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SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICT
Minutes of Special Meeting of theBoard of Directors of the District
March 4 , 1976
Upon notice duly given, the Board of Directors of
the Southern California Rapid Transit District met at a
Special Meeting in the District Board Room, 1060 South
Broadway, Los Angeles , California , at 1: 50 p. m. on
March 4, 1976 , at which time President Byron E. Cook
called the meeting to order.
Direc tors presentGeorge W. Brewster(Entered at 2:15 p.
Byron E. CookAdelina GregoryMarvin L. Holen
Thomas G. NeusomJay B. PriceGeorge TakeiBaxter Ward(Entered at 2:17 p.
Direc tors absent:
Donald GibbsRuth E. RichterPete Schabarum
Staff present
Jack R. Gilstrap, General ManagerRichard T. Powers , General CounselJoe Scatchard , Controller-Treasurer-Audi torGeorge L. McDonald , Manager of Planning & MarketingR. K. Kissick, SecretaryRichard Gallagher, Mana~er of Rapid TransitRalph de la Cruz , Princ~pal Analyst
Also present were members of the public , the news
media and the following members of the Los Angeles City
Council Ad Hoc Committee on Rapid Transit:
- John Ferraro , ChairmanErnani BernardiLouis R. NowellRobert M. Wilkinsonlev Yaroslavsky
President Cook announced that the purpose of the
special meeting was to receive a progress report from
the District s consultants regarding Supervisor Ward'
Sunset Coast Line proposal in order for the Board to have
as much time as possible to consider the consultants ' in-
put and information to be conveyed to the Legislature in
connection with pending legislation necessary for a June
election on the rapid transit proposal. He also stated
that the consultants ' final written report would be re-
ceived next week, at which time it was expected the Board
would make a decision one way or the other on whether to
place the measure before the voters.General Manager Gilstrap briefly reviewed the con-
sultants ' scope of work and called on Principal Analyst
Ralph de la Cruz to present the consultants.
At this point , Director Price interceded and re-
quested a ruling from General Counsel Powers if it would
be in order to propose amendments to Assembly Bill 1246.
Mr. Powers replied that since portions of AB 1246 related
to rapid transit consideration of amendments would be in
order.
Mr. Price moved that AB 1246 be amended to include
that no appointing or electing authority would have its
numerical representation on the present RTD Board reduced
on the new transit commission, and that the two cities
that receive statutory authority to make appointments to
the new transit commission by the mayor , or by the mayor
with the corresponding city council approval , should not
be voting members on the City Selection Committee of the
League of California Cities , as is the present case with
Los Angeles where the Mayor appoints its present two mem-
bers with council approval and do not vote on the City
Selection Committee s four corridor representatives and
which should be maintained in the new commission and not
reduced from four corridor directors to two directors;which proposed amendments would in effect raise the mem-
bership of the new commission from eleven to thirteen
which motion was seconded.
After discussion on the merits of whether amendments
should be proposed at this time , and in view of the fact
that amendments were to be discussed with the author
(Assemblyman Ingalls) at a meeting to be scheduled in the
next few days , Mr. Price moved to table his motion until
the special meeting of the Board which was scheduled on
Tuesday, March 9 , 1976 , which motion was seconded and
unanimously carried.
(Director Brewster entered the meeting at 2: 15 p.and Director Ward at 2:17 p.
Mr. de la Cruz then introduced the consultants who
made presentations as follows:
Ki Suh Park, Gruen Associates, Inc.
Socioeconomic environmental and planningimpact factors
Donald Green, Stanford Research Institute
Financing issues
Emanuel Diamant, De Leuw, Cather & Co.
Capital and operating costs and engineeringfac tors
(Direc tors Neusom and Holen and General ManagerGilstrap left the meeting at 2: 45 p.
George Adams, Mobili ty Systems & Equipment Co.
Issues of right-of-way adaptability ~uide-way construction, hardware availabil~ty,energy requirements and maintenancefacili ties
Also present and responding to questions was Donald
Hodgman, representing O' Melveny & Meyers , the District
Bond Counsel.
(Directors Price and Ward left the meeting at3: 15 p.m. Director Price re-entered the meetingand Director Brewster left the meeting at 3: 37 p.
A question and answer period followed the presenta-
tions by the consultants.
(Director Price left the meeting at 3: 55 p.
A reporter s transcript of the meeting is attached
to these Minutes as EXHIBIT
President Cook stated the Board would be receiving
the consultants ' final reports next week , and in the ab-
sence of a quorum the meeting was adjourned at 4:00 p.
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SPECIAL MEETING OF THE BOARD OF DIRECTORS
SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICT
1060 South Broadway
. Los Angeles, California
March 4, 1976
1:45 p. m.
JU&~ITA GONZALEZ Reporter
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1.6 Q.I PRESEN'
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BYRON E. COOK, President
THOMAS G. NEUSOM, Vice President
GEORGE W. BREWSTER (arrived 2: lSpm)
ADELINA GREGORY
MARVIN L. HOLEN
JAY B.. PRICE
PETE SCHABARUM
GEORGE TAKEI
MR. KISSICK, Secretary
BAXTER 'i-JARD ( arr i ved 2: 18 pm)
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MR. COOK: The special meeting of the Board
of Directors will come to order.
Mr. Secretary, please call the roll.MR. KISSICK:
MR. COOK:
MR. KISSICK:
MR. NEUSOM:
MR. KISSICK:
(No response.
HR. KISSICK:
(No response.
MR. KISSICK:
MS. GREGORY:
MR. KISSICK:
MR. HOLEN:
MR. KISSICK:
MR. PRICE:
MR. KISS ICK :
(No response.
MR. KISSICK:
(No response.
MR. KISSICK:
MR. TAKEI:
By ron Cook.
Present.Thomas Neusom.
Present.
Geo rge Brews ter
Donald Gibbs.
Adelina Gregory.
Present.Marvin Holen.
Present.Jay. Price.
Present.Ruth E. Richter.
Pete Schabarum.
George Takei.
Here.
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MR. KISSICK: Baxter Ward.
(No response.
(Hhereupon , Mr. George W. Bre,vster entered.
The special meeting of the R.MR. COOK:
Board has been called today to receive a progres s report
from the team of expert consul tan ts which was hired to
evaluate and report their findings and recommendations
on Supervisor Baxter Ward' s Sunset Coastline Rapid Transit
Proposal which he has requested the R. D. Board to place
before the voters in June of this year.
The R. D. Board will not be making a decision
We are receiving this progress report today sotoday.
that the Board can have as much time as possible to consider
the consul tan ts ' input and, further, so that this informatior
today can be conveyed to the Legislature in a timely manner
inasmuch as they have before them the enabling legislation
necessary for a June election on the Rapid Transit Proposal.
We will receive the consultant' s final .wri tten report next
week and , following that, will expect to make a decision
one way or the other on whether to place the measure before
the vo:ters.
The consul tan ts we will be hearing from
today were asked to review all aspects of Supervisor Ward'
proposal, including the socio-economic, environmental , and
community impacts and benefits, capital and operating costs
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construction feas ibili ties, construction timespan andu1 timately, the financing feasibility of the program. Last
recei ved the inputSaturday, the Board and its consultants
from a number of agencies and individuals at our all-day
study session held at the County Hall of Administration.
This proposad program will have a profound impact on our
community and it behooves all of US to give it maximum
consideration at this time.
I would like to call upon General Manager
Jack Gilstrap to begin the report.Thank you , Mr. President.MR. GILSTRAP:
re pleased to have the cons iderable
attention that we see being given this report in the
audience, and we re particularly pleased to have with us
today the Rapid Transit ad hoc committee chaired by
Councilman John Ferraro, City of Los Angeles;
As you know, we have had this work underway now
for a number of days and we ve had a team of consultants
that we re very pleased with , and have a great deal of
confidence in, working under the general coordination of
Ralph de 1a Cruz in our 0 ffice.I would like to call upon Ralph to introduce
the consul tan ts and call upon them to present their report.BeforeMR. COOK: Excuse me. Mr. de 1a Cruz.
we get into the reports by the consul tan ts, I believe
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Director Price has a question.
HR. PRICE: Thank you , Mr. President.
I would ask for the indulgence of the Board
for just a few brief moments. I have been in contact this
morning wi th the Chairman of the Transportation Committee
of the League of California Cities and he wished for me to
express our concern on this AB-12 46. I would ask counsel
right now before I proceed any further -- and I want to make
it as quickly as possible -- is it possible for me -- Do
I have the prerogative of addressing a short statement,
and hopefully a motion, on an item relating to legislation?
MR. POWERS: Yes, Mr. Price. The meeting is,among other things, to consider legislation relating to
Rapid Transit; and AB-~246 relates to Rapid Transit; so
your discussion would be perfectly all right.
