A sweetheart deal in the making

Houston TX - At taxpayer expense, the Houston Metropolitan Transit Authority (Metro) is spending $7.2 million of taxpayer dollars to buy 2 blocks of land along it's light rail line according to the Houston Chronicle. This land was bought from a developer and will be sold back to the same developer at the same price at a later date.

In short what is happening is that the Metro is holding land, tax free, for a developer that just isn't ready to start building anything yet. The purchase of the property back by the developer will be for the same price and literally amounts to a tax break of millions of dollars to the developer as well as a free loan of taxpayer dollars. The developer will also earn interest on the $7.2 million received from the Metro. Metro will make absolutely no profit from this transaction and millions in lost real estate tax revenue will have to be made up for by the taxpayer.

These types of shady transactions are all too commonplace when it comes to development associated with a transit project. They are never mentioned by the pro-rail crowd either since it makes one question the true cost of having rail. Usually the city does these shady deals but now we're seeing the transit systems themselves getting involved directly.

Transit systems should not be involved in this type of activity. This is not what they were set up to do. It is a waste of taxpayer money that should be stopped immediately. Cities should not be involved in these deals either but I'll save that rant for another day.

This story shows well how public transit systems have lost their focus on what they should be doing, moving people from point A to point B. Millions of tax dollars are spent each year by Metro just to have a real estate department. And guess what, the money to staff and run the office comes out of operating funds.

As I have said many times before, the management in the public transit industry is on a mission to find new ways to spend the taxpayer's money on anything and everything except providing good service and Houston's Metro is proving my theory is factual. As a reward for proving my theory as a fact, the Houston Metropolitan Transit Authority earns itself a well deserved Lance.

RTD could be $1 billion or more in the hole

Denver CO - The Rocky Mountain News reports that Denver's Fast Trax program could be $1 billion in the hole due to overestimating the revenues from a 0.4 percent tax hike approved in 2004. This is hardly a surprise to me as transit systems, as well as any government entity, always wildly inflate projected revenues and underestimate costs.

The $1 billion number is the projected deficit over 25 years but still accounts for 11 percent of the total. This 11% reduction in the tax hike isn't the only loss either, the dedicated sales tax that pays to operate the system is also taking a $1.63 billion dollar hit over the next 25 years.

This reduced revenue not only effects transit projects, it effects the operation of the transit system. In other words, Denver overestimated the revenues so they could justify building various transit projects and now they'll be screaming soon for more money or they'll cut service and raise fares.

This is a big problem throughout the transit industry. Too many operations rely on wildly inflated revenue projections to justify building rail lines and other costly transit projects. When the economy takes a hit, the hit to the transit system is greatly amplified due to using heavily tweaked revenue and cost projections.

The RTD is on an ambitious building campaign to extend its rail system and they may end up with major problems running what they have in place already. With the projections based on the current as well as planned operation over the next 25 years, this negative change in revenue predictions will have one of two effects as the projections may come down even further.

First is that the Fast Trax program, which millions have been spent on already, may be shelved which would be just tossing tax money away. Second is that they'll continue on building the entire plan, cutting corners where they can, and then do a major hack and slash of service on the bus side of the operation.

The taxpayers need to understand this important point when they hear about their transit system going on a building spree. Projected revenues are always greatly inflated as is projected ridership and project costs are always vastly underestimated. When the public remembers this simple fact, they begin to ask the tough questions about expensive transit projects. By blindly following the politicians and transit officials, you'll end up with a transit system that has a bunch of pretty and expensive transit projects but no money to operate them.

Did you ever notice...

One thing I've been noticing over the years of collecting the Transit News for the AMCAP web site's discussion board is the number of transit systems that are screaming for money.

What is interesting in this fact is that just about every one of the transit systems that are screaming the loudest for money and threatening massive route cuts and fare hikes all have some form of rail operation. This is not to say the bus only operations aren't in a cash crunch too but they don't seem to be in as critical of a cash flow crunch as those systems that have rail or are hopping on board the rail bandwagon.

