VTA is trying to have things both ways: phase the project without phasing it.
VTA is splitting the BART project into two segments. The first segment is from Warm Springs to Berryessa, and the second segment is the stupid downtown subway and a portion that parallels Caltrain to Santa Clara. VTA plans to submit the first portion for federal funding and leave the second portion be locally and state funded.
Basically by putting the first portion to be federally funded. The cost for the federal funded portion would be smaller and thus appear more cost effective. VTA also plans to request a smaller amount, about $500 million or so, first the first segment. Since the second portion would not be federally funded, VTA could spend as much as it wants and screw cost effectiveness.
But the interesting thing to the story is that VTA intends to build both portions all at once.
Federalizing a portion of a greater project has been done before even in the Bay Area. For example, the Tasman light rail line, and the 3rd Street light rail and Central Subway in San Francisco. But the differences are that these projects, as their entirety, are more cost effective, and that they all were or to be built and planned in phases.
What VTA is trying to do is to cheat the federal government.
Aside from poor cost effectiveness and increased construction cost to VTA (due to the smaller federal funding request), VTA has cash flow problems for construction, as well as the lack of operating funds. If VTA were to build the BART project in phases, VTA's problem would be much less severe, and therefore VTA would likely argue for federalizing a segment based on these benefits. However, this is not VTA intends to do. VTA intends to build the whole project at once based on false benefits and with all the harms.
VTA could cut bus service to pay for the subway part of the project without federal oversight. Also, if cost overruns occur for the subway portion of the project, VTA could literally run out of funds and would not be able to produce matching funds for the federalized portion. Without checks and balances for the most expensive and unstable portion of the project, the foolish BART project would be another Bay Bridge East Span. Instead of a large fishing pier, it would be disconnected wide gauge track segments suitable for a train musesum displaying trains from India.
Carl Guardino of SVLG is quoted “With this innovative agreement the federal government has shown they know the answer to the 1960 song “Do You Know the Way to San Jose?” – it’s on a BART train, all the way to downtown San Jose, and onto Santa Clara.” May be he is actually talking about these trains without carrying any actual passengers.
I hope the federal government would see this crap right through.