearly two decades and $180 million on a silly bridge-with-light-rail proposal to Vancouver, Washington that is now dead.

These projects were mostly aimed at getting people “out of their cars.” Yet the reality is, regardless of how people travel, more than 99% of all trips take place on a road. So road maintenance needs to be the top priority with existing transportation dollars.

New methods to pay for transportation infrastructure will eventually be needed, but politicians need to re-earn the public’s trust before that can happen.

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Should Portland Residents Pay Another Fee to Cover Basic Road Maintenance?

Portland Mayor Charlie Hales is proposing a new transportation tax for 2015. He claims this is needed to offset a decline in revenue.

However, the facts show a different story. Total revenue for transportation has been growing for decades. For example, from 1996-2007, Portland transportation revenue grew by 60%. According to the city auditor, that was the largest increase among all city agencies during that period.

Portland’s general fund has also been flush. Between 2003 and 2012, the amount of annual tax revenue the city received from each Portland resident increased from $2,292 to $2,656. Total property taxes grew by 27% during that time.

Despite all this money, the city’s streets are poorly maintained. The problem is that local politicians have preferred to spend vast amounts on frivolous toys like the eastside streetcar and Milwaukie light rail, rather than taking care of basic maintenance. As a result, transportation debt service has increased from 10% of discretionary spending to 20% in just the past four years. The charge card is getting maxed out.

Instead of demanding more tax dollars for shiny new objects, the City Council should maintain and improve the basic road network. If this task is too difficult, taxpayers should ask why we bother to have a city government at all.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Testimony to TriMet Board on Resolution 14-01-03

Cascade President John A. Charles, Jr. submitted the following testimony to the TriMet Board on January 21, 2014.

 

To the TriMet Board:

In Resolution 14-01-03, TriMet staff proposes to give away a land parcel valued at $570,000 to a developer on the grounds that the net present value of 30 years of increased transit fares generated by the development is estimated to be $648,732.

The staff has neglected to mention that $648,732 is the gross revenue associated with future boardings. Since TriMet loses money on every trip, the net value of future fares will be a negative number.

For example, the operations cost/boarding for light rail in FY 14 has averaged $1.87. The average originating fare for TriMet fixed route service is $1.47.

Last year all passenger revenue totaled $152,698,000 while operating expenses were $580,289,000, a 26% recovery ratio. So it doesn’t matter what assumptions you use about 30-year discount rates, rental occupancy rates, or rail usage by TOD residents; under all scenarios, TriMet loses substantial amounts of money servicing the proposed project. Therefore there is no “profit” to subsidize the $570,000  giveaway of a public asset.

Moreover, FTA has had a long-standing policy prohibiting such transactions, as noted in the following guidance document:

“Thus, locally preferred Plans for highest and best transit use may be acceptable even if they do not generate the highest possible level of financial return, although the transit system is expected to realize some financial return (i.e., not transfer the property for $1) in a development.”  (Innovative Financing Techniques for America’s Transit Systems, FTA, September 1998, p. 45, http://libraryarchives.metro.net/DPGTL/publications/1998_innovative_financing_techniques_americas_transit_system.pdf).

Elsewhere in the same document, FTA discusses exactly the type of Portland situation contemplated with the SE 17th Street proposal, and declares it impermissible:

“In one property, the highest and best use was considered to be a 9-unit, median income townhouse condominium, with built-in parking for all units. The metropolitan planning organization, Metro, had calculated that social, economic and environmental benefits in that area would be maximized by a rental apartment development, for low-to-moderate income residents, with structured parking for 40 percent of units. Developers maintained that, while the Metro plan could eventually prove economically viable, the current market would not support the higher density plan. The risk of substantial non-payments of rent, and resulting default on project financing, was considered too high. Thus, the value of the land would have to be reduced to reflect this risk. In discussions with Metro, FTA indicated that while the price of the land was to some degree negotiable, FTA would not accept a zero or negative valuation of property to make the project feasible.” 

Other subsidies: In the staff memo, it is also stated that TriMet has agreed to “assistance with permitting fees” for the developer. What, exactly, does this mean? Is TriMet proposing to subsidize the soft costs of development, and if so, why?

Alternative uses: The proposed land giveaway should be rejected and alternative uses considered. TriMet staff recommends against using the parcel as a parking lot, but offers no analysis. In fact, light rail depends on park-and-rides to attract riders and most TriMet parking lots exist to service light rail. If you don’t provide parking at this station, out-of-district riders will simply invade nearby residential neighborhoods, creating a nuisance.

Sincerely,

John A. Charles, Jr.

Cascade Policy Institute

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As TriMet Sinks, Should Portland Suburbs Go Down With the Ship?

Last week Cascade released a report encouraging cities and counties to consider leaving TriMet due to its financial mismanagement.

TriMet has long admitted that its labor costs are unsustainable. In addition, the agency’s addiction to costly rail construction has cannibalized bus service, which has been cut by 14% in the past five years.

Comparison with other local transit districts paints a stark picture. The cost per mile of operation for the TriMet commuter rail line is $43.74. TriMet’s flagship service, light rail, costs $11.96 per mile. Yet, the small city of Sandy runs its own bus service for $2.57 per mile.

TriMet predicts that additional service cuts will be required by 2017 and every year thereafter to balance the budget, which essentially would shut down the agency by 2025. TriMet’s only strategy has been to seek contract concessions from the bargaining unit representing most workers, but this is unlikely to succeed. The ongoing PERS crisis shows that once management agrees to expensive fringe benefits for unionized workers, it’s almost impossible to reduce them later.

TriMet is in a death spiral of its own making. Local jurisdictions might be hoping for the best, but they should plan for the worst. Leaving TriMet is an option that needs to be on the table.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. 

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$52 Million Retrofit Makes Traffic Worse in Portland’s South Waterfront

A case study released by Cascade Policy Institute shows the $52 million retrofit of Portland’s Southwest Moody Avenue is already increasing local traffic congestion and will be unable to accommodate future road capacity needs in the future.

SW Moody Avenue was raised 14 feet and the overall right-of-way widened to 75 feet. This was to accommodate double-tracking of the Portland streetcar, pedestrian walkways on either side, and a massive two-way bicycle track. The primary purpose was to allow the Portland-Milwaukie light rail line to pass over Moody Avenue at-grade and stop at the OHSU Collaborative Life Sciences Building.

Before-and-after traffic counts conducted by Cascade Policy Institute on Moody Avenue show the percentage of all trips by automobile has increased since the retrofit was completed, despite the generous right-of-way allocated to non-motorized travelers.

According to Cascade President John A. Charles, Jr., “The South Waterfront has long been a Potemkin Village for Portland planners. It…will soon be served by an aerial tram, streetcar, light rail, elevated pedestrian walkway, a monster cycle track, and a 100-foot wide pedestrian greenway. But the actual evidence shows that the district is highly reliant on auto use, and the reliance is growing. Now it’s too late to provide road capacity for future build-out because so much space was allocated to the streetcar and light rail.”

To read the full report on Portland’s Moody Avenue retrofit, visit cascadepolicy.org.

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Report Shows $52 Million Street Project Makes Traffic Worse

case study released today by Cascade Policy Institute shows that the $52 million retrofit to Portland’s Southwest Moody Avenue is already increasing local traffic congestion and will be unable to accommodate future road capacity needs for the South Waterfront district in the future.

During 2011-12 SW Moody Avenue was raised 14 feet and the overall right-of-way (ROW) widened to 75 feet. This was done to accommodate double-tracking of the Portland streetcar, pedestrian walkways on either side, a massive two-way bicycle track, storm water treatment planters, and relocated utilities. The primary purpose of the retrofit was to allow the Portland-Milwaukie light rail line to pass over Moody Avenue at-grade and stop at the OHSU Collaborative Life Sciences Building, currently under construction.

The retrofit reduced lane capacity on Moody for motor vehicles by moving the streetcar directly onto the road (it had previously run on adjacent ROW) and adding a double-track, despite the fact that motor vehicles are the dominant mode of travel in the district. Before-and-after traffic counts conducted by Cascade Policy Institute on Moody Avenue show that the percentage of all trips by automobile has increased since the retrofit was completed, despite the generous ROW allocated to non-motorized travelers.

To make matters worse, in September 2013 the entire road was shut down for three weeks and much of the new work torn up so that the light rail tracks could cross at grade just west of the new Willamette River rail bridge. Since accommodating light rail was the primary purpose of raising Moody in the first place, this additional retrofit simply wasted tax dollars and inconvenienced local travelers. Neither the City of Portland nor TriMet has provided a credible public explanation of why this was done.

According to Cascade President John A. Charles, Jr., “The South Waterfront has long been a Potemkin Village for Portland planners. It’s likely the only neighborhood in the world that will soon be served by an aerial tram, streetcar, light rail, elevated pedestrian walkway, a monster cycle track, and a 100-foot wide pedestrian greenway. But the actual evidence shows that the district is highly reliant on auto use, and the reliance is growing. Now it’s too late to provide road capacity for future build-out because so much space was allocated to the streetcar and light rail.”

Click here to read the report.

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TriMet Violates Clean Air Act While “Regulators” Stay Silent

In previous decades the Portland region failed to meet national air quality standards for carbon monoxide pollution and was designated a “non-attainment” area under the federal Clean Air Act. As a result, the region was required to develop and implement strategies to reduce carbon monoxide.

One of the strategies is that TriMet must increase transit service by 1% annually for the period 2006-2017, on the premise that more transit service will reduce auto-related carbon monoxide emissions. TriMet’s compliance must be measured on the basis of a 5-year “rolling average” of actual hours of service. The “baseline year” for compliance is 2004 and includes the opening of the Yellow MAX line, which began operating that year. This strategy was specifically devised by TriMet to grandfather in the Yellow line, thus giving the agency the best chance for compliance.

However, even with this advantage, TriMet has not met the obligation to increase service. In fact, TriMet service has been steadily decreasing. This is a potential problem not only for TriMet, but for other local governments. If the Portland region were to be found out of compliance with the Clean Air Act, the federal government could delay or cancel federal dollars for such projects as Milwaukie light rail and the Columbia River Crossing. For regional politicians, this would be a disaster.

In January, the crisis was taken up by one of the obscure committees run by Metro―the Transportation Policy Advisory Committee (TPAC), comprised mostly of local government bureaucrats. TPAC agreed to recommend that compliance be measured on the basis of cumulative average of service hours for the 10-year period 2007-2017. The new “baseline year” would become 2008.

After TPAC, the plan had to be approved by the Oregon Environmental Quality Commission (EQC), the governing board for the state DEQ. The EQC took testimony in August and rubber-stamped the TPAC recommendation in early December.

Last week the issue moved to JPACT, another obscure Metro committee that approves all regional transportation spending. The free pass for TriMet was quickly approved.

The final stop will be the Metro Council, which will approve the change on December 19.

Sadly, none of the four entities approving the recommendation ever seriously considered enforcing the Clean Air Act. The top priority at every level has been to craft an escape hatch so that business as usual can continue. However, even a cursory look at the evidence would have shown that TriMet had no excuses for non-compliance.

For example, Metro/TriMet/DEQ have all claimed that the “abrupt drop” in TriMet service was “caused by the recent deep recession.” However, as shown in Table 1, the drop in TriMet fixed-route service has not been abrupt; both hours of service and miles of service were lower in 2012 than they were in 2004, so this has been a problem for years.

 

Table 1

Annual Fixed Route Service Trends for TriMet

2004-2012

 

FY 04

FY 06

FY 08

FY 10

FY 12

Change

Veh. revenue hours

1,698,492

1,653,180

1,712,724

1,682,180

1,561,242

-8.1%

Veh. revenue miles

27,548,927

26,830,124

26,448,873

25,781,480

23,625,960

-14.2

Moreover, the recession had little to do with the cuts because TriMet’s operating budget has grown by 62% since 2004 (Table 2).

Table 2

TriMet Financial Resources

2004-2013 (000s)

 

 

2004

2006

2008

2011

2012

2013

% change

 

 

 

 

 

 

 

 

Passenger fares

$ 59,487

$ 68,464

$ 80,818

$ 96,889

$ 102,240

$ 112,500

+89%

Payroll tax revenue

$ 168,378

$ 192,450

$ 215,133

$ 226,456

$ 248,384

$ 259,233

+54%

Total operations revenue

$ 315,130

$ 342,274

$ 404,481

$ 410,388

$ 488,360

$ 508,971

+62%

It’s interesting that the pollutant in question here―carbon monoxide―is a serious one that can permanently injure or kill people, and has been explicitly regulated under the Clean Air Act for over 40 years. Yet, local air quality regulators don’t care about TriMet’s non-compliance. Meanwhile, Metro is squandering a vast amount of public money on its co-called “Climate Smart Communities” plan, aimed at decreasing carbon dioxide―a harmless trace element that has never been explicitly regulated by the Clean Air Act.

In fact, the most notable consequence of increased CO2 levels in lab experiments is the faster growth of plants, which is generally thought to be a good thing. But CO2 has been demonized by environmental activists as a cause of “global warming,” so it must be regulated.

The new compliance plan for TriMet subtly changes the goal posts. By moving from a five-year rolling average to a 10-year average, and shifting the baseline year to 2008, TriMet picks a better year to begin measuring (service levels had already dropped by 2008), and gives itself more future years to “forecast” increased service, even if there is no reason to think such service will materialize. TriMet has publicly stated that the cost of employee fringe benefits must be reduced by 50% in order to restore lost service, and everyone who has watched public employee union negotiations knows that such concessions will never be made.

TriMet is a federal clean air scofflaw, but the local “regulators” are all in on the scam. For a region that prides itself as an environmental leader, this is a disgrace.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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The Portland Streetcar: Time to Reset the Vision

If some Portlanders are confused about why we have a 19th century trolley operating in a 21st century city, they are not alone. City leaders are confused as well.