This observation tells more than you may think. It shows that rail is draining the treasuries of these public transit operations at a much faster rate. It also shows that systems with bus operations only generally tend to be more resilient to cash flow issues.

Not every system that has rail is on the verge of a complete financial collapse but the vast majority of them are. On the flip side, not every system that is a bus only operation is safe from a financial collapse but it sure seems that those operations that don't have rail aren't in that bad of shape.

While rail has its place, not every city needs it and even fewer can support it. The pro-rail crowd never mentions this little fact in their quest to get every Podunk town, population 2, set up with a rail line.

Rail is inherently expensive to build, operate and maintain. Residents need to start asking the hard questions when politicians and pro-rail activists start pushing rail as the saviour of the city. The main questions need to do with long term costs as well as how many millions of dollars extra will be spent in unrelated costs such as sweetheart deals with developers and other non-direct costs to the project. Most important, don't back down and demand proof of their numbers.

Public transit is at a critical point. The cost to provide service continues to climb and transit systems need to provide the most efficient type of service available if public transit is to survive. Buses provide that efficient service and they have the added benefit of being able to be quickly adjusted to meet demand.

Minnesota is setting an unwise precedent

St Paul MN - The most recent report out of St. Paul indicates that the politicians are about to set an unwise precedent in the transit industry. The Minnesota House of Representatives approved an amendment that would force the Metro Council to reverse the awarding of a bid to Gillig Corporation and award it to New Flyer Industries (NFI) who, by the way, couldn't bother itself to follow the bidding procedure and are whining about it.

By politically forcing the reversal, it will set a precedent that in Minnesota, all buses will be NFI since NFI can now low ball every bid in the state, not meet the bidding criteria and then invoke the new state law to get awarded the contract. As I mentioned in an earlier Laurels and Lances article, "Warranty? What warranty? There's no stinkin' warranty".

The approved bill, submitted by Representative Loren Solberg (D) must be reconciled to a similar bill in the State Senate that was introduced by Senator Tarryl Clark (D) before being signed into law by the governor.

The main issue is the warranty. A warranty on a transit bus is no trivial matter as they all have problems when new. I have not seen a bus order since the days of the GM New look that didn't have tons of warranty related problems and even they weren't immune to problems.

Gillig, who followed the bidding procedure, will provide a 2 year warranty as per the bid terms. NFI's grand plan is to offer a 1 year warranty and then only if a problem effects 30% or more of the order based on their assessment of the problem. That's like buying a car that is known to have problems and having the warranty only going into effect if 30% of the cars sold at that particular dealership have the same problem. No sane person would take a car they know will have problems with that type of warranty.

The cost to the transit system under NFI's offer will ultimately cost the transit system millions of dollars more over the 2 year period that the bid required since the transit system will be left to pick up the tab. Even though the initial outlay is more if the contract went to Gillig, the long term costs are less.

In my personal opinion, NFI's warranty offer is done in such a way that they won't have to provide warranty service. What a way to do business. It's the proverbial non-warranty warranty. You get a piece of paper saying your covered but when there's a problem, don't bother them with it.

Both Representative Loren Solberg and Senator Tarryl Clark earn the Lance for failing to understand what they are about to do but then, Democrat politicians only understand knee jerk reactions while never understanding the long term implications of their actions. Transit in Minnesota will suffer in the long term over the politician's desire hand NFI a free pass to get the business without meeting the bidding criteria.

This is a rarity...

St Cloud MN - An article in the St. Cloud Times which was penned by the executive director, David Trip, for the St. Cloud Metropolitan Transit Commission (MTC) is a rarity. Not so much for it's content but for actually being published as it goes against popular opinion and newspapers tend to ignore such stories as this one.

Basically the article tells why the MTC doesn't run smaller cutaway style buses and actually goes into a few details to explain it.

