Construction work on RTD’s West Corridor light rail is well underway in Denver’s Dry Gulch Valley here, where an abutment for the Tennyson Street pedestrian bridge is being built.

RTD says it is already implementing changes from a “lessons learned” examination of the FasTracks program, including a decision to no longer use the contracting method it is currently employing on the only rail project now construction, the West Corridor light rail.

As a result of that choice, it is likely that all of the remaining FasTracks corridors, including extensions to existing light rail lines, will be done through the Design-Build method that RTD and partner, the Colorado Department of Transportation, used for the successful T-REX transit-highway expansion that was built from 2001 to 2006 on Interstates 25 and 225.

You can read and download your own copy of the RTD FasTracks 2009 Lessons Learned Report here.

You can also view the Power Point presentation made Tuesday night to the RTD board as a .pdf file here.

The report summarizes the results of RTD’s internal review of nine areas of the FasTracks program: Planning and Environmental Studies, Cost Estimating, Revenue Forecasting, Railroad Right of Way, Property Acquisition, Management, Processes and Procedures, Project Delivery and Communications.

“The whole intent of the exercise is to examine what we’ve done, acknowledging the things that have gone well and which we will continue to do, and determining those things that have not gone well and what we will do differently going forward,” said Pauletta Tonilas, FasTracks’ spokeswoman.

View a slide show of the construction along FasTracks’ West Corridor.

To expand to full screen and read the captions, first click on the “play” button and then click on the box that will appear at the lower right corner — with the four little arrows pointing outward. When the full screen appears, click on “Show Info” at the menu bar on the top right.

It is in the areas of Cost Estimating and Revenue Forecasting that RTD has taken most criticism. While the same recessionary impacts on revenues and volatile construction cost increases that are responsible for the lion’s share of FasTracks’ difficulties have also impacted lower-profile public works projects, the long-term nature of FasTracks’ 12-year horizon has exacerbated the problem and made a solution more difficult. RTD’s original figures have been deep-sixed and the available revenues no longer cover all of the projected costs by the original 2017 completion date.

In some cases, the changes mean long-term lower costs but higher upfront outlays. For example, in the original plan the North Metro heavy-rail commuter corridor was planned to use diesel powered passenger cars. But during the environmental study, electrical powered heavy rail cars were chosen. This requires a higher initial construction cost to electrify the 18-mile corridor through Commerce City and Thornton, but promises to yield operating cost savings over the life of the project due to higher diesel fuel costs compared with electricity.

But in the meantime, it burdens the capital construction program with higher costs.

FasTracks’ original projected cost, developed in 2002 and 2003 and presented as a package to voters in 2004, was $4.717 billion. At the time, RTD and outside parties that reviewed the financial plan figured there was excess financial capacity to cover that.

Since then, however, following a series of annual program evaluations that RTD does to reset the baseline costs and revenue estimates for FasTracks, the situation has reversed. The estimated costs now exceed available revenues by $2.2 billion, with an estimated $6.9 billion project cost but only $4.7 billion available through 2017 to pay for it.

RTD says it has to use a more long-term projection of revenues than other public agencies with smaller capital projects because of the lengthy nature of the FasTracks build-out.

“To project out over 20 to 30 years is not an exact thing,” Tonilas said.

For FasTracks, RTD used the same methods of projecting costs and revenues as it did for its first four light rail projects, which all were done successfully and within those projections. Forecasting revenues is crucial to determining the level of capital construction that can be financed through long-term bonds, in addition to having to pay for operations and maintenance over the years.

RTD uses forecasts from state economists, particularly the Colorado Legislative Council, for its short-term revenue projections. But for FasTracks, which included construction and cash-flow projections for at least 15 years beyond the time the study was done, RTD settled on averaging long-term forecasts – at first deciding that sales tax revenues would increase 6.2 percent per year from 2012 and beyond. Its current forecast for sales tax increases ranges between 4.78 percent to 5.05 percent from 2013 through 2035.

The recession has changed all that, and RTD will come up with a more conservative projection method in its next annual evaluation. Currently, for long-term projections, it uses metro area population growth estimates from the Denver Regional Council of Governments combined with projected increases in the local Consumer Price Index, a key predictor of sales taxes.

In the Project Delivery area, RTD says it learned not to use again the method now in use on the West Corridor construction project, Construction Manager/General Contractor. It required lengthy and difficult negotiations toward the end while trying to reach a guaranteed maximum price contract.

For the West Corridor, RTD selected Denver Transit Construction Group as the CM/GC in May 2006 from among four bidding teams. DTCG is a partnership of Herzog Contracting of St. Joseph, Mo., and Stacy and Witbeck Inc. of Alameda, Calif.

For two years, DTCG worked alongside RTD’s consultant design team of David Evans and Associates as a construction manager to nail down the details of schedule, cost and other elements, then negotiated a guaranteed maximum price contract of $343 million to build it as the general contractor.

The two years of construction management services helped to identify cost and schedule savings. But RTD says now, in hindsight, that the process took too long “and should be avoided.”

Despite that finding, construction on the West Corridor is proceeding pretty much on the original schedule shown to voters in 2004. It is scheduled for completion in 2013.

In the 2004 FasTracks plan, the original schedule showed West Corridor construction starting this year.

Tonilas said remaining corridor projects will use the Design-Build model that was used for T-REX or the more involved Design-Build-Finance-Operate-Maintain method that privatizes significant portions of the costs, financing and operations. That is the method being pursued for the Eagle P3 initiative, RTD’s name for the packaging of the airport-bound East Corridor and the Gold Line to Arvada and Wheat Ridge, along with construction of a commuter rail maintenance yard and facility and other elements.

Later this month, RTD will release a request for proposals to three bidding teams of prospective concessionaires on this initiative – called Eagle as a combination of East and Gold, and P3 because it is a public-private partnership. The selected team would finance the project, reducing the upfront amount of money RTD needs to build the lines, although potentially increasing the total payout over the 40-year term of the agreement through annual payments to the concessionaire

To close the funding gap, RTD’s alternatives include asking voters for another tax increase, extending the completion year as long as 2034 to build everything with the available revenue stream, or building only what can be done by 2017 and ending the program.

The RTD board also has looked at variations on those three basic approaches, and is leaning toward asking voters for another tax increase in 2010. Metro mayors had also urged another tax increase vote, although unlike the 2004 vote, it is not unanimous among the mayors this time around. Mayors in Littleton and Parker have voiced opposition.

Prior to any vote, RTD hopes to complete all of the environmental studies – they all are nearing completion – and preliminary engineering and design so that it can at least approach voters with all corridors ready to be put out to bid by the end of 2010.