So was T-REX really under budget?

When RTD closed out the books last week on its half of the T-REX multimodal expansion along Interstates 25 and 225, it finished with $3.7 million left over out of its $879 million share of the $1.67 billion budget it split with the Colorado Department of Transportation.

Since the project was finished 22 months earlier than the original schedule, this forms the basis for RTD’s claim that the Southeast Corridor, which extended light rail from Broadway Station to Lincoln Avenue in Douglas County and Parker Road in Aurora, was completed under budget and ahead of schedule.

CDOT makes the same claim for its highway portion of the project, which added lanes to both freeways, reconfigured the “Full House” interchange of I-25/225, added Intelligent Transportation Systems for better traffic management, replaced all of the out-of-date bridges and fixed the drainage problem that caused storm flooding under the Logan Street overpass. CDOT finished $8 million under its $790 million budget.

Skeptics cry foul. They point out that the Major Investment Study on the Southeast Corridor, completed in 1997, said the light rail project would cost $445 million. They want you to think RTD went double over its budget.

The skeptics are either uninformed or deliberately misleading you. The project indeed came in under budget, for both RTD and CDOT.

The $445 million projected cost of the southeast corridor light rail outlined in the 1997 MIS was not a budget. As it states specifically in the document, it is in 1995 dollars. Patient drivers will recall that the project was built between 2001 and 2006.

It is intellectually dishonest to portray the estimated costs in an initial study document as some sort of final budget, because the costs are stated in constant dollars – what it would cost if it could all be built right then and there. That’s because no one knows in the beginning when, or whether, the project can be built so it’s impossible to set up an actual budget. You simply don’t know in what year you’ll have to buy the steel or concrete or labor. All you can do is quantify how much of each item you think you’ll need, and state its cost at the time.

In this case, it’s even worse. The 1997 MIS stated costs in 1995 dollars.

Projects are not paid for in “constant dollars,” they are paid for in “year-of-expenditure dollars.” They are not the same thing. When it’s time to make an actual budget, estimators take the unit quantities for each piece of work, determine in what year it is needed and then estimate inflation trends to come up with an actual “year of expenditure” cost.

In the case of T-REX, trying to compare the estimate of light rail cost when it was stated in 1995 dollars to the budget for when it actually would be built between 2001 and 2006 is, simply, bad math.

Skeptics are feeding you an apple and claiming it’s an orange.

One other factor makes the comparison with the early figure bogus.

The MIS outlined a different project. The Southeast Corridor light rail plan in 1997 had only 10 stations in the first phase; the T-REX project advanced the Yale, Orchard and Dayton stations from a later phase and incorporated them into the opening day plan.

But the biggest difference between the 1997 MIS and the 1999 EIS wasn’t with RTD, it was with CDOT.

When Bill Owens became governor in 1999, he ordered up a new look at the highway improvements that the MIS outlined for I-25 and 225. Because CDOT hadn’t been able to identify any source of money to do a full blown widening of the freeways, the 1997 study had no added through lanes at all. It consisted only of some shoulder widening for breakdown and emergency access, auxiliary lanes between the ramps between Arapahoe and Orchard roads, the braided ramp separating traffic entering northbound at Belleview Avenue from the traffic exiting onto I-225, and the drainage work at Logan.

Total cost of the highway work in the MIS was only $57 million.

But Owens had a plan to get the money CDOT needed to widen I-25. In November 1999, the state put the TRANS Bonds measure on the ballot to ask voters statewide for borrowing authority to issue up to $1.7 billion in bonds to accelerate work on up to 28 vital transportation corridors around the state, with the lion’s share of the money earmarked for T-REX.

The measure won, and CDOT was able to join RTD in a much larger project that added four full lanes south of Belleview and two lanes north of there and along I-225. It added to overall right-of-way costs for the wider building envelope.

So since CDOT’s budget ended up at $790 million, would critics say the costs ballooned 14-fold? Well, maybe they would, but they’d be wrong. The scope of work is what ballooned, and rightly so given the much safer and congestion-free segment of highway that resulted.

Now, it doesn’t matter to me whether you’re going to be for or against a highway project or a transit line. What does matter is being straight about it either way.

In RTD’s case, at the end of the environmental impact study, the projected cost of the light rail project was $879 million. And that’s where it ended up – minus $3.7 million.