Too often, reporters are busy echoing the public misconception of smaller is better when it comes to motor vehicles. This misconception comes directly from the environmental movement who has, for decades, tried to persuade the public that bigger vehicles are bad for the environment while smaller vehicles are better and will save the environment. *cough* Toyota Prius *cough*

While Mr. Tripp is right on the money, I wish he would have made a bit clearer the information on operating cost. As I have also tried explaining this to many brain dead Liberals that were screaming for smaller buses on various routes where I live, I am well aware that they have no concept of what operating costs mean.

Operating costs means fuel, maintenance, insurance, operator and mechanic wages as well as a few other obscure costs all rolled into one convenient term. What needs to be brought to the forefront however is fuel use. Just saying the operating cost is no different between a large and small bus doesn't really break down the idea properly.

For example, the general public truly believes that a smaller bus uses less fuel than a larger bus but they do understand that the costs of wages remain the same.

The truth of the matter is that there is virtually no difference in fuel use between a small cutaway van and a heavy duty 40 foot bus. The only real difference is if the transit system went from 60 foot articulated coached to a 25 foot cutaway. Then and only then would you notice an overall fuel savings. That's hardly a practical solution to public transit however as if your running articulated coaches, you more than likely have the ridership for it and cutaways couldn't handle the load.

Also, too many people don't quite understand the concept that transit systems need to be set up for peak hour service and can't have an off-peak fleet and a peak fleet. That would drive the cost of providing service out of the range of most everyone that depends on the service.

One thing mentioned in the article is something even I never gave much though to and that is safety. Going with the smaller cutaway vans that many people call for because they think larger buses are a waste of money and use more fuel, your putting the riders at greater risk during an accident.

The article is a great read and chock full of useful facts to help better understand why transit systems run big buses on low ridership routes. While focusing on the St. Cloud MTC, it is easily adaptable to any transit system. I encourage you to read David Tripp's column.

Charlotte's historic streetcar to sit

Charlotte NC - The Charlotte Observer reports on the latest boondoggle by the Charlotte Area Transit System (CATS). This time it was restoring a vintage trolley car before checking on the implications of running it with the new LRT cars.

While a noble act and one that as a transit fan of history I truly appreciate, CATS literally blew $180,000 of tax money to restore Charlotte's last remaining true streetcar. Surprisingly, CATS even admits that they didn't bother to assess the risks before spending the money. In other words, they were in such a rush to spend taxpayer money that they didn't think. They only saw the positives through the rose colored glasses they wear when it comes to rail.

Plans were to run the venerable number 85 in service on the new LRT line. The Feds nixed that idea when they found out about it because the old streetcar could not stand up to a collision with the newer and heavier LRT cars.

Now number 85 will sit and be brought only on special occasions and that will be rarely as it will disrupt the LRT line operations. Basically CATS paid good money to make a static exhibit.

While $180,000 is chump change in the public transit industry these days, this story still shows the desire of transit systems to find new ways to spend taxpayer money on everything except providing service. It also shows the lack of planning and foresight of CATS and why there is currently a push to get the dedicated sales tax repealed.

AC Transit's Van Hools drawing debate

Oakland CA - The Inside Bay Area site reports on a bus that you either love or hate, the Van Hool buses that AC Transit currently operates and has an order in for more.

When I first saw these things, my first thought was "they are going to be expensive as hell to repair if damaged". Well it turns out I wasn't far off as drivers have confirmed this at the most recent AC Transit board meeting.

The critics of the Van Hools, many of whom are seniors and disabled individuals, cited at the AC Transit board meeting a jarring ride, seats that are difficult to reach and narrow aisles. Drivers cited a narrow wheelbase that leaves a large overhang which smacks into objects on sidewalks as well as a ride that jostles passengers.

Proponents of the Van Hools also had their say. They love the looks and praised the reduced noise and emissions. They also cited a survey that gave the Van Hool high marks. Personally, I'd like to see that survey as well as the raw demographic data collected on it as more than likely the results are skewed to reflect the view of the transit system.

AC Transit is to get in the first prototype for the second order in May with many modifications made to it. Additional changes can then be done on the rest of the order if needed.

