Denver, Featured, Randal O'Toole, Transit, Transportation, Uncategorized

O’Toole: FasTracks built on deceit, delusion and other people’s money

In 2004, I was approached by Jon Caldara to come work for his organization, the Independence Institute, Colorado’s free-market think tank. Jon said he wanted me to work on housing and land-use issues as well, but he mainly wanted me to fight the Denver Regional Transportation District’s (RTD) FasTracks ballot measure, which proposed to implement a permanent regional sales tax and spend nearly $5 billion for six new light rail lines.

Jon came to lead the Independence Institute via an unusual path. He had a business doing stage lighting for rock-and-roll bands when he decided to run for the RTD board of directors, whose fifteen members are elected from individual districts. Jon got himself elected by the Boulder district in 1994 and was later named board chair. Although he was unable to prevent RTD from putting light rail on the ballot in 1997, he led a successful campaign against the tax increase. As a result, the institute offered him the job of being its director in 1998.

At the time, Denver already had one light-rail line that, ironically, had been built as the indirect result of the Independent Institute’s actions. The Institute’s founder, John Andrews, helped persuade the state legislature to require that RTD contract out a portion of its bus routes—initially 20 percent, later half—to private operators. This reduced costs by almost 50 percent per vehicle mile. Andrews reasonably expected RTD would spend the savings expanding bus service. Instead, it used the funds to build the region’s first light-rail line, which in the long run proved to be more wasteful than letting RTD operate all of its buses.

Fast forward to 2004 and now RTD was planning to put FasTracks on the ballot.

I told Jon that he needed a grassroots organizer, not a policy analyst, but he had his heart set on hiring me. At the time, I was enjoying life in small-town Bandon, Oregon (population 3,000) and didn’t want to have anything to do with Denver. “I hate cities, and I especially hate driving in cities,” I told Jon. “Moreover, I hate driving, and I especially hate driving in cities.”

Nevertheless, Jon talked me into working half-time in Colorado, while I spent the other half of my time, usually in two-week increments, in Bandon (or on the road to other cities). Long story short: we lost. We didn’t lose because Jon made the mistake of hiring me instead of a grassroots organizer; instead, RTD spent millions of taxpayer dollars in the years after the 1997 ballot measure persuading every interest group in the region that rail transit was the solution to their problems, whatever those problems may be. As a result, I don’t think anyone could have beaten them unless they had at least half a million dollars at their disposal for a major advertising campaign.

Helping filling in some of the gaps in my skillset was Kathleen Calongne, a Boulder resident who was more organized that I was; better at dealing with people one-on-one (while I was best in front of a crowd); and did a good job of arranging speaking engagements and other meetings. Working as a volunteer, she put in at least as many hours as I did and I wouldn’t have survived without her help.

RTD’s Deception

For most workers in the Denver area, the most important problem in the region was congestion, so naturally proponents touted the congestion benefits of FasTracks. On my first visit to Denver I attended a presentation by FasTracks advocates in which they claimed that the plan would take 240,000 cars off the road each day. I knew they were deliberately misreading the analysis of FasTracks prepared by the Denver Regional Council of Governments (DRCOG), which actually predicted it would take only 72,000 cars off the road. That number was a drop in the bucket compared with the 12 million vehicle trips that DRCOG predicted people would be taking in 2025.

The DRCOG analysis predicted that, without FasTracks, people in the Denver region would drive over 95.540 million miles each weekday in 2025. FasTracks would reduce this to 95.066 million, a difference of half a percent. Even during rush hour, FasTracks would reduce highway traffic by less than 1.4 percent. I made graphs for a PowerPoint presentation showing the growth of traffic with and without FasTracks and would flip back and forth between the two. “Can you see the difference?” I would challenge audiences, who would usually gasp in surprise.

After a series of debates with proponents, one of them said to me, “Why do you keep bringing up the congestion argument? We don’t argue that it will reduce congestion.” It was true that, when I was around, they would say that rail was “an alternative to congestion,” but when I wasn’t around, they quickly returned to the claim that it will “relieve congestion by taking 240,000 cars off the road.”

I also challenged the very name of FasTracks, pointing out that Denver’s light rail averaged less than 20 miles per hour and calling it “SlowTracks” whenever I had the opportunity. Though RTD claimed that the commuter-rail lines it would build under FasTracks would average 40 mph and its light-rail trains would average 30 mph, in fact the commuter rail built to date averages just 30 and its light rail averages about 20. The one FasTracks line that goes 40 mph is the only bus-rapid transit line was built as a part of the plan.

One of the stranger arguments proponents made was that the money would be better off in RTD’s hands than in taxpayers’ pockets because RTD would wisely spend most of it locally, thus having a bigger impact on the local economy. Taxpayers, meanwhile, would foolishly spend the money on food and other things that were grown or made outside of the Denver region, thus having a smaller local impact. Just why the average voter should care about that wasn’t considered.

