16 Strategic Misrepresentations

Here’s a little-known fact: Denver light-rail trains are the emptiest in the nation. Denver light-rail cars seat 70 and have room for at least that many standing, yet they carried an average of less than 14 people in revenue service in 2007. In the rest of the nation, the average was 24.

If only RTD, Denver’s transit agency, had managed to find some 14-passenger buses (which retail for about $50,000 each). It could have saved taxpayers the $1.2 billion or so that it spent building light rail.

This fact is among many revealed in a new report published by the Independence Institute of Golden, Colorado, which has long been critical of RTD’s dreams of rail empire. The report shows that RTD has repeatedly and continually lied to voters about the high costs and minimal benefits from building more rail lines in Denver.

People who think Denver light-rail trains are full, or that they carry as many people as four freeway lanes, or that they are environmentally friendly need to listen less to RTD propaganda and take a closer look at the actual performance of light rail. This report is a good place to start. Here are just a few of the facts exposed by the report.

1. RTD spent 28 percent more than its original cost estimate on the Southwest light-rail line and 59 percent more on the Southeast line. Yet RTD frequently insists it has always built its transit projects on budget.

2. Denver’s light-rail lines use as much energy and generate more greenhouse gases per passenger mile than the average SUV. Yet RTD maintains that light rail is good for the environment.

3. Denver-area traffic grows more every five months than all the cars FasTracks is projected to take off the road. Yet RTD claims FasTracks will significantly reduce congestion.

4. U.S. light-rail lines built with public-private partnerships went an average of 60 percent over budget. Yet RTD insists that public-private partnerships can save 30 percent on construction costs.

5. By failing to negotiate agreements with BNSF and Union Pacific prior to the 2004 election, RTD’s poor planning added more than $300 million to the projected cost of FasTracks. Yet RTD blames all of the cost increase since 2004 on unforeseeable increases in materials costs.

Transit agencies like RTD are supposed to provide an efficient transportation alternative for people who cannot or would rather not drive. Instead, RTD tells lies in order to promote a wasteful, high-cost transit system that mainly benefits the contractors who build it, not the people who might ride it and certainly not most of the people who will have to pay for it.

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28 thoughts on “16 Strategic Misrepresentations

  1. JimKarlock

    RTD tells lies in order to promote a wasteful, high-cost transit system that mainly benefits the contractors who build it
    JK: Well, of course. How else would anyone vote for that crap?
    Even perfectly planned Poster child Portland’s transit agency lies about rail:

    Trimet lied: WestSide MAX: Not On schedule and Not On Budget
    http://www.portlandfacts.com/Transit/WestOnTimeOnBudget.htm

    Trimet lied: EastSide MAX: Not On schedule and Not On Budget
    http://www.portlandfacts.com/Transit/EastOnTimeOnBudget.htm

    Thanks
    JK

  2. MJ

    “Here’s a little-known fact: Denver light-rail trains are the emptiest in the nation.”

    Are you sure? You might want to check the NTD data on Santa Clara VTA again. They’ve been leading the league for a while now.

  3. Dan

    No time to scrutinize the numbers, but in the past 6 months these numbers are not true.

    They may be true for, say, the Mineral line at noon, but not from, say, 7.00-10.00AM and from 3.00-9.00PM on lines into downtown. They are, simply, nearly or SRO.

    DS

  4. msetty

    As usual, Randal’s analysis fails to include everything relevant.

    He forgot to mention that at least according to the 2007 NTD data summary for Denver RTD, Denver has about the lowest operating cost per hour for light rail transit, e.g., $86.83 per revenue vehicle hour. This in turn leads to a cost per passenger mile of $0.34, which is half that of their buses, and much lower than virtually every other bus operations in a major city.

    The relatively high energy use is probably offset by the fact that perhaps RTD has found it less expensive to run 3 and 4 car trains and pay the extra electric costs all day, than switch to 2-car trains during the daytime and evenings, presumably saving labor and reducing the complexity of operations as the tradeoff with higher electricity costs. There is no way that Denver could carry people in vans for $2.17 per ride in operating expense, plus perhaps another $2.00-$3.00 per rider for the capital expense ($1.4 billion investment X current prime rate).

