Streetsblog San Francisco

As part of the complicated funding swaps BART staff arranged with regional and state transportation planners to proceed with the Oakland Airport Connector following the loss of $70 million in federal stimulus dollars due to civil rights deficiencies, the transit operator was hoping to get a federal loan with a low interest rate and a favorable interest payment schedule.

Unfortunately for OAC proponents, as reported recently in Project Finance Magazine (subscription needed), the US DOT announced its Transportation Infrastructure Finance and Innovation Act (TIFIA) loans for FY 2010-11 and the OAC was not among the projects selected. BART had applied for $105 million from the feds for the $484 million project.

Because BART has enough cash on hand to proceed with preparations for construction and actual groundbreaking in early 2011 (versus the ceremonial event held last month) and because TIFIA loans can be applied for continuously, the agency was not particularly concerned with the news.

“Quite frankly we don’t need the money right now,” said BART spokesperson Linton Johnson, who explained that in BART’s experience TIFIA loans are prioritized for projects that urgently need them. He also pointed to Federal Transit Administrator (FTA) Peter Rogoff’s assurances that BART would get a $25 million New Starts grant when the feds accept its revised civil rights compliance . “This shouldn’t be an indication that we’re not eligible for it or that something is wrong.”

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After decades of political wrangling, BART is on the verge of building the Oakland Airport Connector (OAC), a $484 million, 3.2 mile automated people mover that will connect the Coliseum BART Station with the Oakland international Airport. BART held a ceremonial groundbreaking yesterday with most of the significant East Bay political establishment, two weeks before the agency gives the Parsons/Flatiron/Doppelmayr team the order to proceed with design and construction.

“There’ve been many pitfalls throughout this process,” said U.S. Representative Barbara Lee, a champion of the OAC and part of the California delegation that helped get further assurances in the eleventh hour from Federal Transit Administrator Peter Rogoff that the project was still going to get nearly $25 million in federal New Starts funding. “I just want you to know that countless Bay Area residents, all of you have come together to make sure this day happened.”

Lee led off a round of speeches that went for more than one hour, as each speaker thanked the others on the dais and congratulated everyone for their perseverance. A throng of workers representing the trade unions that hope to work on the project circled the large tent BART erected for the event, roaring with applause every time a speaker mentioned jobs and the project labor agreement with local hiring and zip-code priority guarantees.

The exact number of jobs the project will create has long been a controversy, one that project opponents highlighted to cast aspersions on BART. Even at the groundbreaking, the number was in flux, from several speakers that referenced the 2,500-5,000 direct and indirect jobs over the course of the four years of construction (numbers derived from state and federal jobs creation metrics), to the “several hundred direct jobs” referred to by Oakland Mayor Ron Dellums.

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At a hastily scheduled board meeting today, BART’s directors once again voted to approve the Oakland Airport Connector (OAC), this time granting General Manager Dorothy Dugger the flexibility to proceed with the contract, despite several outstanding sources of funding still unresolved.

BART needed to send strong signals to the contracting team of Parsons/Flatiron that the agency intended to move forward with the construction bid, which is set to expire on September 21st, one year after it was initially awarded. BART has been scrambling to fill a funding gap created when the Federal Transit Administration denied the agency $70 million in federal stimulus funds because it hadn’t done a proper civil rights review.

In a previous motion from the July BART board meeting, Vice President Bob Franklin placed a provision on the contract that required staff to return for permission to proceed if various funding streams didn’t come through as expected, including $25 million in federal New Starts money, a $20 million state funding swap from two highway projects and $39 million from the Port of Oakland, which is seeking permission from the Federal Aviation Administration to increase the Oakland Airport passenger surcharge.

At today’s meeting, the board voted 7-1 to amend the previous motion and give Dugger permission to proceed with the contract regardless of when the $25 million New Starts money or the $20 million state swap come through, thereby assuring the contractors won’t walk away from their bid.

Franklin and other board members who were concerned that the FTA hadn’t indicated its position on the New Starts money felt vindicated after BART received a letter from FTA Administrator Peter Rogoff yesterday confirming FTA would grant the money when BART fully remedied its civil rights deficiencies.

