Regional Alliance For Transit
1000 Union Street, Suite 207
San Francisco, California 94133
Founded 1992

26 November 2004

Dr Tom Campbell
Department of Finance
915 L Street
Sacramento 95814

Re: Oppose FY 2005-06 State Funding of the “BART to San Jose” Project under the Transportation Congestion Relief Program (TCRP )

Dear Director Campbell:

Several years ago in your Congressional Office in Campbell, two of our members met with you to discuss the extremely high cost of BART extensions and the financial “crowding out” of more worthy projects. We are writing to you now about the proposed mega-project for the “Silicon Valley Rapid Transit Corridor,” more commonly known as “BART to San Jose.” This costly rail project is on the TCRP list for renewed funding, and the sponsor is seeking $648 million from the state.

The project sponsor is the Santa Clara Valley Transportation Authority (VTA), which is responsible for both transit operations and congestion management in Santa Clara County. In addition to TCRP funds, VTA is seeking a “New Starts” Full Funding Grant Agreement (FFGA) from the Federal Transit Administration (FTA) for the enormous sum of $973 million. FTA has, however, rated the project as “Not Recommended” for New Starts funding. Also, VTA has acknowledged that it cannot build the project unless voters approve a third half–cent sales tax in November 2006.

The State of California should not provide TCRP funding for the BART project before:

1) VTA has secured a federal New Starts FFGA for $973 million; and
2) Local voters authorize the County’s half–cent transportation sales tax in November 2006.

Funding the BART project through the TCRP now would needlessly tie up state resources that can be better used elsewhere. It is clear that the BART to San Jose project is in serious jeopardy, may not ever be built, and VTA cannot afford to operate it and its own existing mass transit service (see Attachments 1 and 2, reports from VTA management regarding operating and capital shortfalls, respectively). In addition, BART to San Jose costs a great deal of money. At a time when California can ill afford waste, the project will do little to reduce congestion or increase transit ridership, in great part because it is the wrong answer to the question of how to improve mobility between Alameda and Santa Clara counties (see Attachment 3, a report from the Santa Clara County Grand Jury).

Another way to highlight the exceptional cost of the project is to consider the cost per new passenger trip, a standard measure of transit cost–effectiveness. In the draft Environmental Impact Report of the BART project distributed in the spring of 2004, VTA estimated the cost per new passenger trip for this project as $32.83. A new passenger riding on the extension twice each weekday will therefore cost taxpayers $16,415 a year; in two years the cost will be $32,830. It would be less expensive to give all new BART riders a free automobile every two years rather than to build and operate the extension (see Attachment 4 from FTA on the high cost of the extension).

The project is also dependent upon another project, a BART extension from the existing Fremont terminal to Warm Springs in Alameda County. That project is also in financial difficulty, in part due to the poor operating results of the BART to San Francisco Airport extension, and itself may not be built. Without the Warm Springs extension, the BART to San Jose project would not connect to the rest of the BART system.

The San Jose Mercury News on Sunday, October 17, 2004 published an article reporting that the VTA’s Policy Advisory Committee endorsed the Grand Jury’s recommendation to suspend BART funding (see Attachment 5).

Please also note that the draft Regional Transportation Plan (RTP) recently released by the Metropolitan Transportation Commission only includes an unexplained “construction reserve” for the BART project’s capital requirements and does not include a firm source of operating funds (see Attachment 6). Therefore, under federal law, the project cannot receive further federal funding for the foreseeable future.

In terms of ridership and congestion reduction—the avowed objectives of the State’s TCRP funding, the Mercury News on Sunday, May 9, 2004 published a cover page article that stated in part: “... new ridership projections from the Santa Clara Valley Transportation Authority suggest BART’s impact on the commute would be small—so small that most people would hardly notice a difference in their daily travels...In 2025, according to the agency’s data, two of three seats on weekday trains would be empty. Traffic on Interstates 680 and 880 would remain jammed. And a trip from southern Alameda County to most of Silicon Valley would remain much faster by car than by mass transit.” (See Attachment 7 for the text of this article.)

If the BART project is “phased” to Milpitas or the Berryessa Station area, as some officials are proposing, the ridership and congestion reduction issues raised by the Mercury News remain unchanged.