According to the Streetcar Concept Plan adopted by the Portland City Council in 2009, there are three primary policy goals related to streetcar expansion: (1) help the city achieve its peak oil and sustainability strategies; (2) provide an organizing structure and catalyst for the city’s future growth along streetcar corridors; and (3) integrate streetcar corridors into the city’s existing neighborhoods.

Oddly, providing transit service is not an explicit priority, even though that’s the primary reason people ride. Instead we have a mishmash of peak oil mania―now a quaint artifact due to the shale oil and gas booms, coupled with advanced technology―and vague references to real estate development. Given that this plan was estimated to cost $750 million and the city is broke, perhaps we should rethink the objectives.

First, the fundamental purpose of any transit program is to move people. On this criterion, the trolley is a weak performer. It’s slow, it doesn’t go many places, and each car only has 30 seats. It has high costs and low capacity, when what we need is the exact opposite.

If a secondary purpose of the streetcar is to encourage development, there are much better ways to do so. Subsidizing the streetcar means that most property owners will never benefit, because the system is tiny―seven route-miles after two decades of planning. If the city were simply to streamline the permitting process and lower System Development Charges, we would incentivize far more development in all sectors of the city compared to laying another mile of track.

Advocates claim that streetcar lines are “permanent” and provide stability for nearby development, but thousands of miles of streetcar tracks in the United States were paved over when they became obsolete 80 years ago. More recently, the streetcar tracks in South Waterfront along Moody Avenue have been torn up three separate times since 2011 to accommodate light rail. Nothing is really permanent; and when change is needed, it’s a lot easier moving a bus line than it is ripping up streetcar tracks.

A Better Way

We should insist that the streetcar be treated as a transit expenditure and evaluated on those terms. If we do this, it’s clear that rubber-tired vehicles traveling on the existing road network make much more sense.

Of the bus options I’ve examined, the best one is the Metro Rapid in Los Angeles. This system relies on distinctive, low-floor CNG buses with red stripes providing fast, reliable transit service. It operates in general purpose traffic lanes and achieves relatively high speeds by having stops spaced 0.75 miles apart, on average.

Also, the Metro Rapid buses have the technical capacity to shorten a red light or extend a green light at intersections to improve travel time.

A summary of the key characteristics of this system compared with the Portland Streetcar is shown below:

LA Metro Rapid Bus

Portland Streetcar

Year opened

2000

2001

Annual boardings

72 million

4.1 million

System length

400 miles

7 miles

Capital cost/mile

$0.35 million

$29 million

Peak frequency of service

Every 3-10 minutes

Every 14-19 minutes

Average speed

14-30 MPH

7-12 MPH

The Portland Streetcar is 83 times more expensive to build than the Rapid Bus alternative. Is it 83 times better? No. In fact, it is not superior by a single metric. The Rapid Bus is cheaper, twice as fast, and has much greater coverage throughout the city. It’s an actual transit system, not a Disneyland ride.

We should stop further expansion of the streetcar and shift public resources to low-cost, higher-speed bus transit.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Metro’s War on Single-Family Housing Continues

For more than a decade, the regional government, Metro, has been quietly herding people into high-density neighborhoods. For those unaware of this policy, the recently announced plans for 80 acres of development near the light rail station at Sunset Transit Center should be a wake-up call: The developers plan to build 2,175 new housing units, and none of them will be single-family homes. In order to meet Metro-imposed density requirements, the project will be dominated by mid-rise apartment complexes, along with commercial and retail buildings.

Metro anticipates that virtually all future development projects will be similar. In draft documents for a planning exercise called “Climate Smart Communities,” Metro notes that the current number of Portland-area households in mixed-use neighborhoods is 26%. By 2035, that number likely will rise to at least 36%. No options for reducing density are being studied.

Metro’s vision of ubiquitous apartment bunkers means that the region will slowly become a childfree zone, because few parents wish to raise their children in vertical housing. Portland parents, and those who hope to become parents, should ask hard questions about why the Metro Council thinks this is a great leap forward for livability.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Why Was Moody Avenue Shut Down―Again?

Last week, TriMet proudly announced that the tracks for Milwaukie light rail had successfully been laid in the South Waterfront district to allow light rail to cross SW Moody Avenue next to the new OHSU construction project. When finished, there will be a light rail stop at that location, and the train will then go up and over the new Willamette River bridge.

What TriMet did not say in its press release is that SW Moody had already been torn apart, raised 14 feet, and rebuilt over an 18-month period ending June 2012. The tab for this retrofit was $52 million. The whole point of raising the road was to allow the Milwaukie light rail line to cross it at grade. Thus, the light rail tracks should have been laid when the entire road was being rebuilt during 2011.

The most recent retrofit shut down Moody Avenue for three weeks and required the complete removal of the Portland streetcar tracks for the third time in three years. This was a severe inconvenience to South Waterfront workers and a waste of taxpayer money.

TriMet has yet to publicly say how much this second retrofit cost, nor has the agency explained why it was done 15 months after the first rebuilding. An explanation is in order.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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“Field of Dreams” Is No Strategy for TriMet

September 12 will be the 15th anniversary of the opening of Westside MAX. Unlike most transit projects, Westside light rail was deliberately routed through vacant land with the expectation that it would be a catalyst for “Transit-Oriented Development” (TOD). Planners stated, “The success or failure will be determined in large part by what happens around its 20 stations.”

Fifteen years later, the record is disappointing. There have been thousands of housing units built near light rail, but very little retail or office space. In at least two cases, ground-floor retail near light rail was such a flop that it was later ripped out and converted to residential. Most projects have been under-built for parking, causing problems for both residents and neighbors.

Most importantly, light rail did not magically change travel behavior in Washington County. Extensive field monitoring by Cascade shows that for a quarter-mile or half-mile radius around MAX stations, more than 85% of all trips to and from the area during the morning peak period take place in a motor vehicle. Light rail use rarely exceeds 8% of all trips, and the ratio drops even more on weekends.

The “Field of Dreams” strategy was fun for a movie, but it hasn’t worked for transit planning. TriMet should learn from this experience and pull the plug on any more light rail projects.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Mayor Hales’s Environmental Vision Lacks Grounding in Reality

Recently, Mayor Charlie Hales gave a speech welcoming out-of-town dignitaries visiting Portland as part of “World Environment Day.” Speaking before an obviously friendly audience, Mayor Hales made a number of claims that show a lack of critical thinking about environmental issues. Four in particular deserve comment.

First, the Mayor said that the city “must urge” the Oregon State Treasurer to divest of all state holdings in fossil fuel. This might be a harmless gesture if the Mayor did that with his own personal portfolio, but forcing public investment managers to sell off holdings for strictly political reasons would be a violation of their fiduciary trust to those whose funds they manage. Arbitrarily selling assets would increase transaction fees and could reduce total returns to beneficiaries by disposing of securities at discounted prices (relative to true market values).

Moreover, divesting fossil fuel assets would have no effect on any measurable environmental problem.

The Mayor also invoked the tired “Peak Oil” argument that companies managing fossil fuel assets must inevitably fail because oil, gas, and coal are finite resources. But that prediction has been wrong for over 100 years and will continue to be wrong for the foreseeable future. Indeed, at least one international energy statistical agency has predicted that the United States likely will be energy-independent by 2020 due to technological innovations in oil and gas exploration that are causing large increases in production.

Mayor Hales further warned that we must act before the “carbon bubble bursts.” While it is true that we currently have a carbon bubble, it’s not the one he is thinking of. It is a government-created buying binge in carbon offsets, renewable energy credits, and green tags. These products, which exist primarily to satisfy regulatory mandates, have no underlying assets backing them and represent one of the largest Ponzi schemes in history. When the fraud is finally exposed, holders of these worthless securities will be forced to write off billions of dollars in losses.

If the Mayor is really concerned about avoiding the subprime carbon market, he should publicly instruct his staff to quit buying renewable energy credits.

Second, Mayor Hales pledged to begin implementation of the resolution passed last year requiring 100% of city electricity from politically correct “renewable sources.” Unfortunately, the Mayor is more than a decade late to this party, and the beer is stale. Back in 2001, the City Council pledged the very same thing, to be implemented by 2010. When that deadline passed, the city had managed to reach only about seven percent of the goal.

Not only is this goal unachievable for the city, it’s not even desirable. Since large-scale hydroelectric projects and nuclear power plants are typically excluded by green power advocates as “renewable” energy sources, the only way to achieve 100% renewable energy purchasing in the short term would be through massive expenditures for utility-scale wind energy. But since wind is guaranteed to fail randomly, it must be backed up at all times by base-load sources such as hydro, natural gas, and coal. If hydro steps in when wind fails, there is no net environmental gain. It’s one renewable substituting for another. If coal and gas are used, there is a net environmental loss, since these sources must be kept running even when not needed.

The Mayor’s vision is akin to forcing a rental car company to buy a large percentage of cars that randomly stop working, and then maintaining a back-up fleet that is kept idling 24 hours a day to rescue the stranded cars on a moment’s notice. Nobody would propose such a policy for an auto fleet; and environmentally conscious politicians should not advocate it for the electricity grid, either. Wind power is an expensive nuisance to the grid and should be discouraged, not mandated.

Third, the Mayor pledged that within 10 years, the bike “will be the preferred mode of transportation for all trips under three miles in Portland.” While politicians love to make outrageous predictions―since no one can disprove them―there is nothing in the recent past that suggests bicycling will come anywhere close to meeting this forecast. Bicycling has achieved a healthy market share for commuter trips into the central city, but over a 24-hour period for the entire city, cycling is minimal. Even in the South Waterfront district, a massively subsidized high-density neighborhood with a vibrant cycling population, 79% of all daily passenger-trips to and from the district are made in motorized vehicles.

Finally, Mayor Hales pledged that over the next 20 years, the Council will identify new revenues that will allow the city to turn every street in Portland into a “Complete Street” with pervious surfaces, street trees, and sidewalks. Given that the condition of Portland streets has been declining for years and been the subject of several scathing reports by the Portland City Auditor, I’d suggest a much more humble goal for the Mayor. He should stop the pork-barreling of massive amounts of tax dollars on streetcars, light rail, and “traffic calming” projects (the primary cause of our current road system embarrassment) and begin allocating most transportation dollars to fixing and maintaining what we have.

One of the great success stories of the last century has been the steady improvement in environmental quality due to market-driven technological change. The best way Portland politicians can help continue this trend is to focus on the fundamentals of making the city a great place for entrepreneurs.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Moving Forward from the Columbia River Crossing

By Kevin Sharp

With the recent suspension of the Columbia River Crossing project, people are already asking, “What should replace it?” The answer, at least for right now, is, “Nothing.” While it is frustrating that the government spent $170 million to not build a bridge, the cost of a poorly conceived bridge would be much greater.

Before Portland and Vancouver do anything else, they need to look seriously into the root of the transportation problems facing each city and plan accordingly. They also need to understand that just replacing the I-5 Bridge with a different bridge is not a lasting solution to the traffic problems. A new bridge needs to be a supplement to the existing Columbia River bridges.

To make the project viable, Portland also needs to abandon its inherently political goal of spreading light rail anywhere and everywhere. A simple bridge to ease traffic congestion is all that is necessary; but Portland transportation planners continually insist on expanding the MAX line to Washington―while Washington residents obviously do not want that. Any attempt to send light rail to Vancouver will only waste more time, taxpayer dollars, and resources that could go to more productive and valuable projects. A bridge should connect the cities; it doesn’t need to drive them apart.

Kevin Sharp is a research associate at Cascade Policy Institute, Oregon’s free-market think tank.

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Testimony on Beaverton Economic Development Project Grant

Cascade President and CEO John A. Charles, Jr. testified regarding a proposed economic development grant in Beaverton before the Oregon Transportation Commission.

Testimony of John A. Charles, Jr.

President & CEO

Before the Oregon Transportation Commission

June 19, 2013

My name is John Charles and I am President of Cascade Policy Institute. Cascade is a non-partisan policy research center, working to promote economic opportunity, individual liberty, and personal responsibility.

I have analyzed the staff report for Agenda item C1, along with related documents provided by Metro and the City of Beaverton. I have also visited the .8 mile stretch of HW 8 that is being considered for a retrofit, and walked the area on both sides of the highway. In addition, I have conducted extensive field research since 1996 on the nearby Beaverton Round light rail station.

I urge the Commission to reject the IOF grant request, for the following reasons:

 

This is not an economic development project. The primary objective of project advocates is to lower the design speed on HW 8 from 45 MPH to 30 MPH. There is no evidence that such action would incentivize additional capital investment in the region. Indeed, the sad experience of the nearby Beaverton Round district suggests that just the opposite will occur. Deliberately slowing traffic and encouraging more density in the region will make it less attractive.

The series of photos below are instructive on this point. Notwithstanding the seductive architectural rendering that advertised the future project back in 1996 – in which many pedestrians were envisioned relaxing near light rail and no parking was necessary – the reality proved to be quite different. The project went bankrupt twice. Retailers have struggled. And oddly enough, the site is covered with parking, including surface lots, gated private parking, and the tallest single building in Beaverton – a parking garage.

Unfortunately, local planners have learned nothing from the experience. On two different occasions, Metro appropriated $2 million of public money to Beaverton so that the adjacent Westgate theatre could be purchased and bulldozed. The apparent goal was to build more “transit-oriented development” that would improve the neighborhood. The site is still vacant after nearly a decade.

 

The proposed “tie-ins” of the HW 8 project to a low-stress bike route are a waste of money because sensible cyclists are already riding on nearby parallel streets. One of the selling points of the Beaverton proposal is that “traffic calming” on HW 8 will make it easier for cyclists. But low-stress cycling options already exist, as shown below.

