Monday, October 20, 2008

Piecing the puzzle on the true cost

With all the exaggerated claims made by Measure B proponents, they have so far provided nothing to back up their promises.

What the documents obtained through the Public Record Act show is that VTA refused to provide updated cost estimates:

Email from Bena Chang (Yes on B/SVLG operative) to VTA on Friday, 8/22 at 4:58pm :


Reply from Brandi Childress (VTA PR staff) to Chang on Monday, 8/25 at 3:01pm:

"On your second request, staff is actually working on a 2008 Draft 65% Engineering cost...actual costs in 2008 dollars based on the design thus far. Is COB today the drop deadline... in other words, is early tomorrow out of the question? Please advise, thanks!"

Another reply from Jennie Loft (VTA PR staff) to Chang on Monday, 8/25 at 3:37pm:

"We are Working on 2008, 65% engineering costs. It will need to go through review process. What we have now available is 2005, trending engineering costs, which you can have now. Please advise and we can provide. Thanks!"

Later at night, Leyla Hedayat, a VTA planner, sent a message to the VTA PR staff about Chang's questions (8/25 at 11:18pm):

"I received an email this evening to talk to Michael, I will try him first thing tomorrow - I suspect it has do with the cost estimate. We have the trended PE in 2005$ but will not have the 65% cost estimate for tomorrow. They are not finalized and VTA mgmt. has not reviewed these costs. I will give an update at our meeting tomorrow."

Reply from Childress to Phil Yost, another SVLG operative, on Tuesday, 8/26 at 4:19pm:

"..The VTA Exec Team is working on numbers based on 65% design engineering costs but we need to really vet them with Mr. Burns which won't be ready by tomorrow. We also want to make sure we are accurate and ready to run with figures that have not even been released through our Federal environmental or new starts processes yet. Our take is that we would rather be safe than sorry..."

Reply from Childress to Chang on Tuesday, 8/26 at 4:45pm:

"..The cost is $4.7 billion in 2005 dollars. The extension will cost approximately $6 billion in year of expenditure dollars (construction year dollars), projected by year 2017. This figure considers inflation of the dollar and does not mean the cost has increased from $4.7 billion..."

Another message from Hedayat to the VTA PR staff about Chang's questions (8/26 at 10:35pm):

"...Can you make sure that Bena knows that $4.7 Billion is the Preliminary Engineering (35%) estimate. This is important later when the a 65% estimate is released. We should be careful about emphasizing "This figure considers inflation of the dollar and does not mean the cost has increased from $4.7 billion." It is okay to say inflation of the dollar but lets not focus on this does not mean the cost has increased."

Essentially Hedayat admitted that the actual cost (yet to be released) would be much higher than the cost told by the PR staff.

Nearly two months after the email exchanges between SVLG and VTA over the cost of the project, VTA is still officially withholding the updated cost estimates. Soon after the press conference held by the No on B campaign, Michael Burns told KCBS what the No on B campaign has long suspected:

"Burns said the new estimate due early in 2009 would likely be in the $6 billion range, a figure consistent with Okuzumi's projection based on a 30 percent increase in construction costs."

Burns told the media that it would be irresponsible for him to provide new numbers before the work is finished (scheduled to be completed after the election). However, it is actually more irresponsible for him to withhold that information until after the election. Since 2000, VTA has not shown once that it could afford to build the BART project without gutting the rest of the transit system and/or more tax increases. Measure B is just another attempt to mislead voters into believing that VTA could build the BART project cheap.

Besides the outdated figures, VTA also refused to include bonding cost. Numerous studies have indicated that VTA will require billions more in bonding cost to maintain cash flow if it wants to build the entire project in 10 years. VTA could scrap every project it promised earlier, but VTA could not refuse to pay the bonding cost.

Using outdated numbers and omitting bonding cost, Measure B simply would not be enough for VTA to deliver the BART project. However, it would allow VTA to hold back on other transit improvements, if not cutting more of the transit services that we have.

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