As a policy analyst, my first instinct was to write a variety of reports. These included a series of critiques of FasTracks and a paper presenting our alternative to it. I also wrote are report reviewing the failure of rail transit in other cities called Great Rail Disasters and another attempting to undermine the anti-auto mentality so many had by showing that the automobile was the Greatest Invention in American history. I guess I liked using the word “great” in report titles.

Beyond that, my method of campaigning was to make presentations to as many groups as possible. Since we were often invited to debate one another, the proponents and I soon made an agreement: I would bring a projector and they would bring a screen. Since I hated driving in cities, I would put my laptop in one pannier bag and the projector in the other and then stuff in some street clothes that I could put on over my cycling shorts and jersey. They would drive up in a Chevy Tahoe with a tall and unwieldy screen in the back. I often wondered if anyone ever noticed the incongruity of the rail supporters driving around in SUVs while the opponent rode a bicycle, but if they did, they never said it to me.

While Jon chaired the RTD board of directors, the agency’s CEO retired and Jon made sure the agency hired someone who supported buses over trains. Cal Marsella had worked for the Miami transit agency where he privatized bus services, following RTD’s example. He swore to Jon that he wasn’t interested in building a rail empire.

That quickly changed after Marsella took over RTD and today he is known as the “father of FasTracks.” I debated Marsella several times and was disappointed by his willingness to bend the truth.

RTD had prepared environmental impact statements for each of the proposed rail lines and they all considered alternatives to rail. In every case, rail was the least cost-effective solution to any problem. For the airport line, building new lanes onto the freeway between downtown and the airport was most cost-effective at relieving congestion and bus-rapid transit was most cost-effective at increasing transit ridership. Diesel-powered trains would cost several times more than new freeway lanes or buses, while electric trains were the least cost-effective. For FasTracks, RTD proposed Diesel trains, but after the election, RTD switched to electric trains, probably because it believed it had enough money to do anything it wanted.

Anyway, Marsella freely claimed that rail was the most cost-effective solution to relieving congestion. I would cite page numbers and tables from RTD’s own documents showing that it wasn’t, but he just ignored it.

Marsella also liked to say that RTD had always built its rail projects on time and under budget. In fact, the one line it had built and the one that was then under construction both went over their original budgets and opened later than originally planned. As they were built, RTD would revise its cost and time estimates and, sure enough, the final cost would be less than the last cost estimate it made and the opening would be sooner than the final projected date. This has become a typical deception of agencies that build rail lines.

In another debate, I pointed out that it would cost less to give a new car to every low-income family in the region that didn’t have a car than the cost of just one of the proposed rail lines. “We can’t let poor people have cars,” Marsella exclaimed. “It would cause too much congestion!” What a heartless statement!

Pay to Play

RTD didn’t formally put the measure on the ballot until a few months before the election. Until that time, it was openly campaigning for rail. Just a few days before filing the ballot measure, it sent a lengthy full-color brochure to just about every household in the region touting the benefits of rail transit. Since the brochure never mentioned the ballot measure, it circumvented state laws forbidding government agencies from lobbying the public.

When it did file the ballot measure, RTD employees who had been promoting the program simply changed hats and went to work for the political campaign. The campaign had plenty of money to pay these employees, as it raised several million dollars from companies that expected to profit after the measure passed.

Clearly, pay-to-play was the name of the game. Early in the campaign, Siemens, a German company that makes light-rail cars, donated more than $100,000 to support FasTracks. Colorado Railcar, a local manufacturer, made a last-minute donation of $5,000. Soon after the measure passed, RTD gave a no-bid contract to Siemens for the largest order of light-rail cars in history. It didn’t order anything from Colorado Railcar, which went out of business in 2008 after selling a few cars to transit agencies in British Columbia, Florida, and Oregon. So much for buying local.

A representative of one of the construction companies that donated over $50,000 to the FasTracksYes campaign, and that would end up getting some of the biggest contracts after the election, admitted to me privately, “We know FasTracks is stupid. We just think of it as a WPA program for Denver.” But the WPA was created to put unemployed people to work during a depression; Denver in the early 2000s had a booming economy that was almost untouched by the dot-com crash, and it certainly didn’t need an employment program.

Dirty Tricks

FasTracks supporters weren’t above playing dirty tricks. Oregon allows anyone with $300 to submit a statement in favor of or opposition to any ballot measure that is included in a voters’ pamphlet sent to every Oregon voter. Colorado also has a voters’ pamphlet but it allowed only one pro and one con argument for each measure.