  5. msetty

    RE: Average loads, Denver vs. Santa Clara

    In the case of average riders per light rail RVM in Santa Clara, the number is 16.24 based on the 2007 NTD data Randal is looking at. So, technically, Randal is correct that Denver has the lowest loads per RVM. However, it actually is a physical tie with Santa Clara since VTA’s LRVs are around 90-feet long, versus the 75-foot vehicles used in Denver.

    A better comparison is how differing operating strategies result in dramatically difference economic outcomes. In Denver, the light rail operating cost per passenger is only $2.17, but in Santa Clara $5.44. Denver runs mostly 3 and 4 car trains, while Santa Clara runs 1 and 2 car trains, with vehicles that are significantly larger and heavier than those used in Denver. Denver’s strategy results in very low operating costs per RVH of $86.83, while in Santa Clara, operating costs are about the highest in the U.S. at $276.32 per RVH in FY 2007.

  6. the highwayman

    Dan Says:
    No time to scrutinize the numbers, but in the past 6 months these numbers are not true.

    THWM: Over time you’ll notice with O’Toole or Cox that numbers are pretty much meaning less, they just hate rail.

  7. Rivlin

    msetty,

    He forgot to mention that at least according to the 2007 NTD data summary for Denver RTD, Denver has about the lowest operating cost per hour for light rail transit, e.g., $86.83 per revenue vehicle hour. This in turn leads to a cost per passenger mile of $0.34, which is half that of their buses, and much lower than virtually every other bus operations in a major city.

    But light rail has much higher capital costs than buses. So much higher, in fact, that they swamp rail’s lower operating costs. The Denver light rail’s total cost per passenger-mile in 2007 was $1.39. That is almost double the per-passenger-mile cost of Denver’s buses (74 cents).

  8. the highwayman

    Rivlin Says:
    He forgot to mention that at least according to the 2007 NTD data summary for Denver RTD, Denver has about the lowest operating cost per hour for light rail transit, e.g., $86.83 per revenue vehicle hour. This in turn leads to a cost per passenger mile of $0.34, which is half that of their buses, and much lower than virtually every other bus operations in a major city.

    But light rail has much higher capital costs than buses. So much higher, in fact, that they swamp rail’s lower operating costs. The Denver light rail’s total cost per passenger-mile in 2007 was $1.39. That is almost double the per-passenger-mile cost of Denver’s buses (74 cents).

    THWM: Track costs are around $3-7 million a mile, unless you want to do fancy things like tunnels.

    For that matter a high speed rail line is in the $20-40 million per mile range.

    Bus costs are average around $0.80 per passenger mile while train average around $0.40.

    It would be nice to see a proper break down of the costing for what is going on in Denver.

  9. Dan

    But light rail has much higher capital costs than buses. So much higher, in fact, that they swamp rail’s lower operating costs. The Denver light rail’s total cost per passenger-mile in 2007 was $1.39. That is almost double the per-passenger-mile cost of Denver’s buses (74 cents).

    We’ve been over this eggs-in-one-basket policy option many times here. For many, bus riding has a stigma or safety issue involved, so the bus ain’t no option.

    DS

  10. Rivlin

    It would be nice to see a proper break down of the costing for what is going on in Denver.

    The operating costs, capital costs and passenger-miles data for the Denver RTD is in the NTD database that msetty referred to above. As I said, that data shows that the total cost per passenger-mile for Denver’s light rail system is almost twice the total cost per passenger-mile for its bus system.

  11. Rivlin

    For many, bus riding has a stigma or safety issue involved, so the bus ain’t no option.

    Refusing to use the bus does not mean the bus isn’t an option. Nor does it mean that a light rail service is justified in addition to or in place of the bus service. Many people wouldn’t use either a bus or a light rail service, but that doesn’t mean taxpayers are obliged to provide them with taxi service or some other alternative.