 

Attempting to turn a state highway into a boutique “Downtown Main Street” is a nostalgic trip to the past that has no relevance. Metro has encouraged most local governments to subsidize downtown investments based on a “Main Street” model. Tigard has done this, but not by trying to re-invent nearby HW 99w; the city has simply created a faux-downtown that benefits a few businesses while being largely ignored by most Tigard residents.

 

There is no need for a new traffic light at the Rose Biggi/HW 8 intersection. The proposed Canyon Road retrofit project would add another traffic light at Rose Biggi Drive, even though there are already 5 traffic lights on HW 8 in the .8 miles of project territory. The fact that the Beaverton City Council is moving the entire City Hall staff to the Round is no reason to add another light; there are already two traffic lights serving the Round, on either side of Biggi Drive.

 

Conclusion: Stripping away the political window dressing, the real point of this project is to degrade the state highway system by reducing the design speed from 45 MPH to 30 MPH on HW 8. The OTC should resist this effort. Local planners have been waging a political campaign against auto-mobility for over 25 years, on such routes as HW 43, HW 97, and HW 26. Planners and the cycling/pedestrian/transit advocacy groups will never be satisfied, and will be emboldened to ask for even more if you keep giving away the mobility functions of the state highway system.

 

Click here to see the full testimony with photos.

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Open Letter to Federal Transit Administration Regarding TriMet

 On June 14th, John Charles sent this letter to the Federal Transit Administration regarding TriMet and C-TRAN proposals for the CRC light rail project.

June 14, 2013

 

Richard F. Krochalis

Regional Administrator, FTA

Jackson Federal Building
915 Second Avenue, Suite 3142
Seattle, WA 98174

            Re: FTA requirements for operating funds on New Starts projects

Dear Mr. Krochalis,

I was in the audience on May 15th when you discussed the CRC light rail proposal with the C-TRAN board. I heard you say repeatedly that the application for a FFGA could not proceed until C-TRAN had a firm commitment of adequate funding to operate the new train line.

However, those statements are at variance with how FTA is handling the same issue for federally funded LRT projects in Portland. As I outlined to you in a detailed letter two years ago, TriMet has been in violation of its FFGA for the Green Line since the day it opened, and FTA has done nothing about it.

Service hours for the Green Line were reduced by 33% before it ever opened in September 2009.[1] Service has continued to decline since then. Weekly revenue hours have dropped from 692.4 in the opening year to 686.3 in the fall of 2012, a loss of 1%.[2]

TriMet is also in violation of its FFGA for the Yellow MAX line. That line opened in 2004 with 605.4 weekly revenue service hours. By the fall of 2012, service had dropped to 568.4 weekly revenue hours, a loss of 6%.[3]

Peak-hour service on the Yellow Line was supposed to operate at headways of 10 minutes in the opening year, improving to 7.5 minutes by 2020[4]. Instead, peak-hour headways are currently 15 minutes.[5]

As I pointed out to you in 2011, TriMet has a dedicated revenue source that was supposed to be used to fulfill the obligations of the respective FFGAs. That source, the regional payroll tax, was enhanced by the state legislature in both 2003 and 2009, allowing TriMet to raise the tax rate. The first tax increase was implemented effective January 2005, and has raised a cumulative total of $122.6 million in new revenue through FY 13.[6]

The combined net operating costs of the Green and Yellow lines in 2011 were $10.2 million.[7] Clearly the new revenues generated by the payroll tax rate increase were adequate to pay for all promised new service on the two new MAX lines, if such service had been a priority for TriMet – which it isn’t.

Not only has TriMet failed to provide promised service on federally-funded light rail lines, the agency’s  total fixed route service has dropped by 14% since 2005 — despite the fact that the agency’s all-funds budget has gone up by 125% over that same period, as displayed below:

TriMet Financial Resources, 2004-2013 (000s) 

 

FY 04/05

FY 08/09

FY 10/11

FY 11/12 (est)

FY 12/13 (budget)

% Change 04/05-12/13

Passenger fares

$  59,487

$  90,016

$  96,889

$  104,032

$117,166

+97%

Payroll tax revenue

$171,227

$209,089

$224,858

$232,832

244,457

+43%

Total operating resources

$308,766

397,240

$399,641

$476,364

$465,056

+51%

Total Resources

$493,722

$888,346

$920,044

$971,613

$1,111,384

+125%

 

Annual Fixed Route Service Trends, 2004-2012 

FY 04

FY 06

FY 08

FY 10

FY 12

Change

Veh. revenue hours

1,698,492

1,653,180

1,712,724

1,682,180

1,561,242

-8.1%

Veh. revenue miles

27,548,927

26,830,124

26,448,873

25,781,480

23,625,960

-14.2

In its most recent long-term financial forecast, TriMet admits that the agency’s current service problems are “not caused by TriMet’s revenue base.” According to the agency, TriMet’s operating revenues per capita “are 70% higher than its peer comparators.”[8]

Nonetheless, TriMet service is in a death spiral.

TriMet General Manager told his board in February that the forecast for TriMet service shows that by 2030, the agency will have a “revenue-expenditure imbalance” of some $200 million. Therefore, TriMet clearly does not expect to meet its light rail service obligations to FTA at any time during the life of the two relevant FFGAs.

In your response to me on June 20, 2011, you noted that many transit agencies experience temporary service declines due to various economic factors. Such conditions were “not typically viewed by FTA as a breach of contract.”  You pointed out that Section 19(a) of the FTA FFGA discusses “default” in terms of “…substantial failure of the Grantee to complete the Project in accordance with the Application” for federal funding.

It is clear that TriMet has failed and will continue to fail to meet its contractual obligations to operate federally-financed light rail lines as promised.

Given these facts, I can only conclude that either you misinformed the C-TRAN board about the importance of local operating revenues, or you will soon be requiring TriMet to begin fulfilling its FFGAs for the Green and Yellow lines. Which of these things is true?

Please advise at your earliest convenience.

Sincerely,

 

John A. Charles, Jr.

President & CEO

 

CC:       C-TRAN Board of Directors

TriMet Board of Directors

Interested parties

 


[1] TriMet, Fall 2010 Financial Forecast, p. 39.

[2] TriMet finance office, personal communication with the author, September 18, 2012.

[3] Ibid

[4] TriMet, Before and After Study, Yellow MAX Line, 2009, p. 2-2.

[5] TriMet website as of June 14, 2013, http://www.trimet.org/schedules/w/t1190_1.htm.

 

[6] TriMet, CRC August 2011 New Starts Submittal, Table 1.

[7] TriMet, FY11 Operating Statistics

[8] TriMet, Long Term Fiscal Sustainability Plan, December 2012, p. 7.

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WES at 4: Still a Financial Train Wreck

February marked the four-year anniversary of the Westside Express Service (WES), the 14.7-mile commuter rail line that runs from Wilsonville to Beaverton. While the train’s owner, TriMet, has emphasized the steady growth in ridership over time, the truth is that WES has been a failure. Daily boardings are still far below the opening-day forecast, and taxpayers subsidize each rider by nearly $40 per round trip.

Although WES was 15 years in the making, it was always a project in search of a purpose. At various times the train was promoted as: (1) a congestion relief tool for HWY 217; (2) a catalyst for so-called “Transit-Oriented Development;” or (3) a way of providing “another option” for travelers. None of these arguments holds up to scrutiny.

During legislative hearings in Salem, representatives from Washington County claimed that WES would take 5,000 motor vehicles per day off of nearby highways. But WES is not even capable of doing that because it only runs 8 times (each direction) over a four-hour period in the morning, and 8 more times in the afternoon, with seating capacity limited to 154 or less on each trip. The train does not run at all on weekends.

In contrast, both HWY 217 and I-5 are heavily used throughout the day, every day of the week, by passenger cars, trucks, buses and emergency service vehicles. WES only caters to passengers.

During its best hours of performance, the total number of passengers traveling on WES is less than 0.5% the number of motorists traveling on HWY 217/I-5 at those same hours. Moreover, every time WES crosses Scholls Ferry Road or any of the other busy East-West thoroughfares, it ties up dozens of vehicles for 40 seconds or more. Since the train itself typically only carries 20-50 passengers per trip, this means that WES actually has made Washington County congestion worse than it was before the train opened.

WES also will not be a catalyst for “transit-oriented development,” because the train stations are a nuisance, not an amenity. The noise associated with train arrivals was always underestimated and has proven to be a significant problem for nearby businesses and residents.

As for the hope that WES would provide “another transit option,” there were already two TriMet bus lines providing over 4,000 boardings per day in parallel routes prior to the opening of WES. Commuter rail simply replaced inexpensive bus service with a massively subsidized train.

Several key statistics summarize the problems with the train:

  • WES was originally projected to cost $65 million and open in 2000. It actually cost $161.2 million and opened in 2009.
  • TriMet projected an average daily ridership of 2,400 weekday boardings in the first year; actual weekday ridership was 1,156 in 2009 and has grown to 1,639 in 2013. Since each rider typically boards twice daily, only about 820 people actually use WES regularly.

To truly appreciate the high cost of commuter rail, we need to compare it with other types of service offered by TriMet: light rail and bus. The following are averages for the month of January 2013.

Operating cost per

Vehicle-hour

Operating cost per

Originating ride

Operating cost per

Vehicle-mile

Bus

    102.14

    3.97

    7.94

MAX

     282.13

    2.52

   18.84

WES

$ 1,251.94

$ 20.31

$ 57.30

The operating costs for WES are 12 times higher per hour than bus service, but the public benefits are not 12 times higher. In fact, WES is not even equal to bus service; it is far less flexible, and the equipment is unused most of the time.

TriMet recently predicted that within the next decade, more than half of all bus routes will be eliminated due to operating losses if something doesn’t change. The Board places the blame for this on a labor union contract that saddles the agency with the costliest employee benefits package in the nation. But the union did not force management to build an absurd commuter rail line; that was a choice made by the Board alone, without any consideration of the legacy costs it would impose on future riders.

There will be no happy ending to this story. WES is destined to be a one-hit wonder―an expensive monument to the egos of Westside politicians and TriMet managers. Taxpayers would be better served over the long term if we simply cancelled WES, repaid grant funds to the federal government, and moved the few WES customers back to buses.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Is Driving Less a Good Thing?

Recently, the Metro Council received the results of a four-county household travel survey – the first such survey conducted by its staff since 1994. Among other things, the results showed that 81% of all regional commuters use a car to get to work, compared with 90% in 1994.

 

Metro Councilors were very excited by this apparent drop. They immediately took it as proof that the agency’s anti-car, pro-density policies are “working.” Council President Tom Hughes directed staff to quickly come up with a favorable “storyline” for the survey.

 

However, that may be a difficult task, because the evidence about regional travel patterns is more nuanced than it appears. For example, automobile commuting has dropped, but that has generally not translated into higher transit use. In fact, market share for transit in Portland has flat-lined for the past 12 years, as shown below. Travel is shifting to biking, walking, and telecommuting.

 

Mode Share for Weekday Commuting in Portland

1997-2012

 

Mode

1997

2000

2004

2008

2010

2012

Auto

80%

77%

80%

73%

69%

67%

Transit

10%

12%

11%

11%

12%

12%

Drive/transit

2%

2%

2%

4%

Bike

3%

3%

4%

8%

7%

7%

Walk

5%

5%

4%

4%

6%

7%

Other

7%

6%

                  Source: Portland Auditor’s Annual Community Surveys

 

This has caused a large mismatch between mode-shifting trends and public expenditures. Since 2000, we’ve opened a commuter rail line, created the Portland Streetcar, added four new light rail lines, approved construction of a new transit bridge over the Willamette River, and watched TriMet’s annual budget grow by 142%. Yet, the transit market share for commuting is stuck at 12%.

 

Even worse, transit share is actually declining in TriMet’s most natural market, downtown Portland. According to the Portland Business Alliance, between 2001 and 2010 the transit share of commuting travel for downtown workers dropped from 45% to 38%.

 

Other travel behavior metrics are equally puzzling. For instance, Metro regularly keeps track of daily vehicle miles traveled per-person (VMTPP) in the region. Since 2000 the VMTPP for Portland residents has declined by 4 percent, from 20 miles per day to 19.2. Yet the daily VMTPP for Vancouver travelers dropped by a much bigger margin, from 21.8 miles to 17.23 – a 21 percent change.

 

So if Metro Councilors hope that their staff will create a favorable “storyline” showing how regional land-use policies have led to reduced driving, they will also have to explain why the drop has been much greater north of the Columbia River.

 

But putting these conflicting trends aside, the biggest problem with Metro’s response to the survey is the agency’s worldview that driving is socially undesirable, so if we have less auto commuting, the region is automatically more “livable.” Not only is there nothing intrinsically wrong with driving, one easily could make a case that high levels of personal automobile use are indicators of an economically vibrant and socially dynamic region.

 

Increased driving is strongly correlated with higher incomes. In the Metro travel survey, transit mode share for households with less than $25,000 of family income was 9 percent, but only 2 percent for households with income greater than $75,000. How many people in the region would be unhappy if all households had incomes greater than $75,000 but transit use dropped as a result?

 

ODOT data shows that for every new job created, we should expect to see another 15,500 vehicle miles travelled each year. If total auto use went up because vast numbers of new jobs were created, would that make the region less livable?

 

And numerous studies have shown that access to a private automobile is critical to improving the economic wellbeing of low-income households, especially for those seeking employment. In fact, a growing number of progressive social service agencies (including at least one in Portland) are now running low-income car loan programs to help get poor people into private wheels. Should we discourage such programs because they cause transit use to drop?

 

Every trip has a purpose. If that purpose can be met best through a privately owned motor vehicle, then it does not make us better off to have politicians artificially discourage auto use by using parking meter revenues to pay for the streetcar, disallowing needed highway expansion, raising the TriMet payroll tax rate, subsidizing high-density projects with tax abatements, and cannibalizing scarce roadway capacity for light rail.