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On the eve of another significant vote to proceed with the contract to build the controversial Oakland Airport Connector, BART and project supporters received a positive indication from Federal Transit Administration (FTA) head Peter Rogoff of his agency’s commitment to give BART $25 million in New Starts funds for the project, a necessary step to close the funding gap resulting from the loss of $70 million in stimulus funds earlier this year.

BART staff had been scrambling to replace the $70 million denied to the agency for failure to adequately analyze the federal Title VI civil rights impacts of the OAC. Without the $25 million, BART would have had to proceed by borrowing more and increasing its already significant debt load on the airport connector.

In the letter [pdf], Rogoff reaffirmed to BART General Manager Dorothy Dugger that the FTA had set aside $24.9 million and would “process a grant after determining that BART has adequately addressed all of the Title VI deficiencies for the OAC Project. The grant will include conditions that allow BART to draw down the funds upon BART’s demonstration of completion of the Title VI Corrective Action Plan that was approved by the FTA on April 16, 2010.”

BART called a special meeting of its Board of Directors for today to address the looming contractual deadline with the Parsons/Flatiron team, who won’t delay the bid beyond September 21st, two days before the next regularly scheduled board meeting.

Board action is required before proceeding because Vice President Bob Franklin in July added conditions to a motion to proceed that required any change in funding to come back before the board of directors. Specifically, Franklin was concerned about the $25 million in New Starts money, $39 million from an airport passenger surcharge to be levied by the Port of Oakland, which runs the Oakland International Airport, and a $20 million state funding swap still to be authorized by the California Transportation Commission. The CTC has agendized the swap and plans to vote on the matter at its September 22nd meeting, the day after the Parsons/Flatiron deadline.

Franklin told Streetsblog, given the lopsided votes in favor of the project in the past, he believed the directors would vote to move forward with the project despite the funding gaps today. He said he would act to put in as many safeguards as possible and noted that if directors voted to proceed and the contractors started hiring, it will be that much more expensive to terminate the contract in the future should BART not secure federal loans or should the Port money not come through.

“I will see what I can do. I obviously don’t want to put the public money at risk. I will see if we can somehow add more protections,” he said.

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The fatigue is palpable, but the battle over BART”s Oakland Airport Connector (OAC) is nowhere near its conclusion. That’s the message coming out of yet another marathon hearing today at the Metropolitan Transportation Commission (MTC), the region’s transportation planning body, over the merits of the airport connector, which I would argue has now become the second most controversial regional transit proposal behind the California High Speed Rail Peninsula alignment.

Despite a long history of protests by a coalition of transit advocates, the MTC’s Programs and Allocations Committee voted to endorse a $20 million swap of money from two freeway projects to the airport connector, a shifting of highway money to transit those same advocates would probably support if it were being geared toward other projects, instead of a $500 million, elevated tramway.

In a scene that has repeated itself many times, scores of people testified for more than an hour at the MTC hearing, offering nearly verbatim testimony to what has been said over the past year at numerous BART, MTC, Oakland City Council and Alameda County Congestion Management Agency hearings. On one side were the construction and trade unions desirous of jobs BART has promised will be created by the OAC, on the other transit advocates who think the $500 million for the OAC could be used on a more economical bus rapid transit option and for core capacity investments at BART and AC Transit.

BART likens the struggle over the OAC to other cornerstone transportation projects like the Bay Bridge, the Golden Gate Bridge, or even the creation of BART itself.

“This is the same argument of the opponents of BART in the 1960s who didn’t want BART being built at all,” said BART spokesperson Linton Johnson. “It’s really difficult for us and frustrating for us, trying to do what you know is right, building for the future, but ten years from now we’re going to be vindicated, twenty years from now we’re going to be vindicated. We’ve got to think generations ahead.”

“The people of yesteryear had to fight like hell to get BART and today we have something that is priceless,” he added.

