Thursday, April 23, 2009

CATS' three big questions

CATS chief executive Keith Parker said one of these three things needs to happen for the northeast light-rail extension and the north corridor commuter rail line to be built at the same time, early next decade.

1) The north corridor receives federal stimulus dollars.

2) The economy roars back, and revenue from the half-cent sales tax surges.

3) New revenues. This could be another dedicated tax, or perhaps a bond issue.

What are the odds of any happening?

STIMULUS: CATS admits its stimulus bid faces long odds. The reason is that the N.C. Department of Transportation is also applying for some of the same pot of money, a $1.5 billion discretionary fund. The DOT and Gov. Bev Perdue want the money to replace the Interstate 85 bridge over the Yadkin River.

Logic says the DOT will bigfoot any CATS proposal. But no one knows what the criteria will be for the stimulus funds. The Obama administration has already shown it favors "green" projects. The bridge might not make it, while the rail project could be just the type of project the federal government would want to showcase.

(Then again, the Yadkin bridge is a major safety issue. It would fit in nicely with the administration's "rebuilding America" theme.)

Here's an interesting scenario: What if CATS gets stimulus funds, but not the entire $300 million it's hoping for? What if it snags only $75 million?

CATS would still a balance of $300 million to build the north corridor. Paying that balance could leave the transit system's bank account nearly empty, unable to pay for the light-rail extension.

SALES TAX BOOST: The economy will have to do more than recover for there to be enough money to cover nearly $1.5 billion in new projects in the next three years. It will have to sizzle, as it did from 2003-2006.

CATS projects the sales tax will generate $269 million less over the next decade than forecast three years ago. That assumed the tax would grow at a rate of 5.75 percent a year.

When asked how much the sales tax would have to grow for CATS to build both lines, Parker declined to speculate.

Even if CATS makes up the $269 million shortfall, the cost of the two projects has increased. In the old plan, the two projects were going to cost $1 billion. Now the bill is about $1.5 billion. (Part of the increase is due to CATS building both phases of the north corridor at the same time, rather than pushing back some construction until 2018.)

NEW REVENUE: Talk of a new sales tax is officially on. The Mecklenburg County Commission will discuss the issue Tuesday - the first step towards a second half-cent tax.

The N.C. House this week approved a bill that allows a number of urban N.C. counties to levy a transit sales tax, just as Mecklenburg did in 1998. Mecklenburg is left out of this bill.

County Commission chairwoman Jennifer Roberts wants Mecklenburg to be included.

"I want the option," Roberts said Tuesday.

Any new debate over a second sales tax will be, um, interesting. In 2007, CATS the existing half-cent could build all the planned transit lines by 2030.

On Thursday, County Commissioner Bill James sent an e-mail discussing the "R" word - repeal.

"Technically, bringing back up transit with a tax increase could allow those opposed to run another ‘repeal’ drive," James wrote. "There is no ballot restriction on how often a repeal effort could be put on the ballot."

Game on.


JAT said...

Need to understand what we are talking about here, Steve.

From last October, you wrote:

"CATS ... wants to build a commuter rail line to the Lake Norman area, which could cost between $250 and $200 million."

On Wednesday you wrote -- and it was widely repeated -- that:

"CATS also unveiled a cost for the north corridor, a commuter rail line to the Lake Norman area. That project will cost between $368 and $375 million. That's in line with previous estimates."

How did $368-$375m. turn out to be "in line with" $200-$250m.?

I know CATS keeps changing from apples to kumquats on this stuff, but there is a fact of the matter.

I know at one point CATS was not counting the infrastructure costs around the stations, nor were they making clear the Phase I and Phase II elements as outlined in the 2030 plan. Those had price tags of $261m. and $112m. respectively, with infrastructure at $97m. for a grand total of $470m.

It SOUNDS like we are back to the Phase I + Phase II numbers but without the station cost added back in. I guess all you can do is take the financing plan the MTC approved in mid-2007 and put it side-by-side with whatever they released last week and try to make it line up.

Good luck.

Anonymous said...

I predict that the north corridor will mysteriously and suddenly get cheaper when NCDOT gets its money for Charlotte-High Point rail improvements.... because it's the *same corridor*.

Rick said...

CATS is setting themselves up for a "no lose" situation on increasing the transit tax with the request for stimulus money to build the North Corridor.

They asked for an unreasonable amount knowing they won't get it.

If they don't get it, then they'll say they have to raise taxes to build any more lines

By that time, the Northeast line very well may go up another $100-$200 million. Remember, that line is only at 15% engineering. There are more surprises in there somewhere. If we have to wait until the line reaches 65% design before a decision is made, you can be sure it will have gone up - barring some unforseen gold bars falling from the sky to offset the cost.

If they get some money but not nearly enough to build the line - a scenario which is much more likely than getting the whole amount - then they'd be hard pressed to turn it down. They still won't have enough to build the BLE and the North Corridor, so they ask for another half cent which on paper will magically be more than enough to support both lines. That allows them to promise to build either the streetcar or the Independence line with whatever wasn't needed to build the BLE and North Corridor. That satisfies the good Senator Clodfelter's pay for play blockage of getting the new half cent approved for Mecklenburg as long as he gets something for his voters.

I know that above scenario may not sound like it makes sense, but you have to remember something important. When CATS and the City make promises to the East Side and West Side, they don't need to have any intention of keeping them. They've shown that time and again they can get away with it. But hey, the voters keep buying it and reelecting the same people, so why not?

At the end of the day, we'll have much higher taxes here in Mecklenburg. The majority of Mecklenburg voters have shown that they don't mind being lied to - directly to their collective faces. I'm sure they will march right along and approve this during the 2010 election cycle.

The only thing I'm waiting for at this point is the gentrification that comes along with it. Gentrification is a good thing - right? Fortunately for me, I own property by both of the next two lines. That will go up pretty significantly. So, I've got that going for me - which is nice.

Michael said...

Hey Rick,
Thanks for the insight about Charlotte transit/politics and more importantly, the Caddyshack reference.

Rick said...

Saw something interesting and unexpected at todays County Commission policy meeting.

There were about 75-100 protesters in the audience who were against going to the state for more of a tax. That probably won't make it into the Observer's reporting.

Even more interesting was that Vilma Leake and George Dunlap actually seemed very much against getting the new tax.

Of course both of them also seemed very confused and didn't seem to fully understand what the commission was going to vote on next week either. They seemed to think that the commission was going to be voting on actually implementing the new tax and not just lobbying the state for permission to implement the new tax.

Though, to his credit George seemed to actually ask some sensible questions about the existing quarter cent that is available and why couldn't that just be use. He also didn't seem to like the idea of the new 1/2 cent being restricted to transit.

On the other hand, Vilma Leake said repeatedly that she "wasn't playing politics" with her comments, which means she was playing politics. There were lots of questions about the streetcar and how to move that up in line, so there's definitely some horse trading going on somewhere beind the scenes.

Anonymous said...

We need a new bunch of county and city leaders. These people are a JOKE!!!!

Anonymous said...

I've been trying to get a regular bus route East & West along Pineville Matthews Rd (hwy 51) for 10 years. This would boost rail ridership too if it connected in Pineville.