 

Instead of scheming to put a political spin on its new travel survey, Metro should use it to start a new conversation about how to define “livability.”

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Hospital Apologizes, PDC Repeats the Tragedy

Last Friday, Legacy Emanuel Hospital held a breakfast to apologize to the North Portland community for bulldozing nearly 300 homes and businesses 40 years ago. Hospital administrators conspired with Portland urban renewal officials to secretly plan a 55-acre expansion in the Albina neighborhood. By the time affected property owners were informed, the final decision had been made. The city used its powers of eminent domain to seize all private property within the district, destroying a vibrant African American community.

Hospital officials now admit they were wrong and promise never to do it again. Unfortunately, their colleagues at the Portland Development Commission (PDC) haven’t learned the same lesson. PDC is teaming up with TriMet to build the Portland-Milwaukie light rail line. Sixty-eight businesses and twenty residences will be destroyed to make way for the slow train, at a taxpayer cost of $1.5 billion.

This is a tragic waste of money, time, and energy. The Portland-Milwaukie corridor is already served by five TriMet buses, including express and local service. There will be no public benefits to the light rail line, yet 88 private buildings will be lost.

If urban renewal officials refuse to learn from experience, we should take away their powers. The State of California did this last year when it abolished all urban renewal districts. Oregon should do the same when the legislature convenes in 2013.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Testimony before the Clackamas County Board of Commissioners

Testimony before the Clackamas County Board of Commissioners

Regarding the revised IGA for the Milwaukie Light Rail Project

August 22, 2012

 John A. Charles, Jr.

President & CEO

My name is John Charles and I represent Cascade Policy Institute, a non-partisan policy research center.

The Clackamas County Board seems to think that the financing agreement signed with TriMet in 2010 is a binding contract. However, TriMet itself has already breeched the contract, as follows:

  1. The Clackamas County Commission formally endorsed the “PMLR Locally Preferred Alternative” (LPA) on July 24, 2008. That endorsement was for a light rail plan including 1,000 parking spaces at the Park Avenue station and another 1,000 spaces at the Tacoma Street station.

In addition, the LPA offered a possible alternative alignment, known as the “Minimum Operating Segment”, terminating at Lake Road in Milwaukie. If this plan were chosen, the Tacoma Street station would include 1,250 parking spaces.

  1. The LPA with 1,250 – 2,000 committed parking spaces was endorsed by the County Commission when it signed the IGA in 2010.
  1. The project now being built has changed dramatically. The Park Avenue station includes only 350 parking spaces and the Tacoma Street station 320 spaces. This will lower the expected ridership of the project by a wide margin.

The entire 26-year experience with TriMet’s light rail system shows that outside the Portland city center, light rail is largely dependent on park-and-ride lots for ridership.  For example, the Gateway Transit Center has had a chronic parking shortage for decades because it is the closest parking lot to downtown on the east side. On the Westside, the Sunset Transit Center has only 587 spaces. Since this is the closest Westside TriMet lot to downtown Portland, it is usually filled to capacity every weekday by 7:00 a.m. TriMet would have higher ridership on the Westside MAX if it had built a much larger parking lot.

  1. By under-building for parking on the PMLR line, TriMet is asking both Clackamas County and the City of Milwaukie to absorb the many downsides of this project – including the taking of homes and businesses, loss of express bus service to Portland, and the cannibalization of other public services – while offering no transportation benefits compared with existing bus service.

Since TriMet has chosen to begin construction on a different project than the one promised, the Clackamas County Commission is free to opt out of previously made commitments, and should do so. The PMLR project never made any sense from a transit standpoint, and is clearly a step backwards for express bus commuters on HW 99e, who will be forced to transfer from the fast bus to the slow train in Milwaukie if this is built.

Regardless of how the project was perceived in 2008, public sentiment has changed. The County’s most recent “Community Services and Issues” survey, conducted by Davis, Hibbitts & Midghall during late February and mid-March, asked respondents for “the most important issues” facing the county. Supporting light rail elicited only a 3% positive response, while 5% of respondents stated that “stopping MAX” was important to them. Overall, many other issues are of greater concern to county taxpayers, including the economy, road maintenance, education and law enforcement.

Recommended Course of Action for Clackamas County:

  • The BCC should formally state that the IGA with TriMet is no longer binding because TM is building a different project than the one promised in 2010 and 2008.
  • The county’s plan to sell bonds should be abandoned and the entire PMLR project de-funded.

 

  • The terminus of the line should be moved from Park Avenue to Tacoma Street, and the parking facility at that station should be increased to 1,250 spaces, as originally anticipated in the EIS. That would be financially feasible with savings from shortening the line.

Conclusion

It is clear that the September 18th ballot measure requiring a public vote on rail expenditures is going to pass easily. Instead of fighting the obvious, the BCC should use this vote as a mandate to protect county taxpayers from a bad deal negotiated in a different era.

 

Fortunately, it’s not too late to make this move; the single most expensive property scheduled for condemnation on the entire PMLR right-of-way – the Beaver Heat Treating facility on Moore Street – is still standing. This one property alone is likely to cost more than the entire $19.1 million IGA that is being discussed tonight. If the BCC does the right thing, the family-wage jobs at Beaver Heat Treating and other businesses in the ROW will be protected, and we won’t throw scarce tax dollars down a rat hole.

However, the window of opportunity is closing, because TriMet knows that the faster they destroy private property, the more difficult it becomes politically for elected officials to do the right thing. I encourage you to reject the proposed amended IGA, and to terminate the County’s interest in this project immediately.

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Tear Down These Walls!

As a founder of Cascade, I was asked to speak at the fourth annual Oregon Tax Day Tea Party, this year held on April 14 in Clackamas County. Some 400 activists attended what turned out to be the most inspiring event of its kind since the Tea Party began organizing in 2009. For a full description and video of the event, go to www.OregonTeaParty.org.

 

I told the audience a human story from when the Berlin Wall fell in 1989. My friend Wall Street Journal editorial writer John Fund wrote about his encounter with four teenage girls while visiting East Berlin in 1984. As he prepared to board the train that would take him back to the West, John asked them what they wanted to be when they grew up.

 

“A schoolteacher, said one. A hairdresser, said another. A nurse, said the third. Only Monika, the oldest and clearly the wisest, hesitated. Finally, she sighed and said, ‘It doesn’t make any difference what we become when we grow up. We will still always be treated like children.’”

 

That statement made a profound impact on John. He noted how he could go anywhere in the world from that street corner, but these teenagers could not go 500 yards to see the bright lights of West Berlin.

 

They had to remain in “a semi-comfortable, but drab and kindergarten-like existence, in which independent thoughts were hidden from the government.”

 

John and Monika kept in touch over the next few years. Then, two days after the Berlin Wall fell on November 9, 1989, John’s phone rang.

 

There was the unmistakable sound of an overseas call. “This is Monika!” she shouted in halting English. “I am calling from Berlin West! I am over the Wall!”

 

Monika did not plan to flee East Germany. But now that the Wall was down, she could leave if the people who ran that government reneged on their promises of free elections and economic reforms.

 

John reminded Monika of their first meeting and asked if she felt she was finally being treated like a grownup.

 

“Yes,” she said. “I think everyone in my country decided for themselves to grow up overnight.”

 

I explained to the Tea Party audience that Monika knew what it was like to be treated like an adult by her government; but Americans are now being treated more like children, as the limited government our Founders gave us morphs into a behemoth. Activists like them must stand up and tear down the Walls of national programs like ObamaCare, and the Walls erected by local programs like “Smart Growth” that have overtaken Multnomah County and threaten to encroach into neighboring counties.

 

Many in the Tea Party audience were part of what is becoming known as the “Clackastani Rebellion” because of their efforts to defeat smart growth and light rail plans in cities like Damascus and throughout Clackamas County.

 

Cascade Policy Institute has helped educate Oregonians since 1991 about the benefits of freedom and liberty. We look forward to working even more closely with everyone who is committed to keeping our communities and our state from being encircled by our own, self-created Berlin Walls.

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Jeff Kropf talks with John Charles about TriMet’s Transit Hypocrisy

KUIK radio host Jeff Kropf interviewed Cascade President John Charles on his latest commentary, Transit Hypocrisy, about federal funding for the Portland-Milwaukie Light Rail Project.

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Transit Hypocrisy

Two years ago, the head of the Federal Transit Administration (FTA), Peter Rogoff, gave a speech to a room full of transit executives. His remarks were unusually blunt. Mr. Rogoff admitted that the transit planning process for new projects was biased in favor of light rail. But he reminded people that rail systems had significant long-term costs. FTA recently had concluded there were more than $78 billion in deferred maintenance costs for public transit agencies in the U.S., and three-fourths of those costs were associated with rail systems.

Mr. Rogoff pointed out that many local transit districts were seeking large federal grants for new rail lines, even though their overall levels of service were shrinking. He asked rhetorically, “If you can’t afford to operate the system you already have, why does it make sense for us to partner in your expansion?”

In the face of funding shortages at all levels of government, Mr. Rogoff reminded the executives that decisions about new transit service were moral decisions and that political leaders needed to “have the guts to say ‘no’ when everyone else wants to say ‘yes’.”

Unfortunately, Mr. Rogoff apparently forgot this speech as soon as he gave it. During the next two years, his agency encouraged Portland’s TriMet to continue planning for the most expensive transit project in the state’s history, the Portland-Milwaukie light rail line (PMLR). The Milwaukie line will cost more than $205 million per mile to construct and will destroy 68 businesses and 20 private homes.

In order to partially finance the so-called “local share” of the price tag (50% of construction cost), TriMet will have to sell $60 million of bonds in the next two years, and the debt service on those bonds will cannibalize bus service that has already been reduced four times since 2009.

Since TriMet service is shrinking, the agency is clearly in need of the “tough love” that Mr. Rogoff preached in 2010. Yet tomorrow, Mr. Rogoff himself will be in town to announce FTA approval of a Full Funding Grant Agreement (FFGA) that will waste some $745 million in federal money on the project over the next eight years.

There are many reasons why federal funding should have been denied years ago for the PMLR project. The most important is that TriMet has consistently violated FTA requirements that local transit agencies successfully operate federally funded capital projects for at least 20 years.

The most egregious example is the original MAX line that opened in 1986. At the time the Blue Line was being planned, TriMet promised that trains from Gateway to downtown Portland would run every five minutes during peak periods. Today, the actual frequency (known as “headways”) is every 8 minutes, or 60% worse than promised.

TriMet learned a lesson from this experience, but unfortunately it was the wrong lesson. Instead of killing the expensive rail program, TriMet simply lowered expectations for service on future rail lines. For the Yellow Line to North Portland, TriMet promised 10-minute service intervals for peak periods. Yet even with this lower bar, the agency could not meet its commitment. Peak-hour service on the Yellow Line currently operates at 15-minute headways, 50% below what was committed to.

The agency’s newest rail line, the Green Line to Clackamas Town Center, opened in September 2009. By then TriMet’s finances were so bad that project managers knew even before it opened that promised levels of service would not be met. Green Line service has been at least 33% below FFGA requirements since day one.

TriMet is now promising FTA that when the Milwaukie line opens in March 2016, it will offer peak-hour service every 10 minutes and off-peak service every 15 minutes. But since TriMet is unable to offer such service on any of its rail lines right now, no one should take this forecast seriously.

The saddest part about Milwaukie light rail is that it will make current transit riders in that corridor demonstrably worse off than they are today, due to the elimination of express bus routes. Nine buses stop at the Milwaukie Transit Center, and five of them travel on McLoughlin Boulevard to Portland city center. However, once light rail opens, all of these buses will no longer provide service north of Milwaukie. Transit customers boarding buses from points south will be forced to transfer at Milwaukie.

Light rail will also take longer than express bus service. The current scheduled time-of-travel for a trip from downtown Milwaukie to Portland State University on the #99 McLoughlin Express bus averages 17.5 minutes. An early morning run makes it in 12 minutes. The forecasted time of travel for light rail – which offers no express service – is roughly 19 minutes for the same distance.

None of this is necessary, because there is a very cheap alternative – a fact well known to Mr. Rogoff. Last month the FTA released a study, Metro Orange Line BRT Project Evaluation, looking at the cost-effectiveness of two different versions of bus rapid transit (BRT) in Los Angeles. The Orange Line is high-end BRT that resembles light rail because it has its own exclusive right-of-way and never has to travel in mixed-flow traffic. A second variation, known as the Metro Rapid bus, operates in general purpose arterial lanes, but achieves relatively high travel speeds simply by spacing stops apart by about 0.8 miles.

The study showed that in most respects, both light rail and exclusive-lane BRT are not cost-effective. The Metro Rapid bus system is the real bargain, especially compared with expensive light rail projects:

Capital Costs of Light Rail and Bus Rapid Transit Projects

Portland-Milw. Light Rail Line

LA Gold Line Light Rail

LA Orange Line BRT

LA Metro Rapid BRT, Ventura Line

Capital cost/mile

$205 million

$62.7 million

$26 million

$0.2 million

Peter Rogoff is about to hand over $745 million in federal funds for a Portland light rail line that will cost 1,017 times more than the LA Metro Rapid system. In what ways is it 1,017 times better?

Actually, it’s not even as good. The Rapid Bus system is cheaper, more flexible, twice as fast, arrives more often, and is easier to implement.

For more than 25 years, the Federal Transit Administration has been playing Charlie Brown to TriMet’s Lucy. No matter how many times TriMet promises to successfully operate another light rail project, in the end they always yank the ball away from FTA. Yet, here is the FTA administrator, getting ready to tee up another new project.

We know how this is going to end. TriMet’s rail empire will grow by a tiny fraction, while more bus service gets cut. As Mr. Rogoff once said, we need someone with the guts to say “no,” but it certainly won’t be him.

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Testimony Before TriMet Board of Directors Regarding the Proposed FY 2012-13 Budget

 

 

Testimony of John A. Charles, Jr.

