BART SFO/Millbrae cost SamTrans over half a billion dollars
- Published Friday, November 6, 2009, by the Examiner.com
BART pried another $158 million from SamTrans to fund Warm Springs
By Guy Span
Bay Area Public Transportation Examiner
Thanks to the Metropolitan Transportation Commission's intervention in 2007, SamTrans was extricated from its marriage to BART, but at a huge cost. Indeed, the three-party agreement between SamTrans, BART and the MTC was stranger than fiction and more expensive than an asteroid-sized engagement ring. See: Money laundering at SamTrans from the BART airport extension <http://groups.yahoo.com/group/BATN/message/43087>.
Under the three-party agreement SamTrans is relieved of underwriting the operating loss of the extension ($40 million by 2007) but gave up $72 million in loans to BART, $32 million in State Transit Assistant funds laundered into SamTrans coffers and paid (swapped) to BART, gave up 2% of its transit sales tax to BART for 25 years (about $1.374 million a year, increasing with tax revenues), $801,024 from MTC for an indefinite time until $145 million is paid to BART ("surplus" funds from BART's airport operations will help reduce this number) and a one-time payment of $223,541 for a bike path.
Now since the $145 million payment to BART is to go towards the Warm Springs extension, BART is given some latitude for what constitutes a "profit" on the extension, unlike SamTrans. Operating expense is fixed at Fiscal year 2007 and then inflated for each year regardless of what the operating expense actually is (a deal SamTrans might have gone for). Thus BART can conjure some internal funds based upon a fictitious profit and apply it towards Warm Springs construction, essentially by increasing its operating expense. And as part and parcel of this happy deal, BART pries another $158.5 million from SamTrans (but BART pays SamTrans $26.4 million for land and other expenses).
So to value the $801,024 payment that SamTrans gives up each year from the MTC, the working assumption is that it will last 25 years (not 180 years), so it is assigned a Net Present Value (NPV) of $13 million. Valuing 25 years of $1.374 million a year in payments to BART with an NPV of $41.3 million (this payment goes up as inflation or sales taxes increase), we are approaching the true cost of BART to the Airport for San Mateo County. So far, the running total is:
Capital Costs $405,882,000 (Includes forgiven $72m loan now included in capital)
Operating Loss $ 40,693,000
STA "Swap" $ 32,000,000
Lost 2% Sales Tax $ 41,300,000
Lost MTC $801,024 $ 13,000,000
Total: $506,675,588 (Reduced by BART Payables to SamTrans)
The contribution from San Mateo County for BART to the airport now totals over half a billion dollars. Is there a message here for Santa Clara County? In many respects, the Santa Clara Valley Transportation Authority (VTA) appears to be marching down the same path blazed by San Mateo County. SamTrans went from a sleepy little county bus operator to a regional operator, picking up Caltrain and BART to the airport along the way.
VTA was a sleepy little county bus operator who expanded into light rail lines in the Bay Area's most populous but least dense county (in terms of house/land/population). Now it too wants to be a regional rail operator. Will it have a better experience than SamTrans?
Certainly SamTrans had a miserable and expensive experience but arguably some of those funds were passed through to SamTrans from other agencies. It still remains that $0.5 billion was the total of what SamTrans paid and lost. Or is it the complete total?
[BATN: See also:
Divorce from BART over SFO disaster still costing SamTrans dearly
What did Millbrae/SFO BART cost San Mateo Co. and SamTrans?
VTA in crisis: $98m deficit 4x worse than projected; huge cuts loom