Thursday, March 08, 2012

MTA's budget problem: The Central Subway

"Now that I made you mayor, keep the $30,000 a month
coming for the Chinatown Community Development Center."

As the MTA grapples with its budget deficit, let's look at the main reason for all that red ink: the Central Subway project, a political deal disguised as a transportation project---and a poorly designed project at that.

According to Streetsblog, MTA's deficit is "19.6 million over the next fiscal year and $33.6 million in the following year---as well as a $120 million backlog in Muni vehicle maintenance and infrastructure improvements."

Those numbers don't look so daunting when you consider that the city is pouring $287,870,000 into the Central Subway pit according to page 4 of this city document. Since this document was created in 2009, the inevitable cost-overruns since probably make the total even higher.

The city pays the Chinatown Community Development Center, a strong supporter of Mayor Lee and the Central Subway, $30,000 a month do to "community outreach" on the project.

The MTA is considering thousands of new parking meters and activating existing meters on Sunday to raise more money from motorists, even though the city is already raising more than $170 million a year from parking meters, parking lots, and parking tickets. 

San Francisco isn't the only city pursuing foolish rail systems even as the bus system people rely on is cut back. Portland, our sister city in Political Correctness, has a transportation system that is drowning in red ink because of dumb rail projects:

...The Tri-County Metropolitan Transportation District of Oregon (TriMet), the regional transit agency that runs buses, commuter rail and light rail, faces a budget shortfall of up to $17 million next fiscal year. The Portland Bureau of Transportation, which manages the streetcar, faces a $16 million gap. Local officials are still crafting those budgets, but it’s virtually certain that leaders of a region long known for a commitment to multimodal transportation will have to increase fares and reduce service to balance budgets in 2013...

At the same time it works its way through seemingly intractable budget problems, TriMet is pursuing a massive expansion: A seven-mile, $1.5 billion light rail line to the suburb Milwaukie is scheduled to come online in 2015. That’s caused some observers to scratch their heads, wondering how the agency can have enough money for new projects but not enough to keep up existing operations. “They’re closing their eyes and jumping,” says Andersen. “They’re running on faith. And hopefully their faith is justified---it always has been in the past. I hope they’re right. I fear they’re wrong.”

Thanks to the Antiplanner for the link to the Portland story.

Thanks to Save Muni for the Epoch link.

The Matoff study mentioned in the Epoch story.

And the Grand Jury report on the Central Subway.

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8 Comments:

At 12:56 AM, Blogger Al M said...

BRAVO!

 
At 11:59 PM, Blogger Mario said...

Rob,

As much as I am concerned about many aspects of the Central Subway, I have to say that you are incorrect on this one.

First, SFMTA has not used any parking revenue towards the central subway to date, and isn't planning to. Apparently this 2009 document is outdated. http://www.sfexaminer.com/bay-area/2010/11/subway-funding-plan-not-firm has more up-to-date numbers and they don't use parking revenue. You can also see the official funding plan, which claims that only Proposition B/K funds are used: http://centralsubwaysf.com/content/project-fundingbudget. Parking revenue goes completely to the operating budgets, not to capital budgets.

Second, if you look at the SFMTA budgets year over year, the rise in operating expenditures doesn't have anything to do with the Central Subway. And revenues for the agency have been increasing, not decreasing (unfortunately not as much as expenditures). The rise in expenditures is due to unsustainable increases in benefit payments (which SFMTA cannot do anything about since voters voted them in), and due to many unplanned events (SF Giants games, shuttle services).

So while your theory is intriguing, at the moment, it seems false.

 
At 9:24 AM, Blogger Rob Anderson said...

My "theory" doesn't depend on whether parking money is used to pay for the Central Subway. I'm saying that, even if only Prop. K sales tax money---to be used for city transportation projects---is being invested in that project, it's still money spent unwisely.

As the Grand Jury pointed out, Muni has a shortfall in the maintenance and investment in its fleet of vehicles, which would be a better use of that money.

And then there's the fact that the city is borrowing money at great expense to pave and maintain our streets. Prop. K money would be much better spent to do that than on a project---design flaws aside---whose final cost is still uncertain and which will actually increase Muni's operational expenses.

Although on a smaller scale than the projects examined by the authors of "Megaprojects and Risk," the Central Subway fits their analysis of big projects that are sold on the basis of inflated benefits and underestimated costs. Once begun, they can't be stopped, as they pick up political support and momentum the longer they continue.

The obsession many liberals and progressives have with trains is hard to understand, though I suspect that the anti-car movement---trains aren't cars!---plays a role, as do union interests and the dumb "smart growth" movement. SF can have almost unlimited dense development if it relies on trains and bicycles instead of cars!

 
At 9:56 AM, Blogger Rob Anderson said...

By the way, the two links you provide (here and here) on the financing of the Central Subway are not very reassuring, even assuming the numbers provided are accurate. What it tells me: transportation funding in SF is a huge shell game, with tax revenue---local, state, federal---being shifted hither and yon to plug holes in City Hall's pet transit projects, with the existing Muni system that has 700,000 boardings every workday getting shortchanged.

When no plug for the street maintenance hole is readily available, the city borrows $248 million via bonds, which will end upn costing city taxpayers more than $437 million.

 
At 10:02 AM, Blogger Mario said...

Rob,

There don't seem to be any operating funds that are redirected to capital projects. Prop K taxes were already destined for capital projects, and I agree they are not always spent on the right thing (Doyle Drive comes to mind). And I agree that SFMTA can impact the operating budget by mishandling the capital budget, if for example it neglects to renew its rolling stock and rights of way, which would increase maintenance problems and cost Muni more on the operating side.

But let's not claim that parking revenue is being redirected towards the Central Subway. At least at the moment that doesn't seem to be the case.

 
At 11:31 AM, Anonymous Anonymous said...

The caption of this photo is:
"Ed--can we rebuild the Embarcadero Freeway? It would bring much needed traffic to Chinatown and could act as a vantage point for drivers watching the America's Cup."

 
At 11:31 AM, Blogger Rob Anderson said...

Whether parking revenue is being spent on the Central Subway project is a minor issue, since the real question is whether any city transportation money should be used on that project. In other words, it's essentially a political issue and one, in my opinion, that was wrongly made when the city chose the Central Subway project.

The SFCTA took in more than $75 million in sales taxes last year. Among other things, that money, according to the ballot measure in 2003, was supposed to be spent for these purposes:

"Shall the City implement a 30-year New Transportation Expenditure Plan directing transportation sales tax funds to improved maintenance of local streets, transportation for the elderly and disabled, the Central Subway, a citywide network of fast and reliable buses,the Caltrain Extension to a new Transbay Terminal, improvements to pedestrian and bicycle safety and other projects and continue the existing half-cent sales tax during implementation of the New Transportation Expenditure Plan and future Plan updates?"

Note that the Central Subway is merely shuffled into the deck here, suggesting that it was going to be a rather minor project, after "maintenance of local streets." Instead of using Prop. K money to actually take care of our streets, City Hall instead is borrowing money to pave our streets, which will cost city taxpayers almost twice as much as the original amount borrowed.

Typical of other costly transportation projects---like high-speed rail---the Central Subway's supporters get some kind of minimal approval from voters as a green light in the beginning and then expand the project radically, committing city voters to a lot more money than originally promised as both Muni and our streets deteriorate.

 
At 5:15 PM, Blogger Rob Anderson said...

No, the caption on the photo should be: "Okay, Ed, now that I made you mayor, keep the $30,000 a month coming for the Chinatown Community Development Center."

 

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