 

Before the TriMet Board of Directors

 

Regarding the Proposed FY 2012-13 Budget

 

 

 

April 25, 2012

 

 

 

 

 

There are some elements of the proposed budget that move TriMet in the right direction. I support the proposals to eliminate the free-rail zone and reduce streetcar funding. Rail passengers have been coddled for far too long and these changes will require them to finally put some skin in the game.

 

 

 

Notwithstanding this progress, the budget overall has serious problems that the Board needs to address. The first is the assumption that management will win its protracted dispute with the ATU. Management has been forecasting this outcome for years, and has consistently been wrong. Examples of past predictions include the following:

 

 

 

  • TriMet press release, April 13, 2011: “The FY2012 budget assumes that a new Working and Wage Agreement with the ATU has benefits more in line with peer agencies, and consistent with those contained in TriMet’s July 2010 Final Offer.”

 

 

 

  • TriMet FY 2012 budget message, July 2011: “A critically important assumption upon which TriMet’s financial forecast and the FY 12 Adopted Budget are based is that TriMet enters into a Working and Wage Agreement WWA) with the Amalgamated Transit Union, probably through the binding arbitration process, and that the wages and benefits are consistent with those contained in TriMet’s July 2010 Final Offer….”

 

 

 

  • TriMet press release, October 26, 2011: “The contract expired in 2009 and both parties are now heading to interest arbitration scheduled for mid-January 2012.

 

 

 

  • TriMet FY 13 budget message, April 2012: “…the FY 13 proposed budget includes a $12 million revenue increase/expenditure reduction package, based on the assumption of a labor arbitration decision favorable to TriMet.”

 

 

 

Given that every recent prediction about the ATU contract has been wrong, it might be time to change the forecast. A more prudent forecast would be that the ATU wins, creating a $5 million imbalance for FY 13. Perhaps that should be addressed now in the current draft budget.

 

 

 

The second big problem with the budget is the continued fantasy that rail construction has no harmful effects on bus service. Some board members may not be aware that in February 2011, TriMet succeeded in getting the Oregon Transportation Commission to approve $13 million in scarce OTC “flex funds” for the Milwaukie light rail project, by promising that TriMet will “agree to refrain from requesting Capital bus Program funds for bus purchases for the next three biennia…”  This deal was made even though TriMet had been so desperate for new buses that it had put a $125 bond measure on the ballot the previous November. My testimony to the OTC is attached.

 

 

 

TriMet management simply does not value bus service; all the glamour is perceived to be in the ribbon-cutting ceremonies for new train lines. In FY 13 TriMet will sell bonds for PMLR and thus incur $3 million in new debt service. The agency is already paying more than $25 million in annual debt service for previous light rail bonds. This debt is a major reason why bus service has been cut by 13% in recent years, even though buses move 2/3 of TriMet customers each day.

 

TriMet has never demonstrated that the alleged “operating cost savings” of rail transit offsets the debt service and other “opportunity costs” associated with new rail construction.

 

 

 

There’s a very simple solution: terminate all rail expansion plans. It doesn’t matter how attractive rail may have once seemed; moving forward, the capital costs cannot be justified. It is indefensible to impose service cuts year after year, while spending more than $205 million/mile for tiny expansions of the rail empire (7.3 miles for PMLR and 2.9 miles for the CRC).

 

 

 

A third point is that the proposed budget once again hides the true cost of labor, by planning for another token payment into the OPEB trust fund of $865,760. While this is better than the FY 12 contribution of $410,000, the level recommended by the outside auditor last July was $77.7 million.

 

 

 

The unfunded actuarial accrued liability for OPEB is at least $876 million, and because TriMet is allowed to carry this debt off-book the public naturally assumes that all is well when the agency announces that it has a “balanced budget” each year. This practice of shifting obligations downstream simply sets up a ticking time bomb for future TriMet board members.

 

 

 

While making the full ARC payment of $77 million would be impossible now, a substantial down payment – with the tough decisions it would force right now — would have the medicinal effect of waking up the public to the seriousness of the problem.

 

 

 

Finally, attached is a chart showing the juxtaposition of TriMet’s huge revenue increases since 2004 with the steady decline in transit service.  This is a disgrace, yet the Board continues to accept it year after year, without even considering fundamental changes in strategy.

 

 

Business as usual is not going to work anymore. It’s time for board members to stop acting like victims and start taking control of the organization.

 

 Click here to see February 14 OTC Testimony.

TriMet Financial Resources, 2004-2013 (000s)

 

 

FY 04/05

FY 08/09

FY 10/11

FY 11/12 (est)

FY 12/13 (budget)

% Change 04/05-12/13

Passenger fares

$   59,487

$   90,016

$   96,889

$   104,032

$117,166

+97%

Payroll tax revenue

$171,227

$209,089

$224,858

$232,832

244,457

+43%

Total operating resources

$308,766

397,240

$399,641

$476,364

$465,056

+51%

Total Resources

$493,722

$888,346

$920,044

$971,613

$1,111,384

+125%

 

Note: TriMet payroll tax rate increased effective 1/1/05, and will rise .01% every January through 2024.

 

 Annual Fixed Route Service Trends since 2004

 (light rail, bus, commuter rail)

 

2004

2006

2008

2010

2011

% change

             

Peak veh

625

606

613

618

601

-3.8%

Revenue hrs

143,784

137,973

144,469

133,776

128,435

-10.7%

Vehicle hrs

2,621,657

2,476,114

2,532,453

2,375,802

2,247,113

-14.3%

 

Sources: Annual budget documents; monthly TriMet performance reports.

 

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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

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John Charles interviewed by KHON-2 News in Honolulu, HI

This week John Charles is in Honolulu, HI where he will be speaking at two conferences related to a proposal there for a new light rail line. John will be explaining why so-called ‘transit-oriented development’ doesn’t work the way planners think it does.

Tuesday morning, John was interviewed by local TV station KHON-2 News where he spoke about the pros and cons of fixed rail transit versus “rubber tire” bus service and the benefits of one over the other for Hawaii and most locations around the world.

Click here to view the full 3-minute interview.

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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.

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TriMet’s War on Urban Livability

The following is an op-ed posted in the Oregonian. Weigh in on the comments by visiting TriMet’s War on Urban Livability.

To watch a video on this topic, visit Green to Gray: Trimet and SW Lincoln Street


Why does TriMet hate Lincoln Street?

Between First and Fourth Avenues in Southwest Portland, Lincoln is a quiet, tree-lined street that has everything urban planners say they love: high density with a mix of land uses, regular TriMet bus service, more than 65 mature shade trees, and a wonderful north-south pedestrian walkway bisecting the street.

Yet, on or before September 15, TriMet will destroy all of this. The trees will be clear-cut, the street shut down, and several businesses lost, including the popular Candlelight Café. The reason: TriMet is taking the right-of-way for the proposed Milwaukie light rail line.

If this goes forward, it will be one of the worst public decisions in Portland’s history. TriMet will wreck an entire neighborhood simply to replace the #17 bus line with a slow train, at a cost of $205 million per mile. There will be no new service, and a beautiful Portland neighborhood will be ruined.

This demonstrates one of the fatal flaws of light rail: The infrastructure needed is out of scale with quiet, pedestrian-oriented urban streets. Once the street is destroyed and redone as a set of rail tracks with ugly overhead wires and a huge station, the beauty of the neighborhood is permanently lost.

Anyone who thinks differently should visit some of the light rail stations on the 25-year-old Blue line. None of the neighborhoods along East Burnside are better off today due to light rail, and several are markedly worse. The recently redesigned Rockwood MAX Station is a particularly hideous example of TriMet’s aesthetic “enhancement.”

Not only is light rail going to obliterate SW Lincoln Street in Portland, it will actually degrade transit service for Clackamas County riders, who are the ostensible beneficiaries of this fiasco. Currently, there are nine bus lines stopping at the Milwaukie Transit Center, and five of them continue to Portland. Once light rail opens, all of these buses will no longer provide service north of Milwaukie. Bus customers will be forced to transfer at Milwaukie.

Riders hate transfers. Making them switch from bus to train will push some of them back into their cars.

Moreover, light rail will increase travel times for transit riders. A peak-hour trip from downtown Milwaukie to PSU on the #99 McLoughlin Express bus currently averages 17.5 minutes and sometimes makes it in 12 minutes. The forecasted time of travel for light rail is roughly 19 minutes for the same distance. Why are we going to spend $1.5 billion to provide a slower commute?

This is an absurd project, but fortunately there is still a reasonable alternative: Build the new Willamette River bridge, but cancel light rail. Portland needs a new bridge anyway, and by allowing cars and trucks on the bridge in place of light rail, the South Waterfront district will finally have an eastern portal.

It’s not too late to return common sense to transit planning. Governor Kitzhaber appoints the seven TriMet board members, and they have failed him. He should simply override their decision, save the trees on SW Lincoln Street, and chart a new course emphasizing improved bus service in Portland.

We know this can be done. Tom McCall once fired the entire TriMet board. Gov. Kitzhaber should do the same.

John A. Charles, Jr. is president and CEO of Cascade Policy Institute, a nonprofit policy research center based in Portland.

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Green to Gray: TriMet and SW Lincoln Street in Portland, Oregon

Narration text below:

In the 1960’s, SW Lincoln Street, near Portland State University, was part of Portland’s first urban renewal district.

Dilapidated buildings were cleared, new development built, and thousands of shade trees planted.

Today, those trees tower over SW Lincoln Street… but not for long. Sometime on, or before September 15th, TriMet plans to cut down every single tree on the street… to put in light rail.

Most residents of the neighborhood are not happy with the decision.

The street is currently served by TriMet’s #17 bus line. If the goal is more transit, why not just run the #17 more often?

The Rockwood MAXX station was recently refurbished. Does SW Lincoln street really want to trade shade trees for concrete and art like this?

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John Charles message to the TriMet Board Members

Below is the message John Charles sent to TriMet board members on August 9, 2011. This comes one day before they vote on Resolution 11-08-58, which is the resolution “Authorizing TriMet to Acquire by Purchase or by the Exercise of the Power of Eminent Domain Certain Real Property Necessary to Construction of the Portland-Milwaukie Light Rail Project”.


Board members:

Before you vote on Resolution 11-08-58, I encourage you to stop by SW Lincoln Street tomorrow morning on your way to the Board meeting, and spend a few minutes enjoying the tranquility of this neighborhood. It has all the mixed uses that Portland planners love – residential, commercial and retail businesses, transit service (bus line #17), and two great pedestrian paths – along with more than 65 stately shade trees that were planted some 50 years ago as part of Portland’s first urban renewal project. Please visit the beauty shop that you will destroy with property condemnation, and talk with some of the clerks inside who are very distressed at what is about to happen.

Then imagine all the beautiful trees getting clear-cut by TriMet contractors on or before September 15. Imagine the entire street being blown up and widened to accommodate a slow, noisy light rail line. Picture a big light rail station in the middle of the block, with all the aesthetic glamour of light rail stations such as those located at East Burnside and 102nd, 122nd, 148th, or 162nd; or perhaps the station at North Interstate and Killingsworth, or the Beaverton Round.

Try and remember that even though Urban Renewal is supposed to be used to clean up “urban blight”, most light rail stations create urban blight. And remember that part of your light rail project is being financed with Urban Renewal dollars.

To truly understand the significance of the Milwaukie project, you need to go out to the neighborhoods and see how construction will actually affect them. It is not enough for you to stay above the fray. Light rail is not an abstraction, or just a series of drawings on a board. Light rail affects real people. You need to be aware of that before you pull the trigger and wreck their street.

The staff report is disingenuous when it states, “The business on site, Ed Wyse Beauty Supply, will not be directly impacted by construction. The building will not be affected and no relocation is required.” Of course it will be affected. It is a land-locked site. Customers cannot get to it from the west, south or east. Once you take their street frontage and have construction materials piled right up their front door, they will slowly twist in the wind and then go out of business. We saw this repeatedly on Morrison and Yamhill on the first MAX line, and again on North Interstate.

Don’t kid yourselves that your project is making some kind of surgical intervention onto Lincoln Street. You will be putting the Candlelight Café and Budget Rent-a-Car out of business directly (near 5th Avenue), and the Ed Wyse Beauty Supply out of business indirectly. You can’t pass the responsibility off.

Before you vote, I hope you will be able to state publicly for the record, in your own words, WHY you are doing this. If some businesses must be ruined and beautiful trees mowed down, what greater good is being sought? I don’t have an answer; I hope you do.

Sincerely,

John Charles

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John Charles responds to Portland Mayor Sam Adams

At the July 14, 2011 JPACT meeting, accusations were made about John Charles and the Cascade Policy Institute.  The response from John is below.


Dear Mayor Adams:

I am writing regarding the public criticism you made of Cascade Policy Institute at the July 14 JPACT meeting. I recently listened to an audio recording of the entire meeting.

You twice referred to an essay of mine about Milwaukie light rail as a “screed.”  You also said, as a follow-up to Councilor Burkholder’s earlier attack on me: “The forces to erode the foundation of objective analysis that we all seek to rely on are real. We’re under attack. Basic, impartial information is under attack. I’d like that group [a JPACT subcommittee to be formed in the future] to figure out how we’re under attack and what we can do to make sure that objective information is out there. I worry that we’ll come out with ideas that will just sort of sink for failing to sit on firm, objective soil. “

As the CEO of a policy research center, I share your interest in empirical evidence and data. Therefore I offer the following specific concerns about the Portland-Milwaukie light rail (PMLR) project, and invite you to respond to them in a factual manner:

  1. The Milwaukie-to-Portland corridor is already well-served by TriMet. There are nine buses stopping at the Milwaukie Transit Center, and five of them specifically travel on McLoughlin Boulevard to Portland city center via the Hawthorne Bridge. Of the five, three are local bus routes (31, 32, and 33), one is an express bus (#99), and one is a hybrid – the #30 originating in Estacada continues on to Portland for six runs in the morning peak, where it becomes known as the 31E or the 31L. Both offer types of express service to Portland city center from Milwaukie.

