Construction on the light rail bridge over Colfax Avenue at Sixth Avenue is part of the West Corridor, the only FasTracks rail line currently under full construction.

A group of business and civic leaders is reassembling the coalition that successfully pushed the 2004 FasTracks campaign to determine whether – and under what conditions – it would support RTD’s quest for a second tax increase to finish the financially challenged metro transit expansion.

“There is nothing more important to our regional economic health than FasTracks,” John Huggins, formerly Denver’s economic development director, told metro area mayors and RTD staff Wednesday morning.

The newly formed Coalition for Smart Transit will look at the risks and opportunities in RTD’s upcoming revision to it FasTracks financial plan and help determine whether there is political will and financial wherewithal to conduct a second tax hike election.

“We are not a campaign committee,” Huggins told a meeting of the Metro Mayors Caucus Task Force that has been collaborating with RTD staff and board members on seeking a solution to FasTracks’ financial problems. Rather, the group will do its own examination of RTD’s status and prospects and then decide whether to support the push for more tax money.

The coalition has a draft resolution that lays out seven conditions under which it would support a new tax. Those are listed at the bottom of this page.

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You can read the record of this morning’s meeting including the RTD presentation and the Coalition for Smart Transit’s presentation here.
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“Going (to a vote) and then losing would be a disaster,” Huggins said.

Huggins said the coalition is trying to bring together the unusual grouping of business, labor and environmental stakeholders who worked together in 2003 and 2004.

“We want to get up to speed on where RTD is,” he said. “That is critical to any long-term success.”

He said the coalition won’t support a second tax vote unless it is convinced there is a reasonable chance it will pass. A comprehensive poll on that issue is expected to be in the field in late February or early March.

It is looking increasingly unlikely that the RTD board will set an election in 2010 under those conditions. If groups are still in the information gathering stage in March, the time to gear up a campaign for November is more compressed. In addition, with several anti-tax measures already headed to that ballot, the atmosphere would be highly charged for RTD to be seeking to double the tax for FasTracks.

That pushes it likely to 2012, a state general election, although 2011 is a slim possibility. Pushing the election back that far means that even if voters say yes to another tax increase to finish FasTracks, the new revenues wouldn’t come in soon enough to keep the original schedule. And that means metro leaders – not just RTD – have to come to a consensus on how and when a rescheduled build-out of 10 rail and bus corridors plus associated work will be done.

Priced at $4.7 billion in 2004 when voters approved a four-tenths cent sales tax to help pay for it, FasTracks’ bottom line has grown amid an unprecedented worldwide inflation in construction costs. Worse, its financial projections haven’t been met and the available capital to construct all the lines by the original 2017 deadline no longer is expected to come in.

The 2017 build price is currently estimated at $6.9 billion, although that is expected to change with the new annual review to be released Jan. 5. The cost is expected to drop slightly as construction markets have declined. But the more difficult part of the equation is money to pay for it. The worst recession in a generation has pulled the bottom out of RTD’s – along with nearly all other government agencies’ – capital construction plans that rely on sales taxes for financing. As a result, the current projection is that RTD would be $2.2 billion short of being able to pay for all the work by 2017.

Alternatives include seeking the new tax, lengthening the schedule under the existing tax, repackaging some of the projects in an attempt to cut their initial costs, and other strategies.

“We have achieved a high level of comfort that the cost issue has settled down a lot since 2004,” Huggins said of the coalition. Many of the corridors have had a higher level of engineering and design in the last five years so that costs are better locked down.

“But the revenue side has been more challenging,” Huggins said.

Mayor Erik Hansen of Thornton, arguably RTD’s toughest critic among elected officials, said the agency still needs to do a better job coming up with alternatives for getting the program done under various worst-case scenarios.

“It’s not just when you build it but how,” he said. “It’s not just time, but what is the plan if your revenues do come in on the low side. You have to have a range of option.”

Mayor Ed Tauer of Aurora said that even “the best forecast is the world is going to be wrong” and that “if you miss your projections in the early years, you can never get them back.”

The seven conditions the Coalition for Smart Transit laid out for its backing of RTD’s quest for new taxes are:

• RTD completes revised cost estimates based on the latest available pricing and engineering information (to be completed as part of RTD’s regular Annual Program Evaluation by January 2010); and

• RTD has completed its Peer Review of sales and use tax forecasting methodology, and the Coalition is comfortable with the methodology and assumptions to be used in RTD’s sales and use tax revenue forecasts, including the use of a range (conservative, moderate, optimistic) of revenue scenarios and the detailed assumptions that go into developing each scenario; and

• The cost and revenue forecasts come together in a workable financial plan for the project, including ongoing operation and maintenance/replacement costs, which is acceptable to the Coalition (this financial plan will also be completed as part of the Annual Program Evaluation). Given the use of a range of revenue forecasts, the financial plan must have overall system completion date (in years) as the chief variable among the three revenue scenarios; and

• There is broad (though not necessarily unanimous) political agreement among the region’s elected officials and key civic organizations in support of the financial plan and any proposed tax increase, including the details of how the tax increase would be used.

Only after those first four conditions have been met would the coalition then impose three more conditions on its support:

• The Coalition would have to be confident (not certain, but reasonably confident) based on additional polling and focus groups that a proposed campaign could win; and

• The Coalition would have to be confident in our community’s ability to raise the funds needed for a winning campaign (based on a campaign plan, budget and fundraising plan similar to the 2004 FasTracks campaign plan and budget); and

• RTD would have to have secured, or the Coalition would have to be very confident in RTD’s ability to secure (based on achieving such milestones ads final design approval and securing and Early Systems Work Agreement from the Federal Transit Administration), the expected federal funding for the Eagle Project (the commuter rail system and corridors to Denver International Airport and Arvada/Wheat Ridge.

Here is a list of the organizations and individuals who have been invited to join the Coalition for Smart Transit. Not all of them have yet accepted membership:

• Metro Denver Chamber of Commerce/Economic development Commission
• Downtown Denver Partnership
• VisitDenver
• National Association of Industrial and Office Properties
• Board of Realtors
• Aurora Economic Development Commission
• Southeast Business Partnership
• Jefferson Economic Council
• MetroNorth Chamber
• Louisville/Broomfield business representatives
• Boulder representative
• Colorado Environmental Coalition
• Colorado Public Interest Research Group
• FRESC (Front Range Economic Strategy Center)
• Siegel Public Affairs
• Ted Trimpa, attorney
• John Huggins