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The Federal Transit Administration has increased the likelihood the Metropolitan Transportation Commission (MTC), the Bay Area's regional transportation planning and funding body, will undergo a full civil rights investigation after it sent a letter last week [PDF] insisting the MTC turn over documents detailing its protocols for monitoring civil rights practices of the government agencies and private groups it gives federal money. Civil rights and transportation advocates are confident the MTC doesn't have those protocols in place and argue the FTA investigation will show a pattern of discriminatory funding of transportation projects in the Bay Area that dates back decades.

The federal inquiries started after Public Advocates, a civil rights law firm in San Francisco, filed a formal complaint with the FTA over BART's failure to conduct an equity analysis for its fare policy related to the construction of the controversial Oakland Airport Connector, an elevated tramway that would connect the Oakland Coliseum BART station to the Oakland Airport. As a result of the complaint, the FTA investigated BART and found it didn't conduct the necessary fare analysis as required by federal Title VI civil rights law and denied $70 million in federal stimulus funds for the project. The FTA subsequently initiated a full investigation of the transit agency across all its applicable practices.

Because the MTC has given substantial funding to BART over the years and specifically for the OAC, the FTA in February requested the MTC provide justification of its Title VI compliance [PDF].

MTC Executive Director Steve Heminger argued in a March letter [PDF] that transit agencies such as BART, as subrecipients of federal funding, are responsible for ensuring they have done their due diligence and that they are not using the money on projects that discriminate against people of color or low-income communities. Heminger essentially took a narrow view of several FTA rules, saying because MTC is "not a State DOT or State administering agency," it was not responsible for mandating Title VI compliance for that funding.

In FTA's most recent letter, Director of the Office of Civil Rights Cheryl Hershey pointed to several other broad requirements, including an FTA Master Agreement the MTC signs each year, that mandate the MTC monitor Title VI requirements, even of its subrecipients.

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While BART will soon take a funding plan to its Board of Directors for the Oakland Airport Connector, Carl Anthony, the founder of Urban Habitat and a fellow in the Department of Geography at Berkeley, has called on the agency to wait to proceed with funding the OAC until the Federal Transit Administration (FTA) deems the project compliant with federal Title VI civil rights standards.

The FTA had denied BART $70 million in stimulus funding earlier this year because the agency failed to conduct the required fare analysis to determine the impacts of the OAC on low-income riders.

In a letter addressed to Board of Directors Chair James Fang, Anthony said by proceeding with a funding plan before the project was deemed compliant, BART would fail to meet the "gold standard" of civil rights, its purported goal.

From the letter:

In February, BART achieved the dubious distinction of becoming the only stimulus applicant to be denied funding on civil rights grounds. At the time, BART's staff and Board declared their commitment to becoming the "gold standard" for civil rights, and recommitted the agency to completing not only the necessary analysis of the Oakland Airport Connector project, but the entire corrective action plan that FTA found necessary as a result of agency-wide civil rights non-compliance.

By asking the BART Board to approve a funding plan for a project that has not yet completed an approved fare equity analysis, staff is signaling that this project will be pursued without regard to its civil rights impacts and compliance. Your approval of a project funding plan before the Title VI impacts are known would be a declaration that BART does not care about results of the pending analysis.

I respectfully ask that the BART Board hold true to its promise of rising to the "gold standard" on civil rights by holding off on any decisions about this project until FTA has approved the required civil rights analysis for the project.

BART spokesperson Linton Johnson said the advocates don't understand the process. "BART has kept the FTA in the loop on our efforts to secure more funding and the FTA does not have a problem with us doing this work," said Johnson.

"The FTA was only requiring us to get its approval on our action plan to cure the Title VI deficiencies," he added. "The FTA isn't going to be issuing another round of approvals. The process simply requires that we continue according to our plan. Once we completed the steps in the approved FTA plan, we have completed the FTA's requirements."

Even though BART is not in compliance with the Federal Transportation Administration's (FTA) Title VI civil rights regulations, the agency has sought funding from numerous local, regional, state and federal outlets to continue the Oakland Airport Connector (OAC) project, a three-mile elevated tramway that would connect the Oakland Airport with the Oakland Coliseum Station.