RAFT is a transit advocacy organization, but believes the BART to San Jose project is a waste of money and should not be built. However, the issue which your Department must soon address is whether or when to restore TCRP funding for the project. RAFT believes that this should not occur until the FTA and Santa Clara County voters decide whether to support it, which would be, at the earliest, November 2006.

The attachments to this letter are but a small sample of informative documents about the project that may not have reached either your Department or the Governor.

RAFT members familiar with these issues are available to meet with you or your staff should that be helpful to you.

Thank you for your time and attention and best wishes to you in your new post.


M. Kiesling
for RAFT

Attachments with Supplemental Detail

1. A memorandum to the VTA Board from the General Manager of VTA, the transit operator in Santa Clara County that wants to build the BART extension, dated August 5, 2002.

This memo demonstrates that VTA cannot afford to operate both its existing bus and light rail transit service, and BART, and has “pledged” its state Transportation Development Act funds to BART if no other source of operating funds is found. Reductions in TDA funds would require significant cuts to existing mass transit service which is heavily used by minority and low-income residents.

2. A memorandum to the VTA Board from the Chief Financial Officer of the VTA, dated October 1, 2003.

This memo is clear: VTA, even with TCRP funds, cannot meet the cash flow requirements related to construction costs of the project: “First we completed the estimates of the amount of 2000 Measure A and other federal and state revenue available and the maximum amount of bond proceeds plus the related debt service costs. Then we inserted the cash flow required by the optimum project development schedule for the BART project. We concluded that the optimum project development duration of 10 years was not possible even after adding in the maximum bond proceeds of $2.4 billion plus related debt service costs of $4.7 billion. The optimum schedule runs out of cash by FY 2009, reaching a program deficit of $1.9 billion in FY 2013.” Other construction scenarios are reviewed and the conclusions are not significantly different. This document and the one above indicate that VTA knows that it cannot afford to build the BART project and that even if it could, VTA cannot afford to operate both the extension and existing transit services.

3. A blistering report from the 2003–2004 Santa Clara County Grand Jury dated May 27, 2004.

Its summary contains this statement: “The overriding financial problem facing VTA at present is that it cannot afford the cost to build and operate a BART system to San Jose. Spending limited resources on BART could squander an opportunity to build, maintain, and operate a far larger network of transit options throughout the county as enabled by voters approving the 1/2 cent Measure a sales tax in 2000. The Grand Jury recommends delaying expenditures for BART to provide more immediate funding for other Measure A transit projects.”

4. A letter from the Federal Transit Administration to VTA dated September 17, 2004.

This letter informs that FTA intends to cease federal action on the BART project for a period of time. It also states: “As you are aware, FTA approved the SVRTC project into pe in September 2002, noting that concerns regarding (1) the travel demand model and resulting technical analysis used during the Alternatives Analysis, and (2) the operating financial plan and the ability of VTA to operate and maintain the existing bus and rail transit system during the construction and operation of the proposed major capital investment would have to be addressed during this phase of project development. Since that time, VTA has demonstrated very little progress in addressing these concerns, resulting in the current “Not Recommended” rating. We were disappointed that VTA did not take FTA’s advice to identify a minimum operable segment, and instead chose to reduce the number of stations along the alignment. Unfortunately, this attempt to reduce project costs generated only modest savings, resulting in a proposed investment that continues to have one of the highest capital costs of any fixed-guideway project in FTA’s New Starts pipeline. The situation is especially troublesome considering the poor financial condition of VTA, and the unusually high level of New Starts funding (approximately $900 million proposed).”

5. A San Jose Mercury News newspaper article dated October 16, 2004.

This article reports that the VTA Policy Advisory Committee (PAC) wants funding for the BART project suspended. The PAC is made up of representatives of the 15 cities in Santa Clara County, and their action endorsed the Grand Jury’s recommendation to suspend BART funding.

6. A page from the draft Environmental Impact Report of the Metropolitan Transportation Commission’s 2005 draft Regional Transportation Plan, released November 12, 2004.

It states: “full project not included in Financially Constrained Element.” Thus, the full BART–to–San Jose project will not be included in any RTP until at least 2007.

7. A San Jose Mercury News newspaper article dated May 9, 2004.

This article reports on the small impact the BART extension would have on commuters and on its limited benefits.