Taxpayers are, once again, victims of bait-and-switch on a government-managed transit project in Oregon. This one involves a multi-million dollar shuttle between two elevated passenger stations in southwest Portland. This aerial tram will do little to reduce the area’s traffic congestion problems, which are seven times worse than they were in 1980. Moreover, the original plan that was developed, promoted and approved to build the aerial tram shuttle contained cost and benefit projections that were simply “too good to be true.”

As a result, the tram will require much higher taxpayer subsidies and will probably deliver far fewer benefits to the public than those projected in the plan. Unfortunately, the tram’s problems are not unique. Ultra-optimistic projections have been the rule, rather than the exception, in transit plans approved by local, regional and state governments in Oregon since the 1970s, when Neil Goldschmidt rose to power and many leaders in the state became “Followers of Neil’s Transit Ideology” (FONIs).

These missed projections, which will be examined here, were sins of both commission and omission made by FONIs and the government agencies they represent. Part two next month will outline a money-saving program to protect future taxpayers from “too good to be true” projections and bait-and-switch transit plans. Maybe a few FONIs can be rehabilitated by showing why some claims made about light rail transit, for example, were not only false, but ridiculous.

Both Metro and TriMet, whose managements have been dominated by FONIs, have prepared transit plans during the past 25 years that contain some of the lowest cost estimates and some of the highest ridership estimates “that money can buy.” Metro is the government agency responsible for regional transportation planning for most of the Oregon portion of the Portland- Vancouver metropolitan area. TriMet is this area’s largest transit agency.

Metro released a regional transportation plan in the late 1970s with some “too good to be true” cost and benefit projections for the year 2000. Metro’s plan and its rosy projections were used by TriMet to get billions of dollars from the Federal Transit Administration (FTA) and the State of Oregon for new light rail lines. How did some of the Metro/TriMet projections turn out?

The plan: Fares would cover half of TriMet’s operating costs by 2000.
The reality: Passenger fares covered less than 25 percent of these costs and less than 15 percent of total costs. Taxpayers paid the rest.

The plan: TriMet ridership would grow to 253,100 riders per day between 1980 and 2000.
The reality: Ridership grew by less than 28 percent of Metro’s projection.

The plan: The use of carpools to get to work would increase dramatically by 2000.
The reality: Carpools declined dramatically.

The plan: “The public will have to lower its service expectations slightly and be willing to accept a minimally higher level of congestion on the (region’s) highway and transit system” between 1980 and 2000.
The reality: Portland-area residents experienced one of the fastest growth rates in traffic congestion in the U.S. between 1980 and 2000.

The transit planning operations of both organizations should have been reformed or replaced based on these results. Instead, Metro prepared a new regional transportation plan in 1998, presumably to help guide the metropolitan area out of the mess Metro helped create with its previous plan.

However, Professor Kenneth Dueker of Portland State University (PSU) made the following comments about this new Metro plan:

“Portland residents were promised that investments in rail transit would obviate the need for investing in highways. This is proving to be untrue.

“The urban transportation planning process in Portland is in trouble…Transit and density targets are too high to be achieved.

“Portland tends to be more optimistic about increasing transit ridership and curbing the auto than any other metropolitan planning organizations. The peer comparison suggests the Portland Regional Transportation Plan estimates to be wishfully optimistic or unrealistic.”

Professor Dueker has warned the public about some of the ultra-optimistic claims of FONI-led government transportation planning agencies in the past. Unfortunately, his analysis of Metro’s latest plan indicates that bait-and-switch transit planning is still alive and well in Oregon.

Two other PSU professors, Anthony Rufolo and Gerard Mildner, have also warned the public when Metro, TriMet, Goldschmidt, or prominent FONIs (e.g. Barbara Roberts, Charlie Hales, Carl Hostika) made claims that, according to Rufolo, “border on the absurd” about proposed new light rail projects in the Portland area.

For example, Goldschmidt and other prominent FONIs actually claimed that the proposed South- North MAX light rail line would have the “capacity of a six-lane freeway.” These two PSU transportation researchers showed why this claim was ridiculous. Rufolo pointed out readily available data that show the Eastside MAX light rail line “carries fewer than one-fifth as many people as the Banfield Freeway.”

They also pointed out that TriMet carries a smaller percentage of commuters to work now than it did in 1980, before MAX went into service.

As part of its application for hundreds of millions of dollars in federal and state funds, TriMet projected that the planned Eastside MAX light rail line would carry 42,500 passengers per day in 1990 (the Bait). Unfortunately for taxpayers, it carried only 19,700 passengers per day (the Switch), less than half of TriMet’s forecast. Nevertheless, the FONIs declared the project a great success.

Interestingly, Professor Peter Gordon of the University of Southern California also offered a forecast of the 1990 Eastside Max line ridership before it opened. His forecast was right on target, as it has been for other new rail transit lines in the U.S. and Canada.

But neither Washington County nor any other Oregon transportation agencies asked Gordon to prepare projections for the TriMet commuter rail line planned between Wilsonville and Beaverton. Too bad; they would have learned that the cost and ridership projections for this multi-million dollar project are, once again, too good to be true.

From a taxpayer’s perspective, this intra-suburban rail project makes the bait-and-switch projects of FONI Mayors Vera Katz and Rob Drake—the Portland Tram and the Beaverton Round, respectively—look like attractive ways to waste taxpayer dollars.