 

According to the published FEIS for this project, once light rail opens, all of these buses “would no longer provide service north of Milwaukie.”[1] Transit customers boarding buses from points south will be forced to transfer at Milwaukie to a slow train with limited seating capacity. This is a degradation of service for them, not an improvement.

 

The ostensible goal of this project is to provide improved transit. Why are you planning to spend $1.5 billion on a train line that will clearly make thousands of current TriMet customers worse off than they are today?

 

  1. The current scheduled time-of-travel for a trip from downtown Milwaukie to PSU on the #99 McLoughlin Express bus averages 17.5 minutes. An early morning run makes it in only 12 minutes. The forecasted time of travel for light rail – which offers no express service — is roughly 19 minutes for the same distance.[2]

Why are you planning to spend $1.5 billion in tax dollars to offer slower service than we already have for peak-hour transit commuters?

  1. The current scheduled time-of-travel for a trip from downtown Milwaukie to PSU on the #33 McLoughlin Boulevard local bus averages 19.8 minutes, with a range of 18-22 minutes. Both the #33 and the planned light rail line offer all-day local service at roughly the same speed, to the same neighborhoods, except that light rail will have fewer stops so it will serve fewer neighborhoods.

 

Why are you planning to spend $1.5 billion in tax dollars to offer local service that already exists?

 

  1. Average daily traffic on McLoughlin Boulevard is 46,000 vehicles.[3] This is not a particularly high traffic load. In comparison, the ADT on the Sellwood Bridge is approximately 30,000 vehicles, and that is a two lane bridge. McLoughlin Boulevard has four lanes for its entire length, and six lanes in some places.

In the key stretch that could be a potential traffic choke point – the subarea of Powell Blvd. to Tacoma Street, which is mostly two lanes in each direction – all McLoughlin Boulevard intersections except one meet current jurisdictional criteria for acceptable levels of service.[4]

This is precisely the reason why current bus service is a success. The widely-promoted assertion that McLoughlin Boulevard is gridlocked (and thus in need of the exclusive ROW that rail transit would provide) is a myth.

This point was made anecdotally in yesterday’s Sunday Oregonian in a feature story in the Homes and Rentals section, which highlighted a new, 18-unit subdivision of “small footprint” homes in Milwaukie. Developer Nick Stearns says, “I think Milwaukie is kind of a secret because commuting from almost any other city in the area takes much longer to get to and from downtown Portland.  I’ve come down here at 5:00 p.m. right at rush hour and it was 11 minutes from downtown.”

A recent home buyer there, Sam Salstrand, echoes that observation: “I work six days a week, and the commute was just killing me. This place is great because there’s an express bus, and it’s incredible!”

I wonder if Mr. Salstrand is aware that his wonderful express bus will be terminated in 4 years because you and other members of JPACT think he would be better off with a slow train?

  1. According to TriMet’s official “Fact Sheet” for this project, the opening of light rail service will mean 110 bus trips on the downtown transit mall will be removed. This is advertised as a “benefit.”

But to the thousands of transit customers who currently get off in city center, being forced to take a slow train that only goes to the south end of the PSU campus is highly inconvenient. For most of them, the re-routing will likely require a transfer to the Green line or a bus to get further north in city center.

Why are you planning to spend $1.5 billion to force the majority of current Milwaukie-Portland transit customers to get off at a college campus, when most of them are probably not college students?

  1. TriMet estimates in its December 2010 long-range financial forecast that in the opening year of 2015, the Milwaukie line will carry an average of 13,000 weekday “boardings.”[5] Of those, 4,500 will be former bus rides diverted to light rail.[6] Since each rider typically makes two “boardings” per day, the number of actual new transit customers will be around 4,250. So in construction costs alone, this project will cost more than $352,941 per new rider.

Why are you planning to spend $1.5 billion just to recruit 4,250 hoped-for new transit customers, when none of them will pay even one dime in direct user fees for the construction of this project? How is that a sustainable business model for transit?

Concerns about the new bridge

 

The new bridge is being advertised as a “transitway.” Unfortunately, the actual vehicle or passenger throughput of the bridge will be tiny, especially compared with real transitways operating elsewhere.

When the project opens in 2015, the bridge will carry six light rail trains at the peak hour plus bus service for three TriMet buses currently operating on the Ross Island Bridge (lines 9, 17 and 19). Those lines cross the Ross Island 16 times per hour (total) at the morning peak. So the total transit throughput on the new bridge will be 22 vehicles per hour at the peak (roughly equivalent to 28 buses).

The highest-volume transitway in the country is the Lincoln Tunnel Express Bus Lane (XBL) traveling from the New Jersey Turnpike into mid-town Manhattan. During the 3.75 hours the busway operates in the morning weekday peak, it carries roughly 62,000 passengers on 1,700 buses, or 453 buses per hour. So in comparison, the new PMLR bridge will carry only 6.2% of the vehicular throughput that the XBL carries per hour.

Moreover, because the XBL is a busway, not a rail line, it is flexible. Thus, at off-peak hours, it operates as a general purpose lane that can run in either direction, serving all manner of trucks, buses and cars.

It is fine that the new PMLR bridge will have excellent access for pedestrians and cyclists, but the exclusive use of the primary ROW for one light rail line and three buses is a gross misallocation of capital.[7]

Servicing the South Waterfront District

Among other things, the PMLR project is being promoted as a way to provide an eastern portal for the South Waterfront district. While it’s true that South Waterfront desperately needs additional options for people traveling there, currently 79% of all weekday person-trips to/from the district are made by private automobile (see below), not transit.

Trip Counts for the South Waterfront District

Average Weekday, 6:00 a.m. – 10:00 p.m.

All passenger-trips Market share of trips by mode
Auto/truck 17,023 79%
Streetcar 1,832 9%
Bicycle 1,076 5%
Bus 926 4%
Pedestrian 642 3%

 

Note: Research was conducted on various good-weather weekdays during the months of May-January, 2010-2011.

 

We know these are the travel patterns because last year we laboriously counted every trip to and from the district by the hour (including observed vehicle occupancies) to learn how the district actually works. Contrary to assertions made by local planners, the South Waterfront is primarily auto-based, including (and especially) the OHSU Health and Healing Center.

 

Since every downtown bridge is currently over capacity at the peak period, why are we building a new Willamette River bridge that will specifically exclude the dominant mode of travel both in the South Waterfront district and everywhere else?

PMLR as a means of promoting “Transit-Oriented Development”

PMLR is also touted as a so-called “catalyst for transit-oriented development.” If you actually believe the claims being made by planners, please give me examples of current light rail stations that serve as models for what you have in mind. Are there any on the Green Line, which is dominated by empty park-and-rides? Are there any in the 25-year-old Blue Line to Gresham? I assume you are not thinking of Rockwood Station, Ruby Junction, Gresham Station, 122nd street, Gateway, 82nd Avenue, or the Rose Quarter.

My own field research over the past decade shows that rail stations, usually funded in part with urban renewal dollars that are statutorily restricted to improving “blight”, usually create blight. If I’m wrong, please provide empirical examples of what you would consider “rail station success stories” on the east side.

Conclusion and Recommendation

I recognize that you are a passionate believer in the PMLR project. Unfortunately, you have been badly advised by the people who are supposed to know something about transit. Milwaukie light rail is destined to be the most wasteful transit project in Oregon history.

Fortunately, there is still a reasonable alternative: build the new bridge (which is needed anyway), but cancel the light rail project. TriMet is about 10 months away from having a signed FFGA with FTA, and the project may not even be approved by FTA due to events now taking place in Congress related to the budget.

The changing political climate in Washington, D. C. is actually your last lifeline to fiscal sanity. If you take it, you can preserve the existing high-quality bus transit service from Milwaukie to Portland, and spend the $750 million in committed local matching funds on dozens of other more important infrastructure projects, such as the Sellwood Bridge replacement.

It is not too late to make this change. We terminated the Mt. Hood Freeway at the last minute, and we can do it again with this project. All that’s necessary is a commitment to assessing the actual facts.

Sincerely,

John A. Charles, Jr.

President & CEO


[1] Portland-Milwaukie Light Rail Project FEIS, October 2010, p. 2-29

[2] Ibid, p. 2-28; TriMet bus schedules as of July 25, www.trimet.org.

[3] Portland-Milwaukie light rail project, Transportation Impact Results Report, October 2010, p. 4-12.

[4] Ibid, p. 4-12

[5] TriMet, Fall 2010 Financial Forecast, p. 52

[6] Ibid

[7] Note that the Portland streetcar is also expected to run on the bridge, but that will have to happen through a separate project; it is not part of the PMLR project.

 

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TriMet’s New Transit Bridge to the Last Century

On June 30 TriMet formally began construction on the new Willamette River Bridge for the Portland-Milwaukie light rail (PMLR) line. The bridge will be part of a 7.3-mile rail spur running from the Portland State University campus to a parking garage just south of Milwaukie on McLoughlin Boulevard. At a construction cost of more than $205 million per mile, this will be the most expensive transit project in Oregon history.

During the ground-breaking ceremony, economically illiterate politicians raved about how this project would “make Portland more competitive” (Portland Mayor Sam Adams), “reduce congestion on McLoughlin Boulevard” (Oregon Transportation Commission Chair Gail Achterman), and “show the rest of the country that this is not just spending, but a bridge to the future” (Congressman Kurt Schrader).

Any competent group of high school sophomores would know how silly these claims are. Building another rail line at a cost of $1.5 billion will make Portland less competitive than it would be otherwise, because the region has to allocate $750 million in “local funds” to match federal grants. All of that money could be spent on other more useful projects (like replacing the unsafe Sellwood Bridge) if light rail wasn’t constantly crowding them out.

Light rail has never reduced traffic congestion in the region and never will because it carries too few people. And contrary to the notion popularized by TriMet, the main corridor for this line – McLoughlin Boulevard – is not very congested, even at peak periods; it easily could be used for express bus service, which would travel at double the speed of light rail.

Finally, rail transit is not the future of cities. Passenger rail travel peaked in the Portland region and most other cities 100 years ago, and it will never come back due to the safety, speed and convenience of private auto travel.

Despite the vast expense, few people will ever benefit from Milwaukie light rail. TriMet estimates that in the opening year of 2015, the line will carry an average of 13,000 weekday “boardings.” Of those, 4,500 will be former bus rides diverted to light rail. Since each rider typically makes two “boardings” per day, the number of actual new transit customers will be around 4,250. So in construction costs alone, we will spend more than $352,941 per new rider.

I suspect that if we could locate these hoped-for riders and ask them how they’d really prefer to spend the taxpayer gift of $353,000, relatively few would choose a slow train to Portland.

The cost-per-mile numbers are staggering when compared with transit projects elsewhere. In 2002 Metro estimated that the same Milwaukie light rail project utilizing the Hawthorne Bridge would cost only $72 million per mile. The North Portland MAX line was built for $60 million per mile.

Express bus service is especially attractive in comparison. The Eugene Bus Rapid Transit line, known locally as the “Emerald Express,” cost $6 million per mile. The Los Angeles Rapid Bus system was implemented for a mere $335,000 per mile.

Because the LA Rapid Bus service is so economical, it has been implemented on 369 miles of routes in less than a decade. The service utilizes existing arterials and provides faster travel times than light rail by limiting passenger stops to no more than one per mile.

TriMet could have implemented a rapid-bus option on McLoughlin Boulevard years ago if good service was actually a priority, but it isn’t. In fact, during the past two years TriMet bus service has been cut by 14%, rail service by 10%, and the most recent new rail line – the Green Line to Clackamas Town Center – is operating 33% below planned-for levels. At certain times of the day, service is now down to one train per hour on the Green Line.

How many average taxpayers would vote to spend $1.5 billion on a slow train? We already know the answer. In both 1996 and 1998, the North/South light rail project to Milwaukie was on the ballot, and it was voted down each time. But those results clearly don’t matter to the seven members of the TriMet board, who are all appointed by the governor. They never have to answer directly to voters.

TriMet is taking a huge gamble with this project. The formal grant application for the $750 million in federal money has not even been submitted to the Federal Transit Agency; and local matching funds promised by Portland, Milwaukie and Clackamas County don’t exist. TriMet is building a transit-only bridge (no cars or trucks will be allowed) on pure speculation that more than a billion dollars will be forthcoming to finish the deal.

That speculation may prove fatal. Earlier this week the Oregon legislature revoked approval for $39 million in bond funding for another “iconic” boondoggle, the so-called Oregon Sustainability Center. Local proponents were shocked that the funding was pulled; they had assumed for years that the necessary tax subsidies for their green fantasy would be approved, and they were wrong.

TriMet could be building a bridge to nowhere. If it dies in mid-construction, it would be a fitting monument to the arrogance of the TriMet board.

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John Charles to TriMet Board: Understand Obligations Before Signing FTA Grant Agreement

Testimony before the TriMet Board of Directors

Regarding Resolution 11-06-38

Application for a Full Funding Grant Agreement with FTA for the Milwaukie Light Rail Line

June 8, 2011

In your consideration of this Resolution, please focus your attention on the second “Whereas” clause: “Federal assistance will impose certain OBLIGATIONS upon the applicant.”

I suggest you review and UNDERSTAND those obligations BEFORE you approve the resolution. Your predecessors approved a similar resolution for the Green MAX Line, yet TriMet is now operating that line at service levels 33% those originally planned do to financial problems.

How, specifically, will TriMet operate this line successfully when there is not even a plan to fully restore transit service over the next decade? I’ve sent you all a copy of my letter to FTA about the Green Line. No one from TriMet has responded or even acknowledged receipt of the letter.  I’ll take that as an admission that you don’t HAVE a response.