Now for a few comments from myself. First off, screw the looks of the bus. I can agree with the reduced noise and emissions but when one of the top reasons for proponents liking the bus and wanting more of them is strictly the appearance, they probably don't ride much.

Appearance doesn't get many butts in the seat either. Good, clean, convenient and reliable service does. The bus could look like an old Ford Edsel and people will still be willing to ride if the service is good. You don't need a "Euro" look to attract riders unless your trying to attract the snobs that wouldn't ride even if they were paid to ride.

What I found as a rather ignorant comment from Alameda County Supervisor Scott Haggerty was this. When he chided the Van Hool detractors for not working out their issues with the elected AC Transit board. Excuse me Mr. Haggerty but I've been reading numerous news reports on their attempts at trying to work things out with the board for 5 years over the various issues with the buses. Perhaps you just closed your ears to their attempts and if the AC Transit board is anything like the board of directors at my transit system, the critics would just be ignored anyway.

Hopefully AC Transit will make the needed modifications to settle this issue.

Is Charlotte next on the transit chopping block?

Charlotte NC - The Charlotte Area Transit System (CATS) gave its story of doom and gloom to the public on the subject of the effort to repeal the half cent, transit dedicated, sales tax. The Charlotte Observer reports on this as well as the retort by critics.

CATS is threatening massive route cuts and higher property taxes if the half cent tax is repealed. The critics say this is simply scare tactics. The critics of CATS may have a big surprise coming.

The big problem here is that the rail line is almost complete so guess what, it has to run or a huge repayment of funds to the Feds will have to occur. If the line doesn't run, Charlotte is on the hook for over $300 million that must be repaid (the FTA requires immediate lump sum reimbursement) and I can guarantee you, that line is going to run and the bus service will ultimately suffer to keep the rail line running.

The critics waited way too long to try and do something to stop the line. Hell, many opposed to the rail line now were in favor of it initially. There are also questions about how the signatures on the petitions to repeal the sales tax were obtained which puts a cloud over the critics.

This situation wouldn't be occurring if CATS didn't just have to have expensive rail toys to play with. Now that they have their toys and have the pro-rail crowd wetting their pants in joy over a new rail operation starting up soon, it has to be paid for. The repeal of the dedicated transit tax is a stupid move by the opponents of the system and I truly question why they waited so long to act. They fail to understand that they'll just pay for the line through higher property taxes and higher rental payments for those that rent.

As far as the CATS proposals, they are putting forth the doomsday plans to the public. Yes, it is a scare tactic to a point but cuts will come if the dedicated funding source that provides 60% of it's operating money is taken away. Simply hiking fares won't cover the loss of the funding. Property owners will fight getting their taxes raised but the taxes will go up but not enough to cover the shortfall of repealing the dedicated tax. The critics of CATS are totally wrong to try and pull the funding from the transit system at this late date. It smacks of a child that wants his way throwing a temper tantrum.

What is needed is to pressure the politicians, the same ones that the critics most likely voted for, to stop CATS from continuing with the planning for the expansion of the rail line when the first line hasn't even proven itself yet. The critics that are claiming CATS is just using scare tactics and demand that the dedicated sales tax be repealed will be the first ones whining when cuts do happen and property taxes go up.

While I agree CATS needs to straighten itself out, especially in management, the critics are going about trying to correct the problems in completely the wrong way.

If the critics can get the dedicated sales tax reversed on the ballot, why didn't they just have a ballot initiative saying no more rail after this? After all, the planning of the expansion of the rail system is what got this tax revolt started in the first place.

What is happening is Charlotte is rather confusing and becoming more clouded as time moves on as more and more reasons are being tossed into the pot as to why the tax should be repealed. All I know from following this story for a while is that the critics blew it by waiting so long to do anything. Now it's too late and anything done will ultimately hurt the public. Not just those that depend on transit but all of the residents since repealing the tax at this time will put a stranglehold on a big part of Charlotte's economic engine.