Although their projections show that the segment of the Westside MAX light rail line between Beaverton and Hillsboro would cost taxpayers more than $150,000 (in 2005 dollars) a year for every additional car it would take off the roads—1,423 person trips per year per car times $109 (in 2005 dollars) per new transit trip equals $155,000—TriMet and Metro recommended it be built. This suburban rail project ranked so low in cost-effectiveness that the FTA wouldn’t provide funding until Oregon’s congressional delegation got the regulations switched so that rail line “extensions,” such as the Beaverton-Hillsboro segment, became exempt from federal cost- effectiveness rules for new rail lines.

In the late 1990s, when Tom Walsh, a former campaign manager for Goldschmidt and the founder of Walsh Construction, announced his resignation as the General Manager of TriMet, Willamette Week made the following comments about another one of this transit agency’s ultra- optimistic projections:

“[Walsh’s] achievements are tempered by one sobering truth: TriMet has failed at its core mission—ridership. Though our transit system carries more riders today than before Walsh took over, the numbers are hardly impressive—and they don’t begin to approach TriMet’s own projections.

“In 1993, TriMet said that by 1998 it would carry 325,000 riders per weekday. Instead it carries fewer than 240,000—an embarrassing shortfall… Walsh’s low point came a few years back, when he engaged in backroom shenanigans to oust Loren Wyss from the TriMet board—and then denied doing so.”

Loren Wyss, a respected investment banker, was once the chairman of TriMet’s Board of Directors. He made the mistake of asking Walsh some pointed questions about business deals that Walsh didn’t want to discuss. Even Governor Barbara Roberts—his future wife’s boss— decided to punch Wyss’ ticket. FONIs often use their influence to punish opponents, to reward supporters (e.g. with jobs and contracts), and to try to rewrite history. A January 1989 Oregonian editorial, “Taken for a TriMet ride,” chastised the transit agency for hiding the fact that its ridership had dropped the previous year: “Rose-colored glasses aren’t required to read TriMet’s newest annual report. That flattering hue is carefully built into the document… Its omissions make it less an annual report than another publicly-funded, agency brag sheet.”

And when the new MAX line opened for business a year late without some important features, the Oregonian’s Gordon Oliver did a good job of exposing TriMet’s phony claims that the Westside light rail line was completed “on time and on budget.”

However, no newspaper has exposed the “higher fares” deception that the transit agency pulls off every year or two. When TriMet management is considering implementing higher fares, they would like the media and the public to believe they are trying to keep passengers paying a fair share and to keep taxpayer subsidies as low as possible. However, TriMet never mentions that its average fare, excluding the effects of inflation, has been declining, while costs per passenger trip have been increasing over the years.

As a result, TriMet’s average fare in constant 2005 dollars, $0.78 in 2005, is only half as much as it was in 1971, $1.52, and per capita taxpayer subsidies of TriMet’s capital and operating costs are more than six times higher than they were in 1971. TriMet’s average fare in 2005 was so much lower than its base fare because it provides so many free (e.g. Fareless Square) and discounted rides.

In the early 1990s, the Oregon Department of Transportation (ODOT), with help from other FONI-managed agencies, established three transportation goals for Oregon. In 2001, a decade or so later, the Oregon Progress Board came out with a “report card” to measure how well the state was doing in achieving these three goals. Here are the grades the Progress Board gave the state:

F -- failed to achieve goal of reducing the use of Single Occupant Vehicles by commuters.
F -- failed to achieve goal of reducing Vehicle Miles Traveled per capita.
F -- failed to achieve goal of controlling the growth of traffic congestion on Urban (i.e. mostly Portland) Interstate Highways.

It should be noted, Governor John Kitzhaber, a well-known FONI and a friend of Goldschmidt, chaired the Progress Board when these poor grades were given. The state has since corrected this troublesome situation; the grading system now awards good grades for the same poor performance in reducing traffic congestion.

And “Dr. Do-little,” as Republican legislators nicknamed Kitzhaber, was also governor when ODOT produced a Statewide Public Transportation Plan with no ridership projections. Although this useless document wasted thousands of taxpayer dollars, it was one of the few things actually produced during the past decade by ODOT’s bloated Public Transit Division, which moves paper rather than people.

In 2003, Portland City Council approved a plan to build the aforementioned tram for $15.5 million (the Bait), on the basis of endorsements from Mayor Katz, her good friend Goldschmidt and the city’s transit planners. In April 2006, with construction of the tram approaching the halfway mark, a somewhat-new city council and a new mayor were bludgeoned into accepting a revised plan to build the tram for $57 million (the Switch). But the most unpleasant surprise about the tram’s cost to taxpayers is still to come.

It is possible to put a quick stop to “too good to be true” projections and bait-and-switch transit planning in Oregon—the legacy of Goldschmidt’s delusions and deceptions about light rail transit. All that is needed to implement a money-saving program of this kind is a governor or political leader willing to fight these corrupt practices at all levels of government. Rather than being hoodwinked by overblown projections, a willing governor could invite independent experts to help find the most cost-effective ways to address transportation, and related energy, environmental and economic problems, throughout the state. Next month in part two we’ll look at some of the possibilities.

BrainstormNW - July 2006