Saturday, July 19, 2008

RTD Ponders Future of FasTracks

Denver's RTD is pondering unpleasant options as its initial $4.7 Billion estimate for completing FasTracks is falling short of actual costs by a considerable percentage. Now admitting to as much, RTD is now considering three main options or a combination of the same to bring costs under control. The age-old triple constraint is at work as illustrated in the civil engineers' mantra: "Quick, inexpensive, or to specifications; pick two."

If Denver wants their FasTracks program on time and (relatively) inexpensive, the third constraint, finishing the job to specifications, they must sacrifice their original objectives of a complete system. When an area that was supposed to get light rail or commuter service gets word that it won't, it's a safe guess that they will be less than pleased at the news. Access to dedicated, efficient mass transit plays a major role in property values. A sagging economy and rising gas prices will immediately impact those values if a proposed light rail line or a portion of it is abandoned or spun as "indefinitely postponed."

If they want it relatively on time and to specifications, the cost is going to go up by more than just a little. The same sagging economy makes this a very painful option that may be out of reach for RTD. Increasing taxes in a recession is similar to reversing the bilge pumps to pump in water on a ship that's already got a hole in its side. The local economy could grind even slower and the property values would eventually sink when people realize they can't make a living in Denver.

If Denver wants the program inexpensive and to specifications, the third constraint of time will overrun the estimates. This will give more time for the existing taxes to raise more money, provided inflation does not become an issue. By far, this is the most attractive option but it may be only partially effective. Waiting longer to complete some or all of the remaining lines will have the smallest impact on property values if the certainty of completing the lines is real. Time seems to be the one thing people have faith in, Eventually, Denver still would have a first-rate transportation system serving its population and adding incentive for further growth, just slower and more sustainable.

As any one of Denver's successful microbrewers could tell you, timely maturation is an art. You can rush things, but that can ruin it. Waiting too long can be equally costly, but this is one time that spacing things out until economics improve seems the best course.

Update 8/24/08: Latest estimate is $1.8 Billion shortfall.

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