We submitted our argument ten minutes before the deadline and, at the time, we were the only one to submit an anti-FasTracks statement. Yet somehow another statement was submitted, signed by the assistant director of the FasTracksYes campaign. It made ridiculous statements such as “I oppose FasTracks because I want to see ten-lane freeways built throughout the Denver area.”

Under Colorado law, if more than one statement was submitted, the agency bringing the ballot measure to the public was to combine them in the published voters’ pamphlet. Naturally, RTD gleefully included the fraudulent arguments. We took them to court, and while the judge said what the proponents and RTD did was “morally reprehensible,” he could find no remedy under the law. All of which demonstrated to me that most rail proponents were pathological liars who wouldn’t recognize the truth if it bumped into one of their trains.

Outspent

We managed to get the Governor Bill Owens to come out against FasTracks, saying that it was “more tax than tracks.” The state treasurer, Mike Coffman, also opposed it, calling it “technically flawed” because it failed to include a sunset provision when the system was built, instead allowing RTD to tax people forever. While RTD and rail proponents often suggested that the tax would end when construction was done, I had reviewed RTD’s financial plans in detail and the agency would need to keep the tax in place to pay for reconstruction every few decades.

Denver’s mayor, John Hickenlooper, was a strong supporter of the plan. A few days before the election, he was quoted in the papers saying, “It’s going to take 240,000 cars off the road—that’s gotta relieve congestion!” Hickenlooper later became governor and now is running for U.S. senate.

In the last few weeks of the campaign, Jon Caldara managed to persuade a donor to contribute enough money to buy a few radio ads. But it was too little, too late. The Yes campaign spent something like $3 million in three months, and before that RTD had spent millions “educating” the public about the benefits of rail transit.

The Aftermath

Soon after the measure passed, RTD began admitting that it wouldn’t be able to build the rail lines for the cost it had projected during the campaign. In fact, costs nearly doubled. RTD blamed the increase on a construction boom in China that increased the cost of steel and cement. “No one could have foreseen this increase,” Marsella said. Of course, people like urban policy analyst Wendell Cox and I had foreseen the overruns, if not the exact cause. Such overruns take place because of optimism bias at home, not events somewhere around the world.

RTD didn’t really care about the total cost because it was allowed to collect the increased sales tax forever, so it could just borrow more money on 40-year or longer bonds. However, the ballot measure did limit on the amount RTD could borrow at any one time.

RTD hit upon the solution of a public-private partnership to build several of the lines. The private partner would borrow the money and RTD would contract to pay the partners a fixed amount each year to build and operate the rail lines. The debt would appear on the private partner’s balance sheet, not RTD’s. Naturally, RTD claimed the public-private partnership was saving taxpayers’ money, but in fact it was spending well over twice as much on the contracted lines as it had projected in 2004.

If RTD’s predictions had come true, all of the lines would have been finished by 2017 and the system today would be well on its way to carrying the 357,000 weekday trips predicted for 2025. Instead, one line is still under construction and another line may never be built as its cost is so high and current projected ridership so low that even RTD can’t accept the resulting cost per rider, which would be well over $60. (RTD claims it plans to build it but not until after 2040.) In 2018, RTD carried just 144,000 daily riders, well under half the 2025 projection.

Since the election, RTD has been praised for its wonderful rail plans. Politico called FasTracks “The Train That Saved Denver.” Engineering News Record says that FasTracks has “transformed the region.” Such claims put hopes before reality.

Between 2004 and 2018, RTD ridership grew by less than 27 percent, but in the same time period the region’s population grew by more than 27 percent, so all of the increased ridership could be accounted for by population growth. Meanwhile, freeway driving grew by more than 45 percent.

In 2005, transit carried 4.3 percent of Denver-area workers to work. By 2018, transit’s share was down to 4.0 percent. The five rail lines that opened since the election (including the one that was under construction in 2004) clearly have not had much of an influence on regional travel habits or congestion.

With higher-than-expected costs and lower-than-expected ridership, RTD’s financial situation is so dire that it is proposing “temporary service reductions” to deal with its declining fare revenues and the fact that it can’t afford to hire enough bus drivers to operate all of its routes.

While I was unable to save Denver from the SlowTracks menace, I since been able to help people in several other cities stop rail projects. Among others, these included Austin, San Antonio, St. Petersburg, Virginia Beach, and Winnipeg. The disheartening problem was that, as soon as one project died, another would pop up because the federal government was offering to pay up to half the costs of obsolete transit projects.

In the end, the only ways FasTracks transformed the region are by increasing its tax burden and by giving local planners an excuse to subsidize transit-oriented developments along the rail routes.

Randal O’Toole is a land-use and transportation policy analyst.  A version of this article originally appeared in his blog, TheAntiplanner.  

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