I've been there and done that. Pittsburgh, after years of scare tactics to get money, is finally making massive service cuts (finalized and going into effect in June 2007). Those that say transit systems won't do massive cuts only need to look at Pittsburgh to see that times have changed. Transit systems can't just make threats of cuts anymore, they have to do it as money is tight. Charlotte residents appear to be on the verge of learning a new tactic in public transit, threats can be real.

Low bidder needs to meet the bid requirements

St. Paul MN - A battle is brewing in Minneapolis - St. Paul over a bus order that was awarded to Gillig Corporation rather than New Flyer Industries (NFI) who was the low bidder for the order. How this is being dealt with by the politicians shows a problem that can effect every transit system.

Minnesota State Senator Tarryl Clark (D) has introduced a bill that would force the Metropolitan Council to award the bid to the low bidder, NFI.

Sounds good right? Awarding the bid to the manufacturer that can supply the buses at the lowest cost is how it should be done *but*, there's a hitch. NFI didn't meet the bid specifications.

The bid specs clearly stated that there was to be a 2 year warranty. NFI refuses to honor a 2 year warranty and would only offer a 1 year warranty with conditions. This really doesn't surprise me as NFI has had issues in the past with other transit systems that required a performance bond be posted, something NFI refuses to do and why my local transit system doesn't have any NFI buses running around.

Another issue in the request for bid was training. While this issue is cloudy as the bid asked for 3,000 hours and NFI stated a dollar amount of training it would provide. They could net out but the warranty issue is extremely critical.

While the low bidder should get the contract, the simple fact that NFI didn't meet the criteria, especially on the warranty, should disqualify them. In most cases, it would however NFI has a plant in Minnesota and the NFI union and politicians are howling over this and trying to force the system to award the bid to NFI.

The big problem here is that political muscle is going to be used to award a contract to a bidder that did not meet the bid requirements. This could spell problems down the road for Minnesota transit systems where NFI could low ball the bid without meeting any of the requirements. "Warranty? What warranty? There's no stinkin' warranty".

This is almost an exact opposite of a similar issue in Broward County, FL. There, NABI was low bidder and met the requirements but transit officials kept trying to award the bid to NFI. Here, NFI was the low bidder but failed to meet the bid requirements. If NFI met the bid criteria or was off by a trivial issue, I would be on the Metropolitan Council's case for awarding the bid to Gillig but a warranty is hardly a trivial issue.

Government needs to watch themselves when they push bills such as what Senator Tarryl Clark is putting forth. These types of knee jerk reaction bills tend to back fire badly in the long term and in this case, it'll be all of the transit systems in Minnesota that suffer when it does back fire.

SEPTA is "short shrifted" according to one columnist

Philadelphia PA - The writer of a commentary in the Philadelphia Inquirer obviously hasn't been west of the Allegheny Mountains. I was chuckling while reading Mark Bowden's commentary piece which was claiming that SEPTA was the most "short shrifted" transit system in the United States.

All Mr. Bowden needs to do is take a trip from Philadelphia over to the neglected Pittsburgh area if he wants to experience a short shrifted transit system, both financially and politically. I am still questioning how he can say SEPTA is being shorted when they receive the lion's share of state operating funding.

Approximately 75% of the state operating funding goes to SEPTA. Pittsburgh receives only about 23% with the remaining paltry 2% being split up among every other transit system in the state. SEPTA is short shrifted? Hardly.

In just about every state-wide expenditure, transit or not, the Philadelphia region receives the lions share of the payout. The reason? They have a more population as well as more powerful politicians. Mr. Bowden would probably still complain even if Philadelphia received 100% of the money.

As far as politically, SEPTA hasn't had multiple attempts by politicians to ban buses from the streets of the Center City of Philadelphia as has been pondered by politicians in Pittsburgh when they have attempted to ban buses from Downtown on multiple occasions over the years.

While I agree with Mr. Bowden that public transit across the country gets "short shrifted" as he puts it, SEPTA isn't getting the shaft as bad as he's making out in his article. Please pay Pittsburgh a visit some day and stay for a few weeks to experience PAT in all its glory. You'll leave with a whole new appreciation for SEPTA.