Simulation shows the FasTracks East Corridor commuter rail station planned to adjoin the DIA terminal's south side.

Officials from Thornton and other north metro communities oppose RTD’s intention to go ahead and build the FasTracks line to Denver International Airport if other corridors that were promised rail service get short-changed by the program’s current deficit.

Mayor Erik Hansen, flanked by two other elected officials and a financial consultant hired by their recently formed group, the North Area Transportation Alliance, said during a media briefing on Monday that RTD needs to outline – right now – what it would do in a “Plan B” for FasTracks if any or all of its strategies fail to work for accomplishing the program and closing a $2.2 billion budget gap.

Thornton Mayor Erik Hansen

But Hansen and other NATA members say that’s not a fair way to treat taxpayers elsewhere who are paying right now for service they might never see.

“It’s disappointing that they’re only going to manage to build one more line,” Hansen said.

“There is an equity issue here that if there is a problem in FasTracks, we can’t just build one corridor,” the mayor said. “Everyone has to get some level of service. What needs to happen is there ought to be a plan that takes these worst case scenarios and says what do we do if they happen.

“This is about working together as a region.”

RTD says it is still focused on finding ways to deliver the entire program as promised and, while it’s well aware of the practical problems including asking voters for more money in a recession, it won’t pick a Plan B until it needs to. In the meantime, it makes sense to build the parts of the program that can be built at the time they can be built; otherwise, the program’s problems get worse.

“We have been saying all along if the federal funding does not materialize, we’re still going to be able to build the East Corridor because of the private financing that comes through the PPP,” Pauletta Tonilas, FasTracks spokeswoman, said of the public-private partnership.

“At some point we have to keep things moving forward. The East Corridor has the most regional ridership. Most of the region will utilize it because of the destination that it serves. If we can get that corridor into construction next year, why would we not want to do that?”

The RTD rapid transit system, existing and proposed, is shown on this map. RTD's budget gap threatens the scheduled completions of the Gold Line, Northwest Rail, US 36 BRT, North Metro and I-225 corridors, along with extensions to the Southwest and Southeast corridors.

Frick’s report took to task not only RTD but also the Denver Regional Council of Governments and consultants it hired to analyze RTD’s FasTracks financial projections for costs and revenues. Frick said the consultants appeared to soft-pedal criticism of RTD’s sales tax projections and construction cost methods.

You can read the full report here:
NATA FasTracks Packet 11-30-09

Coincidentally, RTD says Frick is serving on a working group it put together to advise it before the end of the year on a new methodology for forecasting sales taxes. That is part of an annual effort RTD conducts to re-evaluate all of FasTracks’ finances, from construction costs of all proposed transit corridors to how much revenue its sales tax will bring in. That re-evaluation is due for release in a month.

It’s not like the essential elements of a FasTracks Plan B aren’t already known. RTD admitted in July 2008 that it could not deliver FasTracks as promised by 2017 without new revenues, due mostly to huge cost increases and poor sales tax collections. Since then it has been working with stakeholders – including a Metro Mayors Caucus task force on which Hansen participants – in search of a consensus solution.

In the worst case, the framework for Plan B consists of variations of extending the schedule beyond 2017 and building all lines as revenues allow. Different iterations shown to the mayors and others in the past year include apportioning money to all corridors as it dribbles in. What formula to use for dividing money has been an issue – should it be divvied up in proportion to original cost estimates, current costs, projected ridership, costs of realistic segments of each corridor?

No consensus has been reached on that, largely because of complaints by Hansen and other officials from areas where FasTracks lines are threatened that the approaches so far are inequitable to their citizens.

RTD is pursuing three strategies to shore up funding for FasTracks, currently projected to cost $6.9 billion with only $4.7 billion to pay for it by 2017. All of them face uncertain chances.

Two of the strategies – the $1 billion in federal grants and the near-$1 billon in private investment – already are included in the $4.7 billion available revenue figure. The East Corridor to DIA and the Gold Line to Arvada/Wheat Ridge meet thresholds for federal grants. RTD last year successfully obtained a similar Federal Transit Administration grant, called New Starts, for the West Corridor light rail now under construction in Denver, Lakewood and Golden, in the amount of $308 million.

The other corridors do not meet the thresholds for grants.

RTD’s privatization of the East and Gold corridors includes the financing, design, construction, operation and maintenance of the lines under a 40-year concession agreement with a private consortium. The program is called Eagle P3 – East and Gold Public Private partnership. Two teams of builders, designers and financiers are in the running and RTD expects to select a team by next summer. If successful, the private partners would infuse up to $1 billion in private financing.

While none of this is guaranteed, RTD has experience and a leg-up on the process. RTD has won every New Starts grant it has sought — $120 million for the Southwest Corridor light rail to Littleton, $525 million for the Southeast Corridor light rail built as part of T-REX, and the $308 million grant to West Corridor.

In addition, the feds have picked the Eagle P3 package as a demonstration project to highlight the effectiveness of public-private partnerships. As such, the grant requests for East and Gold get more easily attained funding thresholds and expedited processing.

And while the BBC report called the Eagle P3 project “a public-private partnership that has never been accomplished on this scale anywhere in the United States,” one of the members of the Denver Transit Partners bidding team – Fluor Corp. – is involved in the $2 billion public-private partnership building the I-495 Capital Beltway toll lanes project in northern Virginia. There, the private partners brought $935 million in financing, parameters similar to Eagle P3.

However, the BBC report points out that the New Starts program, like all federal transportation funding programs, hasn’t been reauthorized by Congress. The existing federal authorization was to have expired Sept. 30 but has been temporarily extended to the end of the year. Congress may take another 18 months to draw up a new six-year plan. That delay in funding new New Starts would negatively impact RTD’s financing plan, BBC said.

“Completion of the system relies on federal funding from a program that isn’t currently in place, from a public-private partnership that has never been accomplished on this scale anywhere in the United States; from an unlikely increase in sales tax rates to unprecedented levels, and from fare box revenue that is dependent on a fully functioning system,” Frick wrote.

“Unfortunately, if one revenue source fails to meet expectations, others are jeopardized.”

BBC says it appears that the DRCOG consultants exercised “careful avoidance of the issue, and the real possibility that at least one major revenue source will fail to materialize as hoped for, or will perform significantly under expectations, and that the remainder of the financing system may then unravel.”

It is RTD’s third strategy, aimed at bringing the $2.2 billion in capital needed by 2017 to complete the program, that may be the most problematic.

RTD is considering whether and when to seek a second FasTracks sales tax increase, likely another four-tenths of a percent, which would double the amount in the original plan approved by voters in 2004.

Preliminary RTD data runs have shown that if a new tax were approved in November 2010, it could complete the program on schedule. But it could delay the request to 2012, and that delay would in turn force a delay in the completion year.

BBC’s report slams RTD for not accounting for the cumulative impacts of all three strategies falling short.