Comment: Atherton man says financial voodoo can fund HSR tunnel
- Published Friday, May 15, 2009, by the Palo Alto Weekly
How to fund high-speed rail AND tunneling
By Malcolm Dudley
With the passage of Proposition 1A last November and Congress's approval of the American Recovery and Reinvestment Act in February, many cities along the Peninsula now have serious concerns about the impact an elevated High Speed Rail would have on their communities.
A growing number of cities favor building the rail line underground to avoid using elevated tracks with retaining walls and overhead wires along the Caltrain corridor.
There are both technical and financial issues involved when considering tunneling, but the primary criticism has been the cost.
Engineers have provided tunneling solutions all over the world, including the Bay Area, so any technical problems can clearly be solved.
The High Speed Rail Authority has implied that the additional cost of tunneling would be the responsibility of individual cities desiring the underground alternative. Since cities are already having financial problems it would be impossible for them to fund the additional cost for tunneling.
But there is an answer.
It is the Peninsula citizens who have provided the funds to purchase the Caltrain corridor and provide funding for Caltrain capital improvements. Therefore it is the citizens of this Peninsula who have paid for the corridor and who own this corridor with funds provided through sales-tax revenues over the past 20 years.
The Caltrain Joint Powers Board represents the citizens in managing this asset. Because of this citizen investment of more than $1 billion, from all three counties, the citizens should be entitled to payment from an outside user that has had nothing to do with the acquisition or improvements of this line.
Thus rental income from HSR's use of our corridor could be the source of funding the tunneling the line in those cities that prefer that alternative. Some cities may have a different preference, and funds should be made available for these preferences.
I was a member of the San Mateo County Expenditure Plan Committee that developed the County "Measure A" proposition in 1988. We made Caltrain the number-one priority, with approximately 50 percent of the sales-tax increase going for upgrade, proposed extension, grade separations and right-of-way acquisition.
This measure was passed by the voters of San Mateo County on June 7, 1988. We then created the San Mateo County Transportation Authority to administer the funds. I served on this authority for 13 years, until I retired from serving on the Atherton City Council.
One of our early actions was to acquire the corridor from Southern Pacific, prior to its merger into Atchison Topeka and Santa Fe [BATN: sic; Union Pacific]. San Mateo County sales tax revenues funded approximately $40 million for the county's share of the funding, and it also loaned $40 million to Santa Clara County for its share along with $20 million to San Francisco County for its share.
[BATN notes <http://samtrans.com/history.html> indicates that $124m -- or about 56% -- of the $219.6m Caltrain right of way purchase price was paid for by state taxpayers with Proposition 116 rail bond funds.]
Over the past 20 years San Mateo County citizens alone paid approximately $500 million for Caltrain corridor acquisition and capital improvements
To put this into perspective, over the past 20 years Atherton citizens alone have contributed approximately $10 million ($547,000 per year), and Menlo Park citizens have contributed approximately $28 million. I point this out to demonstrate the enormous investment the citizens have made in this corridor.
When you add the amounts that have been contributed by Santa Clara and San Francisco counties citizens, the figure is well in excess of $1 billion.
It would be appropriate and just for our citizens to receive a return of perhaps 5 percent on this investment each year, which could then be used to provide the added cost of tunneling for those communities that prefer that alternative. That would provide $50 million per year, or $1.5 billion over 30 years. With this revenue source it would be possible to borrow through a bond issue.
With the financial problem solved we can now move on with resolving any engineering issues.
Malcolm Dudley is a former mayor of Atherton and [BATN: former] chairman of the San Mateo County Transportation Authority. He can be e-mailed at <malcolm.dudley@...>.