Under the new legislation ofMR. PRICE:
AB-1246 it has been retributive that this new label of
government , the one that will be handling all funds
relating to transportation and most of the long-range
planning; and which our Board has taken an action as of
yesterday not to be in opposition but to work with the
authors to bring about a satisfactory legislation that
will be satisfactory to all. The concern that has been
expressed to me today, and I hope the Board would give me
the indulgence to allow me to make an amendment to the
motion I made yesterday because under the legislation as
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it' is ' in our hands now, it winds up with an 11-member Board,
the same as we have now -- five by the Board of Supervisors
and thr~e by the City of Los Angeles and one by the city 0 Long Beach. Both Los Angeles and Long Beach are statutory,
appo inted by the Mayor and con firmed by the Council. Then
the other 75 cities 0 f the county have reduced from four
to two membe rs . Now, bear in mind , Mr. Chairman, that
the L. A. members and the Long Beach members roughly
represent about three million people. This is in round
figures and the four city, selection city members represent
roughly five million people. And so this would be a diminu~
tion . :of : one-half of the voting strength of five million
people in 75 cities throughout the county.
I would humbly request that in our action of
yesterday indicating that we are rescinding our opposition
as such to 1246 and wish to work with the authors in,
shall I say, compromise legislation that will be acceptable
to all. Based on the present representations that have
been made to me today indicating that five million people
of our county representing 75 cities under the new plan
are truly going to lose two representatives because Los
Angeles and Long Beach -- their members will be statutory
confirmed by the Council, and will not be elected by the
city selective committee and not representatives of the
other 75 ci ties.
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I would humbly request that I be able to
make a motion that would indicate that our previous action
would stand, but that in our reconsideration with the
author of the bill that it be indicated that no appointing
authority would have its numerical representation on the
present R. D. Board to be reduced on the new transit
commission and that the two cities that receive statutory
authority to m~~e appointments to the new transit commission
with their council approve1 not be voting members of, the
city selection committee of the League of California
Cities as is the present case with Los Angeles that appoints
its present two members with Council approval and do not
vote on the other ci ties for represen tati ve s. In other
words, the plea that Il m trying to make is not that Il
against 1246 or our action rescinding our previous
disapproval of 1246, but in behalf of five million people
and 75 cities where this body is going to be the body that
will be the determining body for the handing out or the
distribution of federal money, state money, potentially
county money, SB-325 money and five mOT: , and they are
the ones that are going to be planning " ,8 long-range
planning.
I agree that in all respects 1246 will
probably become law, but I certainly do not agree that
five million people should lose two of their representatives
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in order to set up this new commission. I believe the
commission should be set up exactly as it has been proposed
to us with the supervisors having fi ve he~e and five there.
Los Angeles would move from two here to three there,
Long Beach gets one statutorily, not throughstatutorily.ve been reduced to two.the city selection committee.
We should remain with our same four statutory members and
I would like to amend the previous action to that degree
because I think , in all fairness, as honestly and humbly
as I can , it r s not right for us to take five million people
of this county that now have four representatives that
represent .them at the grass-roots level and say to them
re taking two of yourrepresen tati ves away" -- and I
didr1 r t say "take them away and give . them to somebody else,
because I approve of Los Angeles having greater representa-
tion and I believe it r s right that Long Beach have
represen tation , statutorily; but I do not believe it I
right to take five million people and compare them to
three million people and reduce their representation from
fo ur to two. This is wrong, and I humbly request your
indulgence that our staff, in your action of taking away
our opposition of 1246 yesterday, would include in that
action that we would desire that the Board be -- the new
Board -- would be so constituted as to continue to reflect
the existing representation as given by the city selection
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committee of four members.
This would, in effect, increase the proposed
legislation from 11 members to 13 members and I would
humbly request the Board to accept my amendment to yesterday I ~
motion and I will have to say in all candor , based upon
my talks today with the League committee and so forth,
that shall I fail, I will fight for this at every meeting
from here on out to protect the grass-roots representation
of 75 cities of this county until, hopefully, we can win
the battle.Mr. President , I so move.
MS. GREGORY: Somewhere along the line there
was a short motion. If you could , for the benefit of
our secretary --MR. COOK: We have the reporter. She got it
dm'ln .
MS. GREGORY: For the short mo tion Mr. Price
just made J I would second it.All right. We have the motionMR. COOK:
seconded.
MR. PRICE: This is only to go before the
legislature to tell them this is our desire; that's all.m not asking for the impossible. I am not asking for
the moon. I'm just saying, IILet' s don t disenfranchise
75 cities and five million people.
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HR. COOK: Any discussion on the motion?
MR. TAKE I : I think the issue Mr. Price:-
articulates is a very important one and certainly should
be considered , but I don t know whether it' s appropriate
at this point in the discussion for our Board to lock
ourselves in on just that. I think the parameters of
discussion should be as open and as wide as possible; so
I think my feeling at this point is that we should not
take a Board action locking ourselves in to just this
specific area.
MR. COOK: We have on the agenda recommendations
plural , with respect to pending legislation; , and while the
motion is out of order on the agenda I think. it' s a
matter for cons ideration at this time and the fact the
Board may or may not approve Mr. Price s motion .does not
in any Wqy detract from the possibility that other members
may bring up any recommendations with respect to 1246.
This is a special item.
HR. PRI CE : All I' m saying is, let us givethe staff this flexibility with you know , my prior motion --
you know , so they can lay this before us about if we go
through -- and I don t care how thin you want to cut this
meeting'
~ '
If our previous action stands without an action
by this Board then it' s a tacit approval that our Boardrecommends or is recommending that five million people and
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75 cities are going to have their representation reduced.
Now don t tell me if we don t say something somebody '
Sacramen to is going to get a different idea and say,
Let' s worry about those five million people and the 75
If we do not make a firm statementcities. They are not.
that we wish to protect the 75 cites and five million people
then I' m sure in Sacramento they re not going to be concerned
I don t mean to be the dog in the manger,wi th this issue.
but I feel so strongly over this disenfranchisement of
75 cities and five million people that I' m going to fight
this battle if it takes an hour at every meeting from here
on until the end of this Board; because I don t think it'
right and I think our Board should have the flexibility
to at least be ,able to discuss this wi th the authors of
the bill to see that this representation is not diminished
because -- follow me -- it' s not being diminished for the
supervisors and it' s not being diminished for Los Angeles.MR. COOK: I think you stated your motion very
well.
Any further discussion?
MR. HOLEN: I would not like the City Council
members of the City of Los Angeles to get the idea it does
expand the Council' s authority over the city s appointees
to the new commission. It, in fact, reduces the Los
Angeles Ci ty Council' s authority with respect to approval
of the city s appointees to the new commission -- at least
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AB-1246 does as it reads today.
Any further discussion?MR. COOK:
HR. NEUSOM: I would like to say this because
I believe that Mr. Price understands my sentiments. ~'lhat
we I re talking about is not flexibility, but rigidity
because if we start
--
we initially said we would talk
wi th the author wi th the full range of possibilities. Jack
had mentioned in his report the addition of two people to
represent this Board. All of those are things prospective
and to attempt to single one out today and say, " It'something that must be in any negotiated, agreement" - - I thin
II or any proposal for acceptable legislation " -- would not
be proper, and I think would tie our hands.
I have talked with the author and I think we
are going to in vi te him to meet with this Board, and I
think what Mr. Price has indicated is something that
should be taken up with him when he meets with the Board
before the legislation proceeds further.
I would simply say that I think to take this
action today would be
--
would create an additional problem
and since we have the other people to make reports, I would
--
I'll just confine my comments to that.MR. COOK: I would have to disagree, because
I think the sooner the author of this bill is aware of the
tenor of the community involved
--
I happen to agree with
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Mr. Price -- we re talking about a diminution on 1y
one area of the Board representation and not of the filIIBo ard . Everybody else is being expanded at the cost of
the ci ties and I think that is unfortunate. I think it'unfair and I think the sooner we convey our displeasure
to the author of this bill, I think the more likely
we will be to have some amendatory legislation.
MR. PRICE: Could Mr. Brewster be apprised of
what has happened? Because I do not feel we have the
six votes. Without the full Board here we may only have
about -- Mr. President, we I re going to meet again in formal
session when?
MR. COOK: Tuesday, 11: 00 a.HR. PRICE: I can see from the tenor that we
have at least two no votes and possibly three, which means
we only have seven people here. That would only give us
a maximum of five votes which is not suff icien t to pas s
this; and I' m not sure we get five votes. We~ ; might onlyget four, which is the ci ty selection commi ttee membersthemsel ves because all four of us are here and , this again
might point out very ironically that if the four city
selection committee members which are here -- and we would
vote to protect ourselves -- we would be voting in theminori ty -- and would lose the motion. I would ask that
in view of the fact I probably would not get six votes,
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that this be made an item of the agenda for our next formal
Board meeting.
Tuesday?
You want to move to table it untilMR. COOK:
MR. PRICE: Next formal Board meeting.