  12. the highwayman

    Rivlin Says:
    It would be nice to see a proper break down of the costing for what is going on in Denver.

    The operating costs, capital costs and passenger-miles data for the Denver RTD is in the NTD database that msetty referred to above. As I said, that data shows that the total cost per passenger-mile for Denver’s light rail system is almost twice the total cost per passenger-mile for its bus system.

    THWM: Though which capital costs are you bringing up, because things can get blury from here on in.

  13. Rivlin

    Though which capital costs are you bringing up, because things can get blury from here on in.

    I’m referring to all capital costs. The NTD database breaks them down into the following categories: Revenue Vehicles, Systems and Guideways, Facilities and Stations and Other. For 2007, total capital costs for the Denver RTD bus system were $28,249,479. Total capital costs for light rail were $126,154,960.

  14. msetty

    On February 9th, 2009, Rivlin said:

    “They [Denver RTD rail construction costs] are included under the Systems and Guideways, Facilities and Stations or Other categories.

    Apparently you didn’t understand that NTD lumps together all transit capital expenditures in a given year, whether for “replacement” or “capacity expansion.” The NTD in itself has no accounting for writing the latter off over 30-40 years, the correct accounting strategy for major capital investments.

    If you use current Fed interest rates offered to banks which is almost zero at the moment (the 7% interest rate used by FTA to evaluate new starts is a joke), the cost is mostly a straight-line write off of about $35 million+/- per year over 40 years ($1.4 billion rail investment/40 years), or somewhat lower rail costs compared to buses. I also point out that many rail cars also last 35-40 years, so there is no reason to think these costs would be much higher–unless the Feds raise interest rates, unlikely any time soon given the current state of the growing Bush Depression.

    I see you did include bus capital costs, but averaged over a typical replacement cycle of 12 years for buses, I’d guess the annualized average bus capital cost is closer to $40 million/year rather than the $28 million that happened to have been spent by RTD in FY 2006-07–such amounts will vary, of course, by how many buses and other supporting items they replace or purchase in a given year.

    Just so you know my qualifications to pontificate on this stuff, I have written or written the major part of nearly two dozen Short Range Transit Plans or Transit Development Plans since 1990, of which operations and capital budgeting are always the centerpiece. But I am not giving a crash course here; many SRTPs and TDPs are online, if you’ll bother to educate yourself.

  15. Rivlin

    msetty,

    Apparently you didn’t understand that NTD lumps together all transit capital expenditures in a given year, whether for “replacement” or “capacity expansion.”

    Apparently, you think unsubstantiated assertions are a substitute for evidence. They’re not. Show me your evidence regarding the methodology used by the NTD for the reporting of capital costs. Then show me how it affects the total cost per passenger-mile for the bus and light rail services. Your claim that capital costs are fully reported in the calendar year they are incurred is highly implausible in light of the fact that the RTD reports $15 million in capital costs for revenue vehicles in 2007, $23 million in 2006, and $55 million in 2005, despite having purchased a grand total of zero vehicles in each of those years.

  16. msetty

    Rivlin:

    “Show me your evidence regarding the methodology used by the NTD for the reporting of capital costs.”

    Mistake! Since I’ve actually completed NTD reports for the transit operator where I worked many years, I can with total confidence say I’m correct. Don’t believe me? See http://www.ntdprogram.com/ntdprogram/pubs/ARM/2008/html/2008_Financial_Module.htm. Scroll down to about halfway through this long page.

    To quote, “…Accrual Accounting

    Capital expenses are reported using the accrual accounting principle that expenses are reported in the period they are incurred; i.e., the year in which they result in liabilities for benefits received, regardless of whether or not the expenditure is paid during the reporting period.”

    In other words, if you sign a contract for future delivery of buses in Fiscal Year X for delivery in Fiscal Year Y, the correct method is to accrue the expense in Fiscal Year X.