You have a fiduciary obligation to conduct proper due diligence. Have you accounted for the following factors?

  • The $25 million promised from Clackamas County is unlikely to be available when you need it, due to an initiative petition being circulated that would require a public vote on new urban renewal districts. The only option Clackamas County has to generate the $25 million is through Urban Renewal. We know from the recent county defeat of the small, $5 motor vehicle fee for the Sellwood Bridge replacement that Clackamas County voters would likely vote against Urban Renewal by a wide margin.
  • The legislature may begin requiring all units of government to begin making annual required payments into OPEP trust funds, which would be a $60 million hit to TriMet’s general fund.
  • What is TriMet’s “Plan B” if you lose the arbitration dispute with the ATU? The boad’s only public statements have indicated that loss of arbitration would result in more service cuts.  How will you operate the Milwaukie line successfully if you are reducing service for the 5th time in less than 3 years?
  • What happens if someone on the relevant Congressional oversight Committee decides that your Milwaukie FFGA application should be held up until such time that you restore service to the Green Line? You’re going to be building this line for an entire year on SPECULATION that the FFGA will be approved. What if it isn’t? What is your back-up plan?

Conclusion

You promised the legislature in 2003 that you would increase service if they gave you a payroll tax rate increase. They approved the tax rate increase, you took in $60 million in new revenue, and you cut service. You BROKE the promise.

You promised the FTA you would operate the Green Line properly if they gave you federal grant money. You BROKE the promise.

You promised the public last year that you would begin funding OPEB obligations in FY 12 at the rate of $1 million per year. You will BREAK that promise when you adopt the budget later this month, by only putting in $435,000.

This will be a dark day in the financial history of TriMet when you approve this resolution. TriMet’s “business model” is broken, and now you plan to make things much worse. I just want the record to show that you knew all of these risks when you voted YES.

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TriMet is violating its Full Funding Grant Agreement with the federal government for MAX Green Line

A letter sent yesterday to the regional administrator of the Federal Transit Administration by Cascade Policy Institute President John A. Charles, Jr. claims that TriMet is violating Sections 2(d) and 12(b) of its Full Funding Grant Agreement (FFGA) with the federal government on its South Corridor I-205/Portland Mall light rail project.
According to Charles, TriMet’s Green Line service is 33% below what the agency originally planned for, yet the FFGA “requires the transit agency to successfully operate the light rail line and the rest of the transit system after the project opens for revenue service.”

TriMet has repeatedly claimed that the reductions of service on the Green Line and throughout the entire system during the past two years are the result of declining revenues caused by the recession. However, Charles points out that since TriMet’s payroll tax rate was first increased by the legislature in 2003 (and implemented in 2005), TriMet’s annual payroll tax revenues have increased by 34% and total general fund dollars by 44% (inclusive of revenue expected in the draft FY 12 budget).

Moreover, during the 2005-2010 period, TriMet took in $60.3 million in new tax revenue but spent only $13.9 million on operation of the Green Line, in violation of its contract with the FTA.  The Green Line was subsidized with $345.4 million in federal capital funds.

Charles requests that the FTA take steps to enforce the terms of the contract by requiring that TriMet operate the Green Line at 100% of the originally planned service levels, “or pay back one-third of the total federal grant funding used for capital construction.”

Cascade is also asking that “until one of these actions takes place, FTAwithhold all capital funding for future TriMet rail projects, including but not limited to the $1.5 billion Milwaukie light rail line and the $932 million rail extension to Vancouver, WA.”

Click here to read the full letter to FTA.

 

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Ideas Matter, and So Do Institutions

When Cascade was founded in 1991, I was in my 12th year as executive director of the Oregon Environmental Council. Before that I had worked for a national environmental group based in New York. I was an unlikely candidate to ever lead a free-market think tank.

While I was not immediately aware that Cascade had been formed 20 years ago, I was aware that my own views about environmental protection were changing. The large sources of smokestack pollution I had seen as a boy growing up in northern New Jersey were well-controlled by the 1990s. Chronic urban smog, largely the result of auto emissions mixing with other chemicals in the presence of sunlight, had been permanently eliminated in most major cities due to dramatically improved auto technology. With virtually all pollution trends moving downward, things were so much better that environmental activists were increasingly looking for things to do just to keep busy (though they would never admit that).

In 1992 a friend suggested I take a look at Reason magazine, the journal of policy and culture published by the Reason Foundation. Becoming a subscriber opened my eyes to new ways of thinking about how we organize ourselves as a society and prompted me to think critically about natural resource policy. At roughly the same time, Oregon economist Randal O’Toole began publishing Different Drummer, a journal for “libertarian environmentalists.” I had a hard time even understanding that phrase, but I had followed Randal’s work for over a decade (pioneering the use of economic analysis of public land timber sales) and had a lot of respect for his thinking. Different Drummer regularly showed how large, intrusive government inevitably created incentives that resulted in both economic inefficiency and environmental destruction.

In 1994 Cascade Policy Institute sponsored its first Better Government Competition (BGC), which it billed as a “statewide citizens suggestion box” for ideas about how to reduce the size of government or to improve the delivery of government services. For some random reason I received a copy of the announcement, and since there were cash prizes available (always a good incentive), I carefully read it over. After thinking about it I submitted an idea related to electronic tolling of roads and variable (peak-hour) pricing.

My concept was not named one of the 10 finalists, but I enjoyed writing it and it introduced me to Cascade’s work in a more personal way. As I received announcements about CPI events, I began attending just to check out this whole free-market policy scene. I went to a Cascade lunch featuring José Piñera, the world’s leading authority on converting Social Security programs to asset accounts. That was quite a refreshing presentation.

I also attended a small meeting where I was introduced to Ted Kolderie from Minnesota, the father of the charter school movement. The meeting was facilitated by Cascade, though CPI’s co-founder Steve Buckstein now admits he thought the whole charter school concept was never going to work. So much for predictions!

I also went to a highly entertaining CPI presentation by Marshall Fritz, who made a compelling argument for a complete return of education services to the private sector on a voluntary, market-driven basis.

By 1995 it had become clear to me that the environmental movement was no longer focused on protecting the environment; it had been taken over by people who were much more interested in simply controlling people’s lives. Oregon land-use planning in particular had become a nightmare that was destroying the lives of thousands of people, for no reason other than the planner obsession for control. And federal forest regulation in the wake of the Spotted Owl litigation had placed thousands of Oregon workers on the unemployment list, while turning federal forests into museums that we could look at but not touch. I knew that my time at the Environmental Council was drawing to a close.

In 1996 Cascade sponsored its second BGC, and I entered it again. This time I suggested selling the Elliott State Forest and placing the proceeds (estimated at the time to be $880 million or more) into the Common School Fund to finance a school voucher program. I was named one of the 10 winners of the 1996 competition (apparently the judges were better that year); and in the process of converting my concept into a business plan, I got to know the early CPI staff – Steve, Tracie Sharp, Kurt Weber and Patrick Stephens. We had fun visiting in the office and at events, but it never crossed my mind that I might eventually work there.

However, in the spring of 1996 I announced my resignation from OEC, effective October of that year. I had pushed the OEC board as far as I could in the direction of free-market environmentalism, but they would not go any further. And my public questioning of land-use regulation and the Portland obsession with light rail made it clear that we needed to part company. I had no master plan for my next step and no job offers, but I knew it was time to leave.

In November and December of 1996, I began enjoying being out of the work force for the first time in my adult life and occasionally dropped by the CPI office to chat. On one of those visits, Steve engaged me in a long conversation (which turned out to be my job interview), and then asked if I would like to work full-time at Cascade to promote a property rights-based approach to environmental policy. I didn’t really know what it would mean to be an analyst with CPI, and I’d have to take a pay cut from my previous job, but I decided that working at Cascade would be fun. And professionally, it was a relief to know that Cascade was a place where I would never be too radical when it came to limiting the scope of government!

So now I’m in my 15th year at Cascade. Steve works for me (where he is happy to be out of management), and two of the three founding board members – Dave Gore and Bill Udy – are still serving. Our annual budget has gone up from $67,000 to $1.1 million, and our staff includes 12 people. We’ve evolved from the traditional “think tank” role of publishing papers and hosting speakers; we’re now very active in state legislative affairs and routinely send our analysts around the state to engage people and encourage their activism at a grassroots level.

Among think-tankers it’s common to hear the phrase “ideas matter,” and that’s true. But ideas by themselves rarely change society. We also need social change agents. We need institutions that can nurture ideas, market them, engage potential allies, and help tear down the various Berlin Walls that separate selected fields of state-dominated policy (such as the monopolies in education, highways, transit and public lands) from the marketplace. We need organizations that can attract unlikely supporters – like former leaders of environmental groups – into a growing parade for freedom.

Now in its 20th year, Cascade Policy Institute has changed my life, by taking ideas espoused by Madison, Jefferson, Friedman and others and making them policy-relevant to contemporary times. Cascade’s stated mission – to promote “individual liberty, economic opportunity and personal responsibility” – is one that I am passionate about. We are changing lives, one step at a time, and it is very rewarding to play a role in this process.

Cascade still has a lot of work to do, but we are gaining new supporters almost every day. The freedom parade is growing, and we appreciate everything you have done to make this happen.

 

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Testimony regarding HB 3605: Requires Oregon Governments to Fund OPEB Benefits

Testimony of John A. Charles, Jr., regarding HB 3605: Requires Oregon Governments to Fund OPEB
Before the House Rules Committee, May 9, 2011


My name is John Charles and I am President & CEO of Cascade Policy Institute, a non-profit policy research organization. Cascade supports HB 3605 and believes it can be one of the most significant bills of the session.

 

HB 3605 grew out of concern regarding the unfunded, long-term public sector liabilities associated with “Other Post-Employment Benefits”, or OPEB. These benefits include things other than pensions, such as dental, vision and medical coverage.

 

All across the country, state and local governments are discovering that many of the commitments made to public employees about retirement benefits require funding that those units of government don’t have. Consequently, most governments are failing to place adequate reserves in trust funds to pay for future obligations. Instead, they are paying only what they owe current retirees, while allowing future obligations to quietly grow.

 

Up until recently, taxpayers and even most elected officials had no way of knowing how bad the problem was. However, in 2004 the Governmental Accounting Standards Board (GASB) adopted Statement 45, which requires that all units of government undertake a valuation of their OPEB obligations and state those obligations in annual financial reports. Implementation of GASB 45 was phased in during 2007-2009, and all units of government must now comply.

 

OPEB audits must calculate liabilities for all current and future retirees, amortized over a period not to exceed 30 years. Based on these calculations, actuaries determine what the Annual Required Contribution (ARC) would be if each entity paid for current OPEB benefits as well as a pro-rated share of future obligations.

 

However, the ARC is not actually mandatory, despite use of the word “required”; governments must publish information about net OPEB liabilities, but are not required to create OPEB trust funds or pay anything into trust funds. That remains a policy choice of each individual government.

 

Additional background information about GASB 45 is attached on the yellow sheet.

 

The Oregon Problem

 

A review last year of audited financial statements for 100 randomly-chosen Oregon governments (green spreadsheet, attached) by Jacob Szeto of the Oregon Capitol News (an affiliate of Cascade Policy Institute) showed that there are more than $3 billion in OPEB liabilities. Of that total, only 7.8% is funded. Most governments have no money set aside in OPEB trust funds, as can be seen in the “Funded Ratio” column on the green spreadsheet (3rd column from the right).

 

By way of comparison, at December 31, 2010, Oregon PERS was funded at roughly an 88% level, plus the total obligations are known. For OPEB liabilities, the level of under-funding is much worse, and the total obligations are not known. If there are $3 billion in unfunded OPEB liabilities from 100 units of government, one can only speculate what the total is for the roughly 1,700 units of government in Oregon.

 

Reliance on a pay-as-you-go system means that long-term unfunded liabilities will likely grow, creating cash flow problems for future managers, especially as large numbers of baby boomers begin retiring.

 

The Policy Solution: HB 3605 takes a very simple approach to this problem by requiring that all units of government in Oregon make Annual Required Contributions (ARC) into OPEB trust funds, as determined by outside actuaries.

 

This is not a new concept. ORS 238.420 already requires an ARC for the Retirement Health Insurance Account (RHIA), which is a multi-employer OPEB system administered by PERS.  That law states in part:

“The Retirement Health Insurance Account shall be funded by employer contributions. Each public employer that is a member of the system shall transmit to the board such amounts as the board determines to be actuarially necessary to fund the liabilities of the account. The level of employer contributions shall be established by the board using the same actuarial assumptions it uses to determine employer contribution rates to the Public Employees Retirement Fund. The amounts shall be transmitted at the same time and in the same manner as contributions for pension benefits are transmitted under ORS 238.225.”

 

 

If you look on the green spreadsheet, you’ll notice that RHIA (listed as #2 on page one) has a funded ratio of 41.9%. It is one of the very few entities with any money in a trust fund. Although the agency has unfunded actuarial liabilities of $297 million, that amount represents only 3.5% of the covered payroll, so the risk is minor.

Some people may ask if this bill is an “attack” on organized labor, or government itself. The answer is “no.” It is simply an attempt to ensure that promises made to employees about retirement benefits are kept. If specific units of government will not have the money to keep those promises, then managers should have an adult conversation with their employees NOW, not at some unknown time in the future when the crisis explodes.

 

Note that HB 3506 does not tell governments how to respond to an OPEB funding problem; it simply requires them to comply with the ARC. If there is no way to make sufficient cash payments into OPEB trust fund accounts now, then that problem needs to be addressed, and there are probably thousands of ways that individual OPEB liabilities could be reduced.

 

One of the most common methods is to change the vesting period for post-employment benefits. If, for instance, employees now have only a two-year vesting period to receive retirement medical benefits, and the vesting period were changed to six years, the OPEB liability (as calculated by the actuaries) would go down, thus the ARC would go down.

