Local Contribution 101

by lewwaters


College 4Submitted by Professor Robert Dean

Let’s get started.

Mike Briggs, thank you for launching into facts, now, in the ongoing debate over the costs and benefits of the CRC to the local community. I know numbers are not your thing so I’ll try to make it simple for you.

OK, we’re not getting a $3.4 billion bridge for $450 million. Here’s the latest cost breakdown from the CRC:


The table on page 2 shows how it all breaks out, at least, it shows how the initial capital costs break out for this first stage (they will build out the $3.4 billion project in dribs and drabs over the years as money becomes available).

Stay with me, now.

Greg Owens, where are you going?

As you can see from the table this first stage will cost $2.8 billion capital cost. Of that, the feds pay a little less than $1 billion; the two states pay a little less than ¾ of a billion; and the local community (tolls) pick up the remainder – estimated at $1.1 billion or 39.3% of the total initial capital cost of the whole first phase of the project.

For those with humanities majors 39.3% is somewhat more ($167 million more) than the 1/3 share we were baited with before the switch.

OK, Greg, you may be excused now. This is where it gets complicated.

Remember I said this is the first phase? Well, originally this was going to be a $4 billion infrastructure project. After it got past people like Tim Leavitt the engineers started to realize that $4 billion is a lot a lot of money. So they began to pare it down by taking out interchanges and bridge upgrades and deferring them to later stages or phases of the project – they will still have to be built one day, probably financed with tolls, and it will cost more when they do, but just not in this first bight.

Well, anyway, suffice it to say that the true initial capital cost of the completed project is still around $4 billion – not the $2.8 billion for this first phase.

So what does that do to our local share?

Oops! There goes Jim! Jim, come back!

OK, our local share is whatever the states and feds don’t pay for.

I know. I know. The Southwest Washington Regional Transportation Commission (RTC) that Jim sits on made it a condition of approval of the Locally Preferred Alternative that the local share was to be taken out only as a last resort and that the bulk of costs should fall on the states and feds. Oh well, that’s all a matter of interpretation, isn’t it? If the folks want to try to squirm out of it I’m sure C-Tran will hire an attorney out of Seattle to make sure the local taxpayers cough up their last slimy dimes.

I digress. So the local share is whatever the states and feds don’t pay for – including cost overruns; usually 30%. Now, the local share is to be paid by tolls, and future phases will be paid by tolls, so, Mike, can you tell the class what percent of the total capital cost of the CRC light rail project will fall to the local community?

No, not one third. Use a calculator.

OK, here’s how you do it.

The total build-out initial capital cost is $4 billion. The feds and states are kicking in $1.7 billion. Then, the local share is what? Yes! $2.3 billion. Way to go, Mike! You’re getting the hang of it – I knew you could do it! OK, rounding 3rd base – $2.3 billion is 57% of $4 billion. 2.3 on top, divide, times 100, what do you get? High five!

OK, that’s probably as much as Mike can handle for the day. Next week we’ll get into the high cost of tolls and a new concept for many of you – debt service. Read up in advance at these two websites and I’ll be picking two people at random to explain why the 30 year local contribution will be around $8 billion. Hint: tolls are expensive and you have to collect around twice the face value of the tolling bonds to pay them back and then the 30 year interest rate is around 5% for your debt service.



Class dismissed.

7 Comments to “Local Contribution 101”

  1. Professor Dean, I think you got it. Also, add in expensive extensions of the trolley car line when it is revealed that the initial installation only handles a fraction of the estimated traffic. Of course, the lack of flexibility will force numerous extensions to gather up more commuters — with costs always coming in 2/3 higher than expected. (I lived through BART in the SF Bay Area, so I know how this works…)

  2. Nice easy one Professor! Do you think that Briggs or Moeller, or Owens will understand?

  3. Carolyn…the easiest answer in the world regarding your question to the Professor….


  4. None of those slime allow any facts to interfere with their biases.

  5. That’s not true. THEIR self-proclaimed facts are the ONLY facts they adhere to. Dare anybody say otherwise!!!

  6. Hmm…Interesting!!! Here’s a little article worth reading about TriMet Executives receiving pay raises while fares go up!!!


  7. Spot on, what we need to do is have the “pro CRC/LRT people” financially responsible for all costs and those of us who are not get a pass.! This would certainly give them cause to pause and THINK!

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