    BTW, Rivlin, please document your claim that RTD, “…having purchased a grand total of zero vehicles in each of those years.” How would YOU know what new vehicles may have arrived at RTD, etc.?? Do you work for i2i?

  17. msetty

    The Highwayman:
    I see what you [Rivlin, I presume] mean, with rail it’s more like full cost accounting, for buses in that they use roads and streets it’s partial cost accounting.

    I’m curious how many additional tens of millions per year in principle could be added to the bus operations budget, to cover pavement damage and allocated road maintenance. For the 59.474538 million miles operated by RTD in FY 2007, at $0.50 per mile, that would be around $30 million/yr; at $1.00 per mile, that would be another $60 million per year, probably enough to run three LRT lines!

  18. Rivlin

    msetty,

    In other words, if you sign a contract for future delivery of buses in Fiscal Year X for delivery in Fiscal Year Y, the correct method is to accrue the expense in Fiscal Year X.

    Your assertions are becoming increasingly bizarre. The text you quote doesn’t say anything about a “correct method.” It states that “expenses are reported in the period they are incurred.” Capital costs are funded through long-term debt. That means that only the portion of the long-term capital debt that was repaid in 2007 is reported as a capital cost for 2007.

  19. Rivlin

    msetty,

    I’m curious how many additional tens of millions per year in principle could be added to the bus operations budget, to cover pavement damage and allocated road maintenance.

    Are you? In that case, I’m curious how many additional hundreds of millions in principle could be added to the light rail operations budget, to cover rail and electrical system damage and allocated maintenance.

    If you think the NTD figures for capital costs are false or misleading, produce your data and citations to that effect.

  20. msetty

    Rivlin:
    Are you? In that case, I’m curious how many additional hundreds of millions in principle could be added to the light rail operations budget, to cover rail and electrical system damage and allocated maintenance.

    For the benefit of those not needing to see their shrink: None. Street maintenance costs due to buses are not in the bus operating budget; track and electrical system “damage” e.g., maintenance, is already included in the rail operating budget.

    Finito.

  21. Rivlin

    msetty,

    You know, you really should take the pills the doctors have prescribed for your condition. For the benefit of those not needing to see their shrink

    As I told you before, statements like this just make you look even more foolish. The fact that you are apparently incapable of restraining yourself from making childish personal attacks is a sign of your insecurity.

    Street maintenance costs due to buses are not in the bus operating budget; track and electrical system “damage” e.g., maintenance, is already included in the rail operating budget.

    Yet another factual assertion for which you offer no substantiation. Show us your evidence that “track and electrical system “damage” e.g., maintenance, is already included in the rail operating budget.” And no, “damage” does not mean “maintenance.”

  22. Rivlin

    As further evidence that msetty doesn’t have a clue what he’s talking about and is just making things up out of thin air, here’s some information on the WMATA’s capital needs for 2011 to 2020 for repair and rehabilition of its rail infrastructure. Note that these are capital costs, not operating costs. The capital needs include over $1 billion for repair, reconstruction and rehabilitation of rail tracks and structures, and over $1.2 billion for replacement, repair and rehabilition of rail vehicles.

    http://www.wmata.com/pdfs/planning/FY%202011_%20FY%202020%20Capital%20Needs%20Inventory%20Summary%20Report.pdf

  23. the highwayman

    msetty Says:

    February 9th, 2009 at 7:44 pm
    The Highwayman:
    I see what you [Rivlin, I presume] mean, with rail it’s more like full cost accounting, for buses in that they use roads and streets it’s partial cost accounting.

    I’m curious how many additional tens of millions per year in principle could be added to the bus operations budget, to cover pavement damage and allocated road maintenance. For the 59.474538 million miles operated by RTD in FY 2007, at $0.50 per mile, that would be around $30 million/yr; at $1.00 per mile, that would be another $60 million per year, probably enough to run three LRT lines!

    THWM: It’s just that there are 2 different accounting systems at play here, one for rail & one for road. So it’s kind of like compaing apples to aardvarks.

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