Internal documents obtained by Streetsblog (and The Bay Citizen, which reported on the matter this morning) revealed an internal scramble by BART staff and an array of local and state transportation agencies to come up with money to replace the $70 million in stimulus funding the FTA denied BART because of its failure to demonstrate a suitable fare analysis for the OAC project.

While BART staff acknowledged they were working to replace the funding at a board meeting on May 28th, General Manager Dorothy Dugger said there was nothing specific to report to the public or the board, despite a request by TransForm and BART Director Tom Radulovich to reveal in greater detail where staff was seeking funding.

When asked why BART wouldn't release more information about the possible sources, Dugger told Streetsblog, "It is a work in progress. When a full funding plan is developed we'll bring that back to the board for their review and consideration. We're working with funding partners in the region and the state to see if we can identify funding to replace the stimulus funds that were lost."

But according to internal documents dated May 18th, BART worked out an extensive funding plan for the OAC, now with a price tag of $484,136,000, and with numerous scenarios for filling the gap left by the FTA deficit.

Line items in the funding plan include: $10 million from an Alameda County Congestion Management Agency funding swap, $12,801,000 from The Public Transportation Modernization, Improvement, and Service Enhancement Account Program (PTMISEA) created by Proposition 1B, $10 million from the Alameda County Transportation Improvement Authority (ACTIA) in another funding swap, $10 million from BART's Capital Bond Reserves and between $10 and $20 million in a funding swap from the Corridor Mobility Improvement Account (CMIA), a regional fund for improvements to the carpool lane network, among other projects.

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One development lost in the media feeding frenzy around the Federal Transit Administration (FTA) denying BART's request of $70 million for the Oakland Airport Connector (OAC) was a letter the FTA sent to the Metropolitan Transportation Commission (MTC), the Bay Area's planning body, initiating a review of its civil rights policies [PDF].

In the February 3rd letter, FTA Office of Civil Rights Director Cheryl Hershey argued that MTC relied on BART's assurances that it had conducted proper equity and fare analysis for the OAC, but there wasn't evidence the MTC had a mechanism in place to check the veracity of BART's claims. Given that the FTA subsequently found BART's civil rights policies inadequate, the federal agency wanted MTC to produce documentation to explain its policy on civil rights adherence by fiscal subrecipients like BART.

Hershey noted that despite public testimony by Bob Allen of Urban Habitat at an MTC meeting on July 8, 2009 and a subsequent letter warning of BART's "failure to produce the required equity analysis for this project," the MTC proceeded with support for the OAC.

In the letter, Hershey wrote:

As you are aware, BART is a subrecipient of the MTC, and, therefore, MTC is responsible for ensuring its subrecipients comply with Title VI, the DOT Title VI regulations, and FTA Circular 4702.1A. Your agency is responsible for documenting a process that ensures that all MTC subrecipients are in compliance with the reporting requirements of FTA C 4702.1A

The fact that BART has not conducted the necessary service equity analysis for the OAC project or fare equity analysis raises concerns that your agency does not have procedures in place to monitor its suprecipients.

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Federal Transit Administrator Peter Rogoff has been shaking up transit agencies across the country in the short year he has headed the FTA, from working with advocates in the Twin Cities who wanted additional stops added in under-served communities along the Central Corridor rail route to his decision to deny BART the $70 million it requested for its Oakland Airport Connector.

Now, in a speech delivered this week in Boston, Rogoff set off another heated debate among transit advocates and operators about the federal government's role in funding expansion projects when the agencies building them don't have enough operating money to run their existing systems.

Rogoff asked how wise it is of the FTA to put money into new transit capacity, particularly expensive rail capacity, when virtually every operator across the nation has raised fares and cuts service because of lower sales tax receipts and ubiquitous cutbacks in city and state transit funding levels.

"At times like these, it's more important than ever to have the courage to ask a hard question: If you can't afford to operate the system you have, why does it make sense for us to partner in your expansion?" asked Rogoff.

He went on to question some rail expansion projects when a bus rapid transit system would be far cheaper and could achieve similar ridership benefits.

"Paint is cheap, rails systems are extremely expensive," said Rogoff.

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