 

For employees who actually work longer than six years, this would have no effect on their benefits, so it is a relatively painless way of addressing the OPEB funding problem.

 

Other potential solutions would depend on the specific nature of employee contracts at the various governments.

 

Poster Child for HB 3605: TriMet

 

A quick glance at the attached spreadsheet will show that TriMet is #1 in unfunded liabilities, by any measure. In fact, the agency is not just #1 – it is an outlier so extreme that it begs some form of explanation. A brief discussion may assist legislators in understanding the need for HB 3605.

 

In 1994 TriMet changed the basic template of its union contract, incrementally lowering the age of retirement and dramatically increasing post-employment benefits. The cost of these obligations steadily accrued each year, but TriMet did not create a trust fund to pay for them. Since GASB 45 did not yet exist, almost no one outside the agency knew about this ticking time bomb.

 

In 2008 TriMet adopted GASB 45, and the district’s outside audit showed, for the first time, a “schedule of funding progress” for OPEB. The Unfunded Actuarial Accrued Liability (UAAL) for OPEB as of January 1, 2008 was $ 632 million.

 

In the 2010 TriMet budget document, the narrative to the Board stated, “TriMet needs to begin to take steps to partially fund a retiree-medical trust to assure a funding source for retiree health benefits, which have already been accrued but are not yet funded.” That was a clear and concise statement of need — yet the adopted budget for that year (FY 10-11) included zero funding for the OPEB trust fund.

 

In the very back of that document, on page 241, TriMet presented a revealing 10-year financial forecast. A copy is attached (the blue page). In that forecast, TriMet predicted that it would finally begin funding the OPEB trust with a token payment of $1 million in 2012, followed by identical payments for the next four years (line U on the blue sheet). The agency did not anticipate getting serious until FY 2019, when it projected an OPEB payment of $10 million.

 

Five months later, TriMet’s 2010 audit was released. The audit showed that in just two years the OPEB liability had ballooned from $632 million to $817 million, and all of it was unfunded.

 

Last month, TriMet released its draft budget for FY 11-12. The narrative is now much more evasive about the subject of OPEB. On page six, it simply states, “The FY 12 proposed budget reflects pay as you go funding of OPEB costs for retirees, and an initial deposit to an OPEB trust to begin funding future retiree OPEB benefit.” It does not say how much.  Also, the 10-year financial forecast page has been deleted.

 

If you search long enough, however, you can finally find on page 45 that the promised payment of $1 million has been downgraded to $410,000. Meanwhile, the OPEB liability keeps rising by the month, and is now probably in the neighborhood of $900 million.

 

Like high school students who keep telling their parents that they will start on that big term paper “tomorrow”, the TriMet Board has been procrastinating for 17 consecutive years on OPEB. This is setting up both employees and future board members for a massive meltdown later this decade.

 

It is important to note that TriMet’s OPEB problem is not the result of declining revenues. To the contrary, TriMet has been one of the few units of government with rising revenues, thanks in part to the legislature.

 

In both 2003 and 2009 the legislature authorized increases in the regional payroll and self-employment tax for TriMet (and Lane County Transit). TriMet began implementing the tax rate hike in January 2005, and will continue to implement it by raising the rate by 1/100th of a percentage point every year through 2024.

 

The chart below shows that the payroll tax increase, combined with substantial increases in passenger fares and federal grants, has led to both operating and capital funding increases that most local governments could only dream of.

 

TriMet Financial Resources, 2004-2012[1]

(millions)

 

FY 04/05 FY 08/09 FY 09/10 FY 10/11 (est) FY 11/12 (budget) % Change 04/05-11/12
Passenger Fares $   59.49 $   90.10 $   93.73 $   97.97 $103.80 74.5%
Payroll tax revenue $171.23 $209.10 $207.10 $217.20 229.10 33.8%
Total operating resources $308.77 397.24 $423.50 $424.20 $443.21 43.6%
Total resources $493.72 $888.35 $809.75 $763.66 $1,004.44 103.44%

 

TriMet will likely respond by stating that the purpose of the payroll tax rate increase was to pay for the “operating cost of new service”, not OPEB liabilities, which is true; but as the chart below illustrates, the increased service never materialized. In fact, service has been steadily dropping for the past three years:

 

Service Trends for TriMet Since the Payroll Tax Rate Increased in 2005

Fixed Route Service – light rail, bus, commuter rail[2]

 

 

March 2004 March 2006 March 2008 March 2010 March 2011 % Change
Peak vehicles 620 602 611 627 599 -3.4%
Service hours 147,138 143,308 144,912 143,089 132,777 -9.8%
Vehicle miles 2,684,606 2,620,246 2,546,365 2,531,041 2,357,214 -12.2%

 

 

To summarize, the agency hit a gusher of cash in the past seven years, but proceeded to cut service by 12% while dramatically increasing its unfunded OPEB liability. This is a financial disappearing act that would make Penn & Teller envious.

 

While TriMet is an extreme form of the management problem HB 3605 attempts to address, the challenge is the same across the board: promises are being made at many governments for post-employment benefits that probably cannot be kept. The time to deal with fiscal reality is now. The legislature should step in to require that modest steps be taken based on a 25-year amortization schedule.

 

It is rare that legislators have a chance to enact laws that will demonstrably make a positive difference for future generations. This is one of those cases.

 

Thank you for your consideration.


[1] TriMet budget documents, various years, 2004-2011

[2] TriMet monthly performance reports, 2004-2011

 

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On the CRC Mega-Project: Differing Visions, Shared Sense

The two of us may be strange bedfellows. Over the past twenty years, we’ve disagreed about many issues, including transit investments, land use laws and the underlying role of government. But recently we were both in Salem criticizing HJM 22, a bill asking the federal government to spend over a billion dollars on the ill-conceived “Columbia River Crossing” mega-project.

We each bring decades of experience in transportation policy to the table. Among the hundreds of projects we’ve seen, the current CRC proposal stands out as a doozy, throwing staggering amounts of money at a wasteful, ineffective plan.

Others, including the project’s own Independent Review Panel, have written about the huge costs to the taxpayers and the state, about the risks of cost overruns in the hundreds of millions of dollars, and about the project not fixing congestion but merely moving it from Vancouver to the I-405/Rose Quarter area. Those are serious problems.

As transportation experts from very different perspectives, we diverge on other flaws of the project. However, we agree on several actions Oregon should take instead of building the highway departments’ current bloated plan:

– Build an additional bridge. Having only two road crossings of the Columbia in the greater Portland area doesn’t make long-term sense. Clark County is an integral part of the region. We should be increasing the number of crossings of the river, whether the new bridge be a local or highway bridge, and whether it includes light rail or not.

– Retain the existing bridges. The current pair of I-5 spans have decades of life left in them. Spending $74 million to demolish them and build something in their place is wasteful.

Use tolling. A well-designed tolling system could fully finance the cost of a properly designed and scaled new bridge.

– Increase the legislative oversight of mega-projects. ODOT and the Oregon Transportation Commission, rather than the Legislature, have historically guided and decided on projects. But the CRC mega-project’s bill of $450 million or more to Oregon taxpayers demands enhanced accountability measures.

– Strategically focus taxpayer investments in seismic upgrades. Oregon’s Bridge Inventory doesn’t list the I-5 bridges among those most threatened by earthquakes. We should be concerned about the impact of earthquakes. But we should examine all of Oregon’s infrastructure, from schools and bridges to water and sewer lines, and figure out which are the highest priority to reinforce or rebuild.

– Fix what we have before creating more money sinkholes. Our backlog of maintenance for existing roads and bridges is large and includes hundreds of structurally deficient bridges. We should make sure we can afford to maintain the infrastructure we have before building more.

Every independent review of the CRC mega-project has found major flaws. While some flaws can be fixed, the current plan to build five huge highway interchanges, tear down existing bridges, and build a new bridge is simply too costly and too risky. It won’t get us what we want, but it will stick us with a huge bill. The legislature should demand we do better.

The piece was co-authored by Bob Stacey. Bob Stacey is the former Executive Director of 1000 Friends of Oregon.

 

 

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Testimony of HJM 22: Regarding Columbia River Bridge Project

Testimony before the House Transportation and Economic Development Committee on March 30, 2011

I have followed the CRC process quite closely for the past decade. Based on this experience, I offer the following comments about HJM 22:

This is a random request for a random project. There is no evidence that the CRC is part of a strategic transportation vision for the Portland region. Unless and until ODOT comes up with a plan to address related congestion problems and the need for new capacity at the I-84/I-5 interchange, I-405, the Marquam Bridge, and the West Hills Tunnels, the CRC will just absorb vast resources while offering few public benefits.

There is no price tag listed and no specific amount requested. It’s difficult to see how anyone in Congress would take this seriously when the only message seems to be, “more, now.”

 

There needs to be a coherent rationale for the use of tolls and the setting of toll rates. I am not opposed to highway tolls per se; it’s a time-honored method of financing new infrastructure. In fact, I have no doubt that within the next 20 years much of Oregon’s highway system will be converted to an electronic tollway (with variable rates in dense urban centers), and I look forward to those changes.

But unfortunately the most obvious interest in tolling on the CRC has been to use toll revenue as a local match for federal funding, especially for the uneconomic light rail[1] portion. That is the wrong use of toll revenue and will generate a much-deserved rebellion among highway motorists. If the project is really cost-effective, it should be 100% financed by local user fees, and the toll rates should be set to generate adequate cash flow for debt service as well as to vary by time-of-day/direction-of-travel to ensure free-flow driving conditions at all times. I testified before the CRC tolling subcommittee on three different occasions last year making these points, but to this day the proponents of tolling cannot explicitly state a principled rationale for the use of tolls.

The light rail element is a total waste of money. Vancouver transit riders are express bus commuters and will have no interest in a slow train. At a capital cost of $321.27 million mile, this will be the most expensive transit project in the history of Oregon. By comparison, the earlier portion of the MAX Yellow Line (Interstate Avenue) was constructed for about $60 million per/mile. That project was also a mistake; there is no policy reason to magnify the error at 5 times the cost.

Moreover, neither C-TRAN nor TriMet is planning on putting any of their own money into construction of light rail; both agencies expect everyone else to pick up the tab[2]. One can reasonably conclude that if the two transit districts don’t think light rail is worth one dime of their own funds, it is worth even less to the rest of us.

The mega-bridge concept is doomed to fail under any scenario. The CRC project epitomizes the old-guard, “build up, not out” approach beloved by land-use planners. They oppose new bridges because they imagine that more bridges would encourage more driving. But reality is passing the Oregon system by. Between 1998 and 2006, even with no new highways, the percentage of jobs located within 3 miles of downtown decreased from 27% to 23%. The percentage of jobs located more than 10 miles from downtown increased from 24% to 29%. The future of employment and housing is on the periphery of Portland; thus a massive highway structure on Hayden Island will be irrelevant to many motorists and force them to drive out of their way to cross the river.

The more appropriate response would be to build multiple bridges, much smaller in scale, to accommodate the increasingly scattered travel patterns of the next three decades. It’s interesting that Portland has 10 bridge crossings over the Willamette River and only two are highways; the rest are arterials. Yet no one would seriously suggest that Portland rip out the eight smaller bridges in order contain “bridge sprawl”; everyone recognizes that with more bridges, people drive less because they have more direct avenues to travel on.

The City of Pittsburgh, comparable in size to Portland and located along three major rivers, has 29 bridge crossings, and only 5 are connected to Interstate Highways. The rest are small-scale, two- and four-lane bridges handling local traffic.  Since the I-5 Interstate Bridge is not structurally flawed, it seems evident that Oregon should leave the I-5 Bridge in place and look at adding 2-3 smaller bridges upriver and downriver on the Columbia. In particular, there needs to be a way to get Washington-bound traffic originating on the west side of Portland off of HW 26 by creating an alternative route north to HW 30 from Beaverton/Hillsboro, and then over the Columbia. That would reduce congestion problems on HW 26, I-405, the Fremont Bridge, and I-5 north – which the currently proposed CRC will never do.


[1] Consolidated Appropriations Act, 2010, Section 173 (H.R. 3288, December 9, 2009). “Hereafter, for interstate multi-modal projects which are in Interstate highway corridors, the Secretary shall base the rating under section 5309(d) of title 49, United States Code, of the non-New Starts share of the public transportation element of the project on the percentage of non-New Starts funds in the unified finance plan for the multi-modal project: Provided, that the Secretary shall base the accounting of local matching funds on the total amount of all local funds incorporated in the unified finance plan for the multi-modal project for the purposes of funding under chapter 53 of title 49, USC and title 23, USC.”

[2] CRC Finance Plan, September 2010: “The forecast assumes no TriMet funding of CRC capital costs”, p. 3-27.  “No linkage is required between the CRC LRT capital plan and the capital expenses included in the agency-wide systems plan because the capital finance plan for CRC LRT does not include any C-TRAN revenues”, p. 4-22.

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Take a Gamble on the Train

Steve BucksteinQuickPoint!

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by Steve Buckstein

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The Oregon state legislature has used the state lottery as an almost endless source of funds for various projects over the years. When gambling doesn’t generate enough revenue for current wish-lists, legislators can authorize the sale of bonds repayable from future lottery revenue. According to official state documents, principal and interest remaining to be paid on lottery bonds is $1.6 billion, and the bonding capacity is virtually stretched to its limit. If they borrow much more they may not be able to repay the bonds.
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John Charles letter to the Oregon Transportation Commission

February 14, 2011

Oregon Transportation Commission

Salem, OR  97301

RE: Feb. 16th meeting, Agenda Item F – Flexible Fund Allocations

Dear Commissioners,

I am writing to express my opposition to the plan to appropriate $13 million of scarce flex funds to the Milwaukie Light Rail project. The reasons for my opposition are as follows:
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