MR. COOK: All right.We have a motion to table. All in favor
indicate by saying " aye.
MR. GILSTRAP: The 9th of May, 11 :00 a.MR. PRICE: May?
MR. GILSTRAP: I I m sorry, March.
MR. PRICE: Those 0 f you that spoke ~gainst
it, -- March the 9 th happens to be my birthday -- how about
you guys coming through on March 9th on my birthday with
a little bi t better co~~ent than, I heard so far today.We have a motion to table theMR. COOK:
matter until next Tuesday I s meeting. All in favor indicate
by saying " aye.
(Chorus of ayes.
MR. COOK: Opposed.
(No response.
MR. COOK: The ayes have it.So ordered.
The matter has been tabled and we will continue.
Is the re a chance we can hearMR. WILKINSON:
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the presentation today?
That was the next i tern on theMR. COOK:
agenda.
Mr. President, I would likeMR. GILSTRAP:
now to call upon Ralph de 1a Cruz to introduce the
consul tants ' team and ask . them to proceed with their
presentation.Thank you. In vie", of theMR. de la CRUZ:
time, we will move on rapidly.
I want to state your Board has hired a team
of very expert consultants and they are as follows:
DeLeuw, Cather & Company Gruen Associates
Mobili ty Systems & Equipment Company and Stanford Research
In sti tu te.The basic charge has been to review and evaluate
and make some recommendations on the Sunset Coast Line
~roposa1 proposed by Supervisor Baxter Ward.
The firm of DeLeuw, Cather & Company represented
by its principal, Mr. Emmanuel Diamond, senior vice-president
in the company, will discuss with you, as per their basic
charge, the construction feasibility, capital costs,
operating costs, and the feeder systems as described in
the propos a1.
Gruen Associates represented by Mr. Ki Suk Park,
senior vice-president within Gruen, will give an overview of
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the environmental, socio-economic, land-use planning,
and community benefits and impacts as described in the
proposal.
Mr. Don Green, associate executive director of
the Stanford Research Institute will discuss with you the
escalation factors applicable wi thin the proposal, thebonding requirements and, in a sense, the financial
feasibility of the proposal.
Mr. George Adams, president of Mobility
Sys terns & Equipment Company, will discuss with you the
adaptability of the freeways for the proposal, equipment
avai1abi1i ty and energy requirements.
Again, let me review -- I would like for Mr.
14, Ki Suk Park 'to give a very brief overview and then to
be followed by Mr. Manny Diamond and then Mr. Donald Green
of Still1ford Research and George Adams of Mobility Systems.
MR. PARK: Thank you, Ralph.
Mr. President and Members of the Board.
We have evaluated the Sunset Coast Line
report and as documented in the report itself ,
attempt has been made to compare this plan with othera1 ternati ves. Basically, the plan proposed an extensive
countywide , transit coverage, rail transit coverage in
most of the cities in the Los Angeles County area. The
system covers over 200 miles and it provides an alternative
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means for travel to automobiles commensurate with the size
and scale of the Los Angeles County population and the
geographic area.
The proposal makes a commi tmen t that the
system will be built in accordance with the land, substantiallyin accordance with the land , and in a relatively short time
period. It specifies the names of the ci ties to be served
directly or indirectly and also gives the ci ties the rightof approval of station locations and this concept of
guaranty of equity in service is a key feature of the
plan .
Now , because of this extensive transit coverage
I believe certain lines will carry a high level 'trans it ervice patronage, and certain 1 ines undoubtedly
On the other ' hand , ifcarry low level. transit service.those lines now carrying high level transit patronage
are eliminated , then the transit network will be much
smaller, possibly concentrating in central cities and
thus defeating the key feature or weaking the key feature
of the plan, namely, equitable coverage throughout~:the
CoUll ty .
In terms of environmental impact, because of
the extensive use of freeway r~~hts-of-way and railroads
and flood control channels, it I S basically' a low impact
al ternative. In terms of displacement, relocation and
speeding construction and minimizing potential litigation
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and delays.However , in terms of the arterial, the situation
Special consideration shouldwill be slightly different.be given to those lines which are utilized in arterials.In this proposal it I S approximately 19 miles where impact
could be very significant depending on the alinement, station
location and also vertical configuration.
Just to give you some idea what kind of impact
the freeway related configuration looked like
--
I I d liketo ask Jim to show some slides on the screen.
This slide shows you the guideway in the
Basically, the purpose of thismedian of the freeway.
drawing is to indicate to you that in order to clear the
. .
overcrossings or undercrossings in the freeway itself
the guideway has to be substantially higher. Sometimes
it would have to be 45 to SO feet high to clear the
overcrossing.Next slide , please.
I f you are us ing on the side banks of the
freeway, it also has the same kind of situation.
clear the crossing traffic, the guideway has to be
substantially higher so either you have a road across
the track or the guideway has to be at a substantially
higher level throughout the en tire sys tern.
The next slide.
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The other aspect of the arterial guideway,
the center of the freeway also deals wi th the relationship
between station concourse and platform. Generally I think
it I S more desirable to have stations outside of the freeway
rights-of-way and the dark line indicates to you the
kind of transi tion required both horizontally and vertically.The number shows you the number of vertical
trans i tions required. The top shows one bridge connection
and one level vertical transition, whereas the elevator
embankmen t freeway configuration requires two vertical
transi tions , from the station and one to the station platform
and the
--
would require two vertical transitions in total;
so there ' is a substantial securi ty and surveillance problem
involved in putting this kind of system in the median
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the f ree-.;'l ay .
The next slide.
This shows you if it I S located in the median,
taking advantage of two freeway center lines, the vertical
transition will be much less critical in terms of therequiremen ts.
Basica1ly our conclusion is that the
system using freeway rights-of-way in terms of
environmental impact point of view is substantially less
because you I re already travers ing the high impact area.But I think we have to be cognizant of this effect in
terms of the patrons using those station facilities involved.
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The other aspect is the construction related traffic
dis ruption. I think at a given one year , possibly between
20 to 30 miles of the freeway would be under construction;so care must be exercised in making sure interim construction
related contruction will held to a minimum.
Now , one of the coissues related to use of
arterials is that when you move the main lines to where
the people are located and the jobs are located , the line
has to come closer to where the densely developed area is
located , therefore, the community impact will be greater
opposi tion from the community will be substantial , and
costs will escalate to the extent that the network scale-
must be substantially reduced to keep the costs in line.
. .
I like to emphasize that there is a really
key transportation dilemma facing this coun try nowadays
te rms public policy implications. think the
Sunset Coast Line has real potential cope with futureenvironmental and energy related crisls. think givesyou the option to deal wi th those cris is such as oilembargo or use of a1 ternati ve oil energy resources andalso provides a rule for public policy measures such as
encouraging the use of public transit and discouraging
the auto trips.The other aspect is that the report stipulates
or presents the concept of equal contruction by the
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allocation wi th stations roid guideways related to the
elevated guideways. We feel that this particular aspect
-- if you look at the National Environmental Policy Act
and Cali fornia Act -- I think the spirit of this policy act
would indicate the design and mitigation measure must be
corresponding to the particular environmental settings
in vol ved. So if you I re going to establish a budget, that
is construction budget, for each elevated guideway,
those budgets should be related to the environmental impact
it, ,creates; so therefore" there should be a varying degree
of budget allocations.In terms of the institutional agreement, I
think the fact that the city has the right to approve the
station location also means that some of the dissatisfaction
wi th the construction budget may affect also the approval
process involved; and I think this is one of the key issues
involved in this document.
Now, the land use implications of this report:
I think that if you have such extensive transit service
current land use impact could be resolved substantially;
and I think you could see throughout this coun ty that
community options for additional land development in terms
of traffic congestion and other environmental crisis point
of view, that having the alternative for mobility would
certainly give you the additional option and maneuvering
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room to develop sound land use policies.
There is another key issue involved as to what
extent the stations - located along the freeway rights-of-way
would affect the economic viability of activity centers.
I think any spaces and lines which are located along the
arterial will certainly support the acti vi ty centers as
they are; but, on the other hand , what are the effects ofthe stations located along the freeways? If you look at
the BART experience, that BART was insti tuted in 1962
and began operation in 1972. The evidence indicates that
no growth really has taken place around the station except'
in the San Francisco area and Oakland and Berkeley. Even
among those three down town areas it appears that San
Francisco, downto~m, attracted most of the economic deve10p-
ment potential available in that region; so I feel that the
fact that you have this system alone doesn t' automatically
mean you have growth around the stations; and if you 'llcompare this against Toronto, which is about 23 miles,
45 stations, in a very dense area , we see tremendous
development developing around stations, but with over 250
miles of the system , wi th 89 stations, just mainline stationwe feel that the system improvement will produce diffusive
effect focusing in many areas around the region rather than
affecting the economic viability of the existing activity
cen ters involved.
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I think in this regard , the land use P91icy
should be formulated to discourage growth around those
stations where it is not desirable from the community
standpoint. Also encourage development to take place
around the stations where the land use policy indicates
it should be encouraged. I think this is a key point.
On the other hand, if the transit accessibility changes
substantially in the future -- if we are talking about
three or four times the patronage forecast -- the situation
might change in the future.I have a couple of other points to m~~e. The
sys tern appeared to encourage longer trips in this region.Ho~vever, most of the transit area covered by this system
is already developed; so I think if there is going to be
an increase acces sibility related urban growth , I think
it will more likely occur on the bordered communi tieswithin or outside the Los Angeles County area. I think
the system will provide increasing employment opportunitiesand the federal funding is forthcoming.
This will further add to the job employment
increase.
So, in summary, I think the Sunset Coast Line
provides extensive transit service. It' s generally a
low impact alternative except in the arterial settings
and would be desirable if more time could be allocated to
this system cons truction and if more flexibility were built
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into scope arid the staging of the . system. And some of this
possible modification might be discussed by the presentation
to fo11mv.
Thank you very much.
MR. COOK: Thank you.
Mr. de la Cruz, I wonder if we might hear
from the Stanford group. We have two directors who have
to catch a plane to Washington. They request that it be
presented at this time.
MR. de la CRUZ: Yes, certainly.Mr. Don Green of the Stanford Research
Insti tute.MR. GREEN: . Do I unders tand these people are
leaving in 10 minutes ~ did you say?
MR. COOK: About 15.
MR. GREEN: Well, I' ll kind of start at theend.
We were requested to review the escalation
factors used in terms of inflation rates for operating
costs and construction costs and as well as estimate the
tax revenues that would come in from the proposal; and
we were also asked to look at the financing plan and
the marketabi1i ty of the bonds and the construction schedule.
We worked very closely with DeLeuw, Cather , who es timatedthe actual cost of the system. I will first highlight our
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findings and our conclusions.
wi th respect to patronage: The proposal
sugges ted one million pas sengers per day and both DeLeuw,
Cather and SRI felt was a reasonable estimate in the
future and we tested out this level of patronage with
plus or' minus one-third to see what difference it made
on the economic feasibility of the system.
wi th respect to fare revenues , the proposal
plans a 25 cent local fare and a flat fare not escalating
in the future. We felt that was an unreasonable as sumption
to make for a plan that goes on 15 years in view of the
fact other assumptions had a cost of living increase
three po int two percent in Los Angeles, a 10 percent
construction cost index increase, and six point four percent
increase in the sales tax. Therefore, we used , for purposes
of projection a three point two percent increase . in, thefare at small increments, like from 25 to 30 cents and
so forth. The escalation factors we employed were eight
point five percent for construction compared to the
10 percent used in the proposal. This is based on a
long-term trend in the region supported both by Ca1-Trans
Engineering News Record, and our own analysis.
With respect to operating costs, the proposal
used 10 percent increase in operating cost through 1982.
We took a long-term trend of seven percen t , ymich, again
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seemed consisten t with the history in the region and
Cal-Trans ' view of the matter.
1dith respect to the operating defici t,
assumed in each case it would be met by the one-halfpercent of the sales tax available to meet the operating
defici t. That is to say, operating costs minus fare revenue.
With the financing plan we assumed we would use all the
sales tax available to meet the construction costs including
both the one-half percent reserve for construction plus
10 ' the balance of the one-half percent available for operating
defici t, if such \vere available; and borrmving would be
resorted to on 1y when necessary.
Finally, we worked out a feas ib1e and regular-
construction schedule within the financial limitations.
Our conclusions , based on those steps in
the analysis, are as follows:
The proposed financial plan, mathematical
model framework set out in the proposal suggested $ 500
million per year borrowing or $7. 5 billion over 15 years.
We find that particular scheme will bump up against a
limi tation in the market probably in the first three years.That is to say, 1., 5 bi11iDn by 1980 and thereafter.take a minute to explain the limitations on the market.
We calculate that the market for municipal
bonds in the United States will probably continue to grow at
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about eight percent, which it has in the last several years.
The amount of money to any one issuer such as Southern
California Rapid Transit District could expect to get
would probably be no more than one percent of issues granted
in one year or no more than one-half percent of the
cumulative amount outstanding, which is to say, that, in
1975 amounted to $300 million a year of new issues and
approximately $1 billion cumulative amount outstanding
from one issuer.
When we applied the revised construction
cost estimates made by DeLeuw, Cather and applied to them
our escalation factors and then using all the available
sales tax, we found the proposed plan would bump into:a financial borrowing limitation by 1986, approximately
nlne years, and be above the available funds from there
on.
When we tried to design a construction
schedule with adjusted cost estimates that could be
financed in light of the market limitation we see, we
came out wi th a 25 percent period rather than the proposed
16-year period in the proposal.
Having made that analysis , we then made somesensitivity tests at the request of the transit committee.
We first asked: Could a one and a half percent sales tax
achieve the financing of this system within the 16-year
period construction schedule. The answer was, yes it could,
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wi th the approximately $5 billion in borrowing.
Secondly, would a one and a half quarter
sales tax rate with slightly higher fares
--
could that
finance the system within the 16-year period. The answer
, they could finance approximately 260 miles wi th about
$ 4 billions in borrowing.
~'lith one percent tax rate we then asked
and slightly higher fares
--
what could be financed in
16 years. ' The answer was approximately 200 miles wi
$ 4 billion borrowing, assuming some simplification in ,the
design and some delay in the purchase of some equipmen
because of the slightly smaller system.
The last sensi tivi ty analysis we performedwas a one percent tax, slightly higher fares in a 20-
year period. We found that the market would support
financing of $5 billion and a 244-mile system.
A few other quick observations: The patronage,
estimates were not key to our feasibility. Doubling the
growth rate of the muni bond market or on the shares
available to the SCRTD, Ttlould solve the 1990 and bey.ond
financial limit for this 16-year full construction plan.
The one-half percent sales tax for operating deficit is
sufficient to meet the long-term operations deficit given
the ~odes t fare increases. The limitation on total bonds
outstanding by the SCRTD of 15 percent of the assessed
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property value in the country will not impose a restraint
on the program if the assessed value grows at least by
four percen t, which is substantially less than the past
rate of six percent. In all the feasible financial
plans there is sufficient projected sales tax revenues
to service the debt with a minimum of one and a halfpercen t coverage. The one-half percent construction sales
tax may be discontinued when the bonds are paid off , which is
less than their period of ,assumed maturity of 30 years.
ll make two additional co~,ents and I'
put some quick slides on the board if you 'd like.The calculations do not include the feeder
bus sys'tem " financing costs, or subsidies involved.
economic analysis of benefits versus costs has not been
made, comparing alternative transit systems. The bond
market may open up more in the near futUre to sellers of
SCRTD bonds as New York City and New York State agencies
discontinue borrowing and if federal legislation -is
passed providing subsidy for tax exempt muni issues.
Lastly, our analysis assumes no federal or
state financing except for
--
financing of part of the
starter line.Now, we can either move to Mr. DeLeuw or
I can put some slides on.
May I recommend at this pointMR. de la CRUZ:
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that if you do wish to have some slides, perhaps Mr. Green
could proceed.
However, I feel for the presentation to be
complete, Mr. Manny Diamond of DeLeuw, Cather has to describe
to you the capital operating costs and construction
feasibility of the system so you may fully understand.
MR. COOK: Go ahead , Mr. de 1a Cruz~HR. DIA."10ND: Thank you.
Mr. President , Hembers of the Board.
Our main charge, as we saw it at DeLeuw, Cather
was to corne up with an evaluation of the capi tal andthe operating cos ts. However, in order to properly address
this issue, we had to make two ancillary evaluations which
I would like to briefly review with you.
The first concerns the engineering feasibility
of the proposed plan. I would like to recall that the
proposed plan encompasses 186 miles of a1i:gnment along
freeways; 17 miles of alignment along railroad right-of-way
or river embankment; and 19 miles of alignment along
arteri a1 s tree ts . The balance of the alignment is in
fixed guideway feeder systems.
It' s obvious that the preponderate alignment is
along free~vays and, therefore, the key que stion concerningengineering feasibility arises with feasibility of designing
and building the guideway along the freeway. We have made a
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very detailed evaluation of the particular alignment and
generally concur with the proposal identification of the
align ment as well as with the independent analysis carried
out previously by Ca1-Trans.
I would like to show you a slide of what our
findings are concerning that align,ment.
The proposed alignment is shown in red. The
only blue lines at four specific locations indicate our
suggestions and Gal-Trans I suggestions as to where the
alignment might be changed from at grade to aeriaL or"-
vice versa.
With respect to the freeways
--
and I' d like
to concentrate on that for the next few minutes
--
our
findings have to be discussed in terms of two specific
aspects. Let me deal first with the major emplacement of
the guideway. The proposal recommends that the guideway be
placed essentially along median or shoulder locations.find that it I s physically feasible to locate the guideways
wi thin the freeway right-of-way. However, we find that
there are numerous engineering problems that have to be
solved during the design of this facility which could not
be addressed at this stage in evaluation; but I call to
your attention most of the freeways that are contemplated
for use operate at full capacity. Most of the freeways
iden tified have narrow medians, narrow shoulders , landscape
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shoulders, and in many cases land use, dense land use allthe way up to the limit of the freeway.
It r S of particular importance to what follows
to note that the proposed alignment as schematic as it is
suggests that major enterchanges of the guideway system
of the Sunset Coast Line occur generally in the same area
where the freeway interchanges occur. Some of these
in terchanges are extremely complex from the point of view
of engineering, as you are all familiar with. I would
like to ci te the interchange of the Harbor Freeway withthe contemplated Wilshire Line; Santa Monica and San Diego
Freeway; the Ventura with the San Diego and the Golden Statewi th the Santa Monica Free,vay.
Complex guideway interchanges are generally
located in the same area. We also find the proposed
system contemplates service at high speeds of 85 miles
an hour. The freeway is not designed to accomodate such
speeds in terms of horizontal curvatures. It will therefore
be necessary at places to depart ever so slightly from the
alinement of the freeway in order to maintain the high
speeds. We also find because of many locations where the
construction space is tight, it might be necessary to
depart slightly from the proposed alignment.
Let me deal briefly with the matter of the
in terchanges. The interchanges as contemplated for the
proposed system are particularly important because of their
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profound impact on the capital cost requirements. I would
like to show you on the next slide where these i:nterchanges
are generally located.
The symbols in red indicate generally where the
The symbols in blueinterchanges between lines occur.
There are no particularindicate the feeder line.interchanges at the junction of the feeder lines wi
These are simply transit points forthe line system.
There are 50 interchanges in the basicpassengers.It' s not possible tosystem
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19 in the feeder system.
design the interchanges as suggested in the proposal at
In all cases it' s necessary to separate thegrade.
in terchanges. The suggested coincidence of the guideway
nterchanges with the free\vay interchanges would cause
great complex and expensive structures to be erected at
We believe that engineering analysis , carefulboth places.design and trade off at the subsequent stage could identify
different options for the locations 0 f these i,nterchanges.
Should that happen, we wish to call your a tten tion to ,the
fact that some land taking in the vicinity of the Lnterchangcs
would take place.
The proposal alludes to freeway widening.
have concluded G~at with the exception of those freeways
which as yet are unbui1t, such as the Century Freeway,
widening of the freeway lanes, widening of the freeway
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right-of~way, is not advisable except in special conditions
such as might occur along the San Gabriel River line because
of the relatively low use of the 605 Freeway.
Thes e findings coincide with those of Cal-Trans.
We have them summarized -- the complexi ty of construction
and the problems that might be encountered and I wish to
show that in the next slide.Where we have color coded and , if I may read
the blue symbols. Blue lines indicate a relatively
simple cons truction proces Moderate comp 1exi ty
indicated in orange. Difficult in purple. In green wou1 d
be the very difficult construction area.Translate , please, very difficult; I,' to mean
14 "expensive.
The question then arises what impact will
develop as a res u1 t of the construction 0 f the guidewayalone the freeway?
We find that in most of the places that we
have surveyed and coincident with the findings of Cal-Trans,
the construction is feasible assuming some impact to the
motorist during the construction phase. We bel ieve' -thatthe construction is feasible without the necessity of
widening the freeways. It will require the taking of
one lane or at times two lanes. However, let me stress that
when I say the T,vord " taking, II I do not mean the decrease of
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the number of available lanes to traffic. I s imply mean
a relocation and a narrowing of the lane of traffic
such as you might notice is experienced during regular
construction or maintenance of the freeways.
This reduction in width and slight relocation
in order to accornodate the construction space will probably
cause reduction 0 f speed in those areas.
We would anticipate a speed limitation to
about 30 miles per hour for the automobile. traf fie.It I S our feeling that a typical construction
cont~act might cover a span of approximately five miles
along the freeway and might take two to three years to
accomplish. We believe that in order to accomplish the
fas t schedule proposed, construction schedule proposed,
by the Sunset Coast Line proposal, it would be necessary to
operate simultaneously at several places wi thin the same
In order not to produce excessive impediment tofree~..lay .
travel, it will be necessary in the course of construction
to carefully stage the location of these sites. The map
that you see on the screen identifies the very few places
where it is poss ib1e to take lanes permanently simply
because of the current condition of the freeway. It also
suggests widening of the freeway, in accordance with Cal-
Trans in those places where that might make sense and
it shows in green the principal area of construction where
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the method of construction I described would be used.
We find no particular problems or factors to
describe to you in connection with construction along the
railroad or flood control embankments. The proposal
calls for construction along surface streets in primarily
two areas. One, in the vicinity of , the InteDiatitmaL.-Airport,and the other one along the Wilshire-L~re~ alig~m~nt,
wish to only state in connection with at grade, the construc-
tion along the arterials, the usual problems with environ-
mental control, noise and visual aspect, will have to be
reso1 ved.
Let me proceed to the second subject of our
preliminary investigation prior to addressing the matter of
cost.That has to do with the operations feasibility
of the system , or to put it in different words: can theproposed Sunset Coast Line function as a regional transit
system. And our finding in that respect is that the
operations are feasible. We could not use patronage numbers
in our calculation. Accurate patronage estimates were not
available and could not be generated in the given amount of
time. However,- we did analyze the proposed network by
drawing on previous data available from the District staff
and by drawing some inferences from similar type networks
proposed or operating elsewhere.
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Our conclusions concerning the operability of
the system are as follows:
Operatively the system is feasible. We believe
that the suggestion of carrying our urban and local service
simultaneously in the same package is probably not necessary.
In order to truly display the potential of the interurban
service, it would be necessary to double track at stations
that have off line stations; otherwise, the interurban
system would operate at approximately the same speed as
the local service. The proposal did not assume off line
stations and we did not make that suggestion, take' that'
in to account. in our evaluation. We find that requirements
for four tracks double tracking are extremely limited and
only ,occur in two locations. We did make some as sumptions
as to how a service could be routed; and I'd like to show
you that in the next slide.Different colors represent different routes.
This type of an arrangement is by no means final. A much
more detailed analysis is required, but it does suggest
that with a limited number of routes it is possible
essentially, to service most points of the networks in
connection with most other points wi th a rather limited
number of passenger transfers.
Our conclus ions, numerical, which are of
significance to the estimation of our operations costs
are as follows:
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We estimate that a system 0 f this kind would
operate approximately somewhere between 90 million and
100 million vehicle miles per year. This number is
impo rtan t because it translates directly in to the total
yearly operating cost. ve also determined , on the
basis of a' very limited analysis, that something less thanthe number of vehicles that have been proposed , the 1, 000
vehicles proposed in the document, are required. However,
we feel that the type of operation and vision had here
when subject to more detailed analysis, will result in
a higher nu~~er of vehicles and therefore propose that
the current estimate be baseq on something of the order
of 1 500 vehicles. Now, I would like to addres s the
capital costs as we have evaluated these.Our findings are as follows:
The capital costs as iden tified in the documentare low. Let me describe the reason for this statement.
We have evaluated, first, the uni t cost and
have " fourid that, in general, those uni t costs are within
the range of current practice, although there are some
discrepancies and one in particular being of significance.
We have found that in some cases the unit costs have been
overestimated providing a cushion. This might be the
case at stations and in the cost of the utility relocations.
However, we have found that a very important cost element,
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namely that required to adapt the construction to the
freeway right-of-way, has been underestimated.
estimate costs for location on the freeway range anywhere
from 1. 8 million up to 4. 1 million dollars per' mile,depending on the complexi ty of the geometry, the number of
overpasses and other natural or man-made features along
the freeway.
The numbers I have cited compare with a range
of 5. 4 to maybe 5. 7 million dollars per mile suggested by
Cal-Trans. On the basis of these numbers, we have then
estimated a cost of each of the lines, the 10 lines proposed
in the document , as well as on the basis of detailed
segment-by-segment investigation We have found that in
general the cost estimating carried out by the County
tended to underestimate the course of the complex enter-
changes; and we have made the necess ary adju5 tmen ts.a result of this reevaluation of the total capital cost,
we find that in 1976 dollars, the cost might increase up
to 30 percent over the cited costs on page 99 of thedocument. We find that in addition to this document, that
the proposal calls for a contingency allowance of 15
This has been justified as being partly set offpercent.
by a certain degree of contingency wi thin the capital
costs, the unit capital costs. It' s our considered opinion
that the inc1us ion of contingency factors at this point in
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the conceptualization of the system must account for
uncertain ties in the design and ~~e subsequent des ign ~
not for uncertain ties in the capital costs, and that a more
reasonable more prudent contingency rate would be 25
percen t rather than 15 percent.
We also find that this stated allowance for
start-up costs were somewhat low and it was increased~
and we found that the stated allowance for faci1i ties,for maintenance facilities, WdS somewhat low and increased
that.Under vehicles let me spend one minute. The
proposal recommends certain new vehicles such as the
state-of-art car or the advance concept train as prettytypical. We believe that simpler and better established
vehicles would be available and should be considered.
Our investigation of the pricing of these vehicles with
various manufacturers carried out by our staff and by the
staff of the District, in mahY other instances, suggested
that there has been an extraordinary escalation of equipment
costs taking place in the last two to three years. Costs
have risen extremely rapidly and we have quotations ranging
anywhere from $500, 000 to $750, 000 a unit. We believe
if an order is to be placed for a large quantity,
24 , vehicles, something in the order of 000 vehicles or so,
that the cost could probably be kept down in the range of
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$60~ , 000 a unit, and we have used that number in our
analysis. When we have added all of these factors we find
it' s reasonable to anticipate an increase of th~ capitalcost requirements for the system stated in 1976 dollars of
approximately 40 to 43 percent beyond what is shown in
the do cumen t .
The numbers that I have just ci ted include the
following allowances: The starter line is only included
to a very 1imi ted extent. That extent necess ary to make
up any deficiencies in funding the local share. This
inclusion was made as a result of direction from the
Rapid Transit Committee. Allowance for the Wilshire-
LaBrea line of approximately two hundred some-odd million
dollars was kept intact. The allowance for the CBD
distributive system of 50 miles was left as stated in the
document -~ $50 mll1ion. We wish to suggest' that the
allowance for the right-of-way is probably low and thatfurther analysis of the requirements for moving of the
freeway at the interchanges might cause that to change
some\vhat.
Our next finding is wi th respect to operatingcosts. In general, the findings are that the operating
costs as stated in the proposal seem to be reasonable.
We have attempted to cross-check our estimates in several
different ways using data from other properties that operate
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extremely efficient systems through the use of mathematical
models and induction. We find that in general the costs
as cited seem to be appropriate at the order of about $1.
per vehicle mile.I should state that our findings are that at
least two of the elements of operating costs would be soft.
In other words, we are not too certain of their validity.
One of those would relate to the money necessary to maintain
these vehicles. This sys tern con temp1a tes extremely high
usage of the vehicles and there is very little comparable
data from existing operations to support our findings. The
proposal does not seem to include a full comp~,ment of
securi ty personnel and other persons attending the stations.
We believe tha~ further analysis might show that additional
personnel is required, possibly causing these numbers to
change slightly; but we feel fairly confident that the
cost will be in the range of $1. 50 in vehicle miles in 1976
dollars.A word about feeders. The proposal identifies
15 separate fixed guideway feeders. Out of the 15 identified
five have been called out as being light trail and the
other 10 as automated group rapid transit systems. ~'l e
not have full information, nor does the County staff , as
to where these 15 alignments might be located with high
specifici ty. It was not possible for us to therefore
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evaluate precisely the accuracy of the capital costs and
of the operating costs.
We wish to make two suggestions. The capital
costing is predicated on an average figure of approximately
$ 5 million per mile of feeder system all inclusive. It'our experience and considered judgI:".ent that for light
rail transit operating at low speed , costs could be kept
as low as $ 8 million and could range as high as $12 million
some o~d, depending on the number of structures required
to traverse the intersection. For GRT systems , it is
our considered opinion after having evaluated thoroughly
the market for these sys terns in this country and madeprojections for the future, -l.'1at a range of $15 to $20 , millioper mile- might be appropriate.
We also wish to suggest a desirability of
one , or at least three , different types of systems to
be distributed regionally rather than 15, for reasons of
economy and operations and efficiency of operations.
I would like to address the matter of
construction , if you will.
We have approached the issue of construction
staging from several points of view. From the point of
view of the basic requirements to accomplish a project
of this complexity and from the point of view of limitations
in the construction industry, the capacity of the
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construction industry in Southern Cali fornia, which we I ve
estimated to be somewheres in the range of $500 to $750
million a year, in terms of the con tract letting ability of
an agency to pursue this project; and all of those findings
suggested to us that a program of approximately 16 years is
recommended for the development of this system. You will
notice this program does include approximately one year for
mobilization, something in the order of five years for
preliminary design and something in the order of eight
years for final design. If a program like this were to
be imp1 emen ted, we would anticipate startup of service on
the firs t completed s egmen t somewhere in the eighth and
ninth year after beginning of the project and startup with
full operation probably wi thin the 17th or 18th year after
the beginning of operations.
Let me suggest the schedule you see before you
on the screen is an cptomistic schedule. It does not take
into account extraordinary litigations or delays due to
problems in reaching jurisdiction agreements, strikes, and
things of that sort. At the peak construction period, such
a program would employ approximately $1 billion in contracts
and approximately 40 miles of guideway would be in construc-
tion simultaneously. The rate of expenditure yearly for
a program of this magnitude would range between $ 500 and
$700 million per year.
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Lastly, let me say -- as a result of the
briefing which we gave the Southern California Rapid Transit
District Cowmittee two days ago
--
we were asked to
investigate certain possibilities of reducing the capital
costs wi thout degrading in any significant manner the
scope of the system, of the mode or operation ~ystem.
have determined t.~at through certain design simplification
and by way of certain deferrals 0 f expenditures , it is
possib 1e to reduce the capital costs stated in 1976 dollars
somewheres between 10 and 15 percent. This can be
accomplished by deferring the construction of certain of
the feeders, by simplifying construction of certain of the
interchanges , and deferring some of the separate investments
or requesting cost sharing.
I would like to show you in the next and last
slide that a system, simplified system , in this fashion
could operate and provide adequate service. The principal
idea that is suggested in here is that there would be
Ii tt1e interconnection between lines. There would be a
great deal of pas senger transfers and only limited train
trans fers.
We have shown in red the junctions limitedn umbe r junctions, necessary provide acces s theairporter system and provide a minlmum of conducti vi ty
the sys tern. 'YVe have also suggested blue the minlmum
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of service transfers which would allow the trains to be
removed to service facilities. This is encouraging and
tends to strengthen our belief that it I s possible under
this type of a schematic to accomplish a temporary reduction
of capital expenditure of somewhere between 10 and 15
percent.
The blue lines you see are the assumed remaining
feeders in the system.
Thank you very much.
MR. de 1a CRUZ: I would like to now turn back
to Hr. Don Green of Stanford Research Institute who will
now summarize the basic cost data that he has received from
Mr. Diamond and combine it with his financing information
. .
~nd perhaps describe to you the financing feasibility of
the propos ale
MR. GREEN: m going to use the ' chart.think it would be easier if I stepped to the board and
pointed to the figures.The first slide basically presents the
comparison of cost factors I mentioned earlier. This isa comparison of the construction cost factors we used.
The construction cost escalation was 10 percent in the
proposal and we were using 8. 5 as I suggested earlier.The operating cost in the proposal was using
10 percent for 1982. We I re using 7 percent all along.
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The borrowing rate for the Southern California
Rapid Transit District was 8 percent in the proposal and
re assuming 7. 5 percent long-term.
The interest earned in the funds in reserve
accoun ts earned 7. 5 percent. You '11 find we have les s
interest earned because we have less in the reserve
accoun t because we borrow les s and use our taxes first.
The sales tax rate is one percent in both of the cases
we examined except for an alternative I' ll get to later.
The sales tax receipts we assume will grow
at 6. 4 percent based on a 3. 2 percent increase in
productivity in the area plus a 3. 2 percent~, living increase..
In fare revenues the proposal assumes no growth.
.. .
We assumed a 3. 2 percent growth in fare revenues. The
construction cost of 1976 dollars in the proposal was
7 billion and DeLeuw estimated roughly 6. 7 ' billion for
the same system.
The operating cost in ' 76 dollars was estimatedby DeLeuw at 135 million at the full scale of operation,
which is not too different from the one here, but
The period for completion in the propos a1 was
from 12 to 15 years. DeLeuw estimated 16 years with a
slightly slower startup for more time to get started.
The completion year was expected to be 1991 or
1992 in both cases.
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Now, I mentioned before, the question of
financial feasibility and the first set of columns here
is what I call the "Annual Issuance of Bonds " and the
mathematical model presented in the proposal
--
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assumed $500 million of bonds to be issued in every year
for 15 years which adds up to seven billion five hundred
million. This is simply showing key years rather than
every year.
The assumed ceiling I say is available to
in fact borrow against on the total muni bond market is
roughly $ 300 million at this time, growing to $ 4 2 0 millionby 1980, and roughly an 8 percent growth continuing to
$600 million in 1985, and $900 million in 1990. For that
,. .
reason they won t be able to borrow the amount anticipated
in the ' earlier years.
Looking at the cumulative amount outstanding,
the proposed accumulative amount outstanding in the proposal
was $500 million in the first year, reaching $1. 7, $3.
and $5. 4 billion. The reason that' s 1es s than $ 50 0 milliona year cumulative is because they re paying off part of
the amount they borrowed during this period so that'the cumulative outstanding over the period of time The
amount of money we believe SCRTD can borrow consecutivelyand cumulatively on the market is shown in the last column.
$1.2 billion by 1977, which is essentially -- it' s essential
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1/2 percen t of the total market expected at that time,
growing again at about 8 percent a year: $1. 5, $ 2. 2, and
$3. 2 billion.
You 'll notice we said that it' s the annual
1irni tation that creates a limit to what the SCRTD can
borrow in these first couple of years. It' s not the
cumulative limit, but as soon as you get into these
years the assumed feeling here of cumulative amount
much less than the amount they assumed would be outstanding.
So we felt that was not a feasible financial plan.
This chart is essentially the same thing.
However, it' s based on the revised costs given to us by
DeLeuw 1 which shows this kind of a required bond financing.
.. .
During these early years we I re using our tax revenues and
we I re not having to go out and borrow money.
In the later years as the construction increases
you have to go out and borrow money because you don t have
enough from your sales tax revenue. This shows as much as
$1~1 billion being borrowed in 1985. Where we assume that'
virtually imposs ib1e; on the other hand, it' s clear youmay be able to stagger in a couple of years or forward
a couple of years. For example, you could borrow that
in two years and be within your $600 million limit.1985, ho'dever, the cumulative amount outstanding, we felt,
could not exceed $ 2. 2 billion; so by 1985 we felt you could
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borrow the $2 billion. However, by 1990 or somewhere in
between, you re going to have to borrow a total of
$9. 5 billion under this system and yet the amowlt the
market would bear, we re saying, is $3. 2 billion; so for
the same reason we felt this system became unfeasible,
somewheres from 1985 to 1990.
Going on down you re ending up borrowing
something like $11 billion which is far more than you
Similarly, the annual amounts are in excess ofcan get.the avai1abi1i ty.
The next slide says, "Well, if G.~e otherbvo plans won t work, what wil1" -- in terms of the
market limitation in getting the system built. This,as you 'll notice, was the ceiling before that was our
constraint. In ' each case we don t exceed the -- the
proposed outstanding amount ,does not exceed
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we ~ay the market will take. In fact, we re within it
slightly in most cases. By the same token , the amount
re issuing each year is not in excess of what we say
the market can bear. Now this would take 25 years to
finance and complete, but that is a feasible schedule in
the sense the market will take it, assuming our assumptions
are correct.
Now lastly: We were asked to review some
alternatives and this is just one. I think it will make
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the case, though.
This asked a question: For a 20-year program,
how much could we finance?" And here we assume slightly
higher fares, as I said, 50 cents in 1984 instead 0 f 30
cents; and here we again stayed within our ceiling, always
bumping up to it, but never exceeding it and we found
this amount would issue $ 5. 1 billion outstanding, cumu1ative1
a little less; and you would be able to finance for thatamoun t of money in those years the one percent ales tax,roughly 240 miles, which is not too much short of 280
you re after.I ought to point out one other thing: The
general rule, we learned , and it took us some time to
learn this , the rule is kind of simple. It says, "Use
your tax revenues when you have it; borrow only when you
have to , and as much as you can, but not more than you can.Maybe that' s not stated too clearly, but it'
a fairly simple rule.Now, you might -- I have two slides now.
One is on financing operations of that 20-year program,
and another financing the construction of the 20-yearprogram. This looks at a series of individual years:
1980, ' 85, 90, and ' 95.
Looking at operations; fare revenue will be
coming in at this rate -- those are millions of dollars
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at the escalated rate , 3. 2 percent , starting with cents in 1984 at the million miles -- million passengers
per day, full-system operation.
The operating cost which we I ve escalated at
7 percent, using DeLeuw 1 Cather s cost, will be rising at
this rate again as the system grows. You re only getting
to 244 miles in 20 years. You re not at full-system
operation yet. You have a -- in this year -- it turned 9ut
-- a surplus of fare revenues over operating costs.
didn' t quite get into detail, but in any event, by these
last two periods , 1990 to 1 95, you actually have a
deficit in operating cost in excess of fare revenues by
$15 million and $ 70 million.Now , how do you meet that deficit? That is
met by the one-half percent sales tax receipts which are
available to meet an operating deficit. Specifically,that one-half percent will yield $171 million in 1980.
It keeps growing at 3. 2 percent as the economy grows.
It' s yielding $230 million, $300 million, $500 millionat five-year intervals. You 'll see, then, that this allows
what I call a surplus or deficit in the operating account
and in each case we ve got a relatively large surplus from
this tax revenue over the amount we could use up to one-half
percen t to finance our operating deficit.This is because of the very large population
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and how much you get from one-half percent sales tax.
have made one modest adjustment: These numbers were at
the beginning base of 30 cents in 1984. ve es ca1a ted
to 50 cents in 1984 to get slightly more revenue. If you
add that rate in 1985 you get $16 million more in revenue
compared to the $ 37 million you had there. It' s about afour percent increase and that continues on. At that rate
you have an adj usted surplus you can contribute and
use to financing your construction of $171 million in
1982, $150 million in 1985, $368 million in 1990 -- and
if we re still constructing in ' 95 you have $493 million.
Now, how do we finance the program? How do
we finance the construction? Here again, we have 1980,
85, ' 90 and ' 95.
Expendi tures, construction and equipment:
this is the feasible schedule that meets my financial
1imi tations. It' s not as fast as we could build this
system, but it' s as fast as we could build it and get it
to the market and get the money we need to pay for it in
addi tion to our tax revenue. This means we have to spend
at this rate; $200 million the first year. It' s 1980 --two years after the beginning. $1 million reaching close
to a peak in 1985, and slowing down in ' 90 and ' 95. The
reason for the slowdown is because we can t go to the
market and get enough money to continue spending at that
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1 rate. The debt service begins to accumulate as we start
2 borrowing. We borrowed somewhat between ' 80 and ' 85.
3 We have to start paying off interest and amortization at
4 this rate; so the total amount of capital needed for
5 construction and debt service rises from $ 200 million to6 $1 billion, close to a billion, and still a billion in
7 1985 when we re finishing up our 240-mile system. How do
8 we finance that? We have the one-half sales tax reserved
This top line here (indicating).for construction financing.10 This is simply the amount available for one-half percent
that we can t use for operating funds.
The next line is the bottom line of my
13 previous chart -- the operating surplus. It' s the other14 half percent plus the amount of deficit I have to finance
15 for my operations. This is the one with the slightly higher
16 fare. The sum of these tyro numbers gives' us: the total17 amount available to finance construction. It rises from
18 $ 300 million, $ 4 80 million ~ $ 880 million a year. It so
19 happens on the income side in the first year, 1980, I have
20 a small amount of interest because my tax revenues are
21 coming in and I haven t yet started construction; so I
22 get interest on my funds tha't adds up to four hundred two.
23 Otherwise, the amount available is four hundred , four eighty,24 six eighty, eight hundred seventy million.
This bottom line is the financing required, ,the
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amount of money we have to borrow. It' s the differencebetween the amount of money I spend and the amount I
have for sales tax revenue, basically and you ll see
in the year 1980 I borrow nothing. By 1985 I' m starting
I drop itborrowing at the rate of $600 million a year.
down to $230 million in 1990. If I keep borrQwing at that
high rate my market analysis tells me it' s too much.
Now, the years in betweenback up to $350 million in 1995.
it allows you to have somewhat of a stable construction
schedule, but not quite at the high peak you might have
had wi th no financial limitation.The last chart compares what I call financially
Thefeasible a1 ternati ves which we were requested to do.tax rate in the first series is cne percent. It rises to
one a..11.d a quarter, and one and a half percent for the
sales tax in the three series. At the one percent rate,
if I. want to do 281 miles, it will take me 25 years andI'll have to borrow about $9 to $10 billion. At one percentif I want to get done in 20 years, I can do probably around
244 miles, assuming this design specification change Mr.
Diamond spoke of and borrow about $5 million. This may
be $ 4 to $ 5 billion, depending on whether I can get into
some sort of strip bonds. It' s around $4 to $5 billion.
I f I want to build in 16 years and still bewit~in my financially feasible schedule, I can build around
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200 miles and borrow around $ 4 billion. I f I have oneand a quarter percent sales tax and I want to finish in
16 years, I can do about 260 miles borrowing about $ 3.
billion.Lastly, if I have a one and a half percent
ales tax I can get the 280 miles in 16 years That'
the whole system done and I borrow approximately $5
billion. That' s at the one and a half percent sales
tax which brings in more revenue which allows me to finance
at that shorter period of time.
That' s the extent of our presentation at this
VIe re still working out a few kinks, but I think,poin t .
basically it presents the summary of our findings on the
financial side.HR. COOK: Thank you.
Thank you, Mr. President.MR. de la CRUZ:
If I may state , that these are
--
this is only a preliminary
progress report 1 oral progress report of the consul tants
as you did mention. I would like to mention a written
report which this information will be available to you next
Also, part of that written report that will beweek.
available to you will be a discussion of the bus system
as such a discussion of the present bus system and itsprojected status and financial needs; a1 though as we originall~
stated at the outset 0 f this analys is several weeks ago, we
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were not going to handle a description of the bus program
and its financial needs within this evaluation. We feel
you ought to have it before you next week.
That concludes our presentation.
m sorry. Mr. George Adams of Mobility
Systems & Equipment Company is here and is av~i1able to
speak to you on the construction of the system on' the
freeway, avai1abi1i ty of equipment, and energy requirements.
Hr. Adams.
!vIR. ADAMS: Ladies and gentlemen:
The scope of our work' was related to those
four areas discussed by Mr. de 1a Cruz. We worked closely
together wi th the Gruen Company and we coincide in many of
the aspects related to the freeway availability and
gui dew ay cons truc ti on. Actually, there s a great deal of
problems related to the application of the freeways, butin general, it' s a matter of designing and cost.
We analyzed the application of the guideway
at the center line as~we11 as the embankment and we coincide
with the explanation of DeLewN, Cather that the center line, the median 1 is the more appropriate application of the
guideway installation. The interline rail junctions
appear to be difficult and costly and, once again, the
use of rail junctions should be weighed against the
possibility of straight-through lines with a dual level
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station for transfer which was also presented previously.
In reference to the const~uction equipment:
This is no pro~lem. They could, it is believed , that the
construction equipment either exists or can be obtained
wi thin the time schedule.
The reference of cost of cast-in-olace versus
precast has been studied carefully and even though the
uni t cost of precast might be higher than cast- in-place,the resulting total cost might be less. Higher quality
control is obtained by the use of precast construction.
Precast is a safer construction operation ilild offers lessfreeway disruption during construction. From these
standpoints the precast might be more advantageous to use.
In terms of hardware availability, the dominant
factor is the cars. A survey of the major suppliers indicates
that in the time span alloted and for the quantities stated
there is sufficient capacity, capability and incentive for
producing the vehicles. Rough estimates of cost indicate
that this is somewhat higher than the cost stated in the
SCL proposal.
The important issue is lead time. Approximately
two to three years should be allocated to des ign, produce
and test the cars.
A survey of U. s. suppliers of wayside. controlsand communication equipment and guideway hardware indicates
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availability wi thin the project schedule.
In terms of energy the issue here is not
with the power demands of the system. Al though the
calculations performed show a higher power demand than
that stated in the SCL proposal, the amount of power
used by the SCL systems is approximately two percent of
the existing capability within the Los Angeles County area
served by the Department of Water and Power and Southern
California Edison Company.
The issue is concerned wi th the general
increasing pmver demand by consumers and the uncertain
prospect of the power company ' s abi1i ty to increasetheir capaci ty to keep in step with the increasing
demand. While there appears to be an apparent power
excess at present, this excess is' illusionary in thatpower companies have 15-20 percent downtime on their
equipment on a continual basis. When this is subtracted
most of the excess disappears. The problem is that all of
the future capacity is yet to be built.
In talks wi th the u til i ty people, they feelthat the SCL line will entail additional generating
capaci ty and express some doubt about their ability to
meet this demand. There appeared to be some doubt as to
whether they will be able to meet the normal demands.
The SCL proposal considers the application of
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waste material power generating plant as an additional
power source for the sys tern. This concept is feasible
and has been tried favorably in this co un try and overseas.
The question is: will the Los Angeles Department of Water
and Power in conjunction with Los Angeles County establish
this type of facility to serve the SCL system
The yards and shops: The issue of the yards
and shops for the SCL is underestimated in the proposal.
Planning and phasing maintenance facilities is a difficult
task when the aspect of the final product and the interim
steps is considered.
Based on the data in the SCL program it
appears that at least 16 miles of track is required just
for storage of the vehicles. Even wi th high utilization
factors 1 this would require about 40 acres just forstorage.
The SCL system operation represen ts a high
efficiency transit system requiring an effective service
and maintenance program tha't includes crews for service
main tenance and emergencies.
A service and maintenance plan must be
established early in the development of the system. This
plan should incorporate emergency service , approximately
10 to 12 off-line service facilities and two or more
repair-overall facilities and yards as well as an
extensive parts inventory.
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As a summary of our findings we say this:
Freeway application for transit guideway use is
atis factory and feasib 1e.
Precast structure are favored due to the extent
of construction. Even though the uni t cost of precast might
be higher than cast-in-place, the resulting total cost mightbe less. Higher quali ty control is obtained by the use of
precast construction. In addition , precast is a safer
construction operation and offers less freeway disruption
during cons truction. From these standpoints the precast
is more advantageous than cast- in-p1ace approach.
Leading U. S. suppliers of rapid transit
cars and equipment indicate that in the time span proposed
and for the needed quantities there is sufficient capacity,
capability and incentive for production.
A possibility exists that power requirements
for ?ystems operation may be effected by the diminishing
excess of generating capacity due to increasing demand and
the limitations affecting the capability to expand
generating capaci ty in the Los Angeles area.The need for an extensive maintenance and
service program and facilities for an efficient transit
sys tern results in high capi tal and operating cos ts .
Thank you.
MR. de 1a CRUZ: That concludes our tec:hnical
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presenta' tion. The consultants are ~vai1ab1e to answer any
questions you may have; and furthermore , Mr. Don Hudginson
is also available here to answer any questions the Board may
have.
MR. COOK: Thank you.
Any questions?
MR. TAKE Yes.
In Mr. Adams ' discussion of the power
requirements of the system he suggested the possible need
for construction of generating plants which, of course,
would mean further bonding issues.According to Mr. Green s idea -- I don
see him here -- Is Mr. Green here?
MR. COOK: Yes. s outside.
MR. TAKEI: I guess I better hold my question
until he is back.
Mr. Green, I'd like to have you discuss a
ques,tion that came to my mind listening to Mr. Adams
report on the po'der requirements of the system, 't-lhich may
necess i tate new cons truction of generating plants which
would , of course, mean further bond issues. How that
would impact on your suggested bond issue schedule.
Let me just give one explanationMR. ADAHS:
prior to Mr. Green. The subj ect here is not related to
the fact that it requires additional power to supply the SCL
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sys tern.
It' s the fact the environmental policieshave effected the additional construction of power
plants in the area. This is what really is having the
most impact on the fact that available power might be
reduced.
HR. TAKE I think the question is still
pertinent in terms of the bonding impact.
HR. GREEN: The question I would have to ask
is : How much money is involved in this problem? If it'a hundred million dollars it wouldn t affect very much.
What I' m talking -- because my numbers were in the billion
dollar range. If he is talking about a billion dollar
problem -- that could add either another five years to
our financing schedule or cut down on the amount of
miles we get done in any given period.depends on what kind of financial problem
he is talking about.
HR. TAKEI: Is it reasonable to assume
that the bonding schedule you suggest would not make a
serious impact on bond offerings by other agencies --
construction of fire stations, say, or other generating
plants on the market in general?
MR. GREEN: I would say that in general the
market is big enough. If we I re going in for o~e percent
each year we probably won I t have a significa mpact on the
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market. On the other hand , if the Los Ange 1es County
generally are considered a common political unit, it
may be true. Anytime one organization enters the market,
it could have a modest impact on interest rates for it
and other bodies, but I would say we re talking about --
perhaps at most -- a half a percent difference in interest
rate rather than no availabi1i ty of funds or one or two
percen t difference in costs. I have spoken to the Federal
Reserve Board of Governors on the point.HR. TAKE Could you cite for us the
other bases which you touched on the ideas you suggest?
HR. GREEN: We talked to commercialYes.
banks investment banks 1 underwriters, municipal finance
officers association, federal board of governors. VIe
believe -- vle were told by all the under\vriter people in
the busines~ today, that it' s very difficult, to raise$ 500 million now or two or three years in a row and
certain ly for many years in a row. On the other hand 1 they
were uncertain as to how much one could raise in a 10- to
IS-year period. Imen I presented to those people involved
in long-range planning, the question of taking a percent
share of the market, they all agreed it was a reasonable
method to use and most concurred , generally, in the
aggregations I used.
HR. COOK: Mr. Diamond , I would like to ask
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you to touch upon a problem you discussed with us yesterday.
That is the number of cars, speaking 0 f light rail cars,
that would be required. I believe yesterday you said
somewhere between 1000 and 1500 cars. You did not get
in to the cost or the source or the vendor for those
vehicles. Could you touch briefly on that subject, please.
MR. DIANOND: We surveyed most or all of the
There are very few of themUni ted States manufacturers.
in terms of what the projection for the cost of the
contemplated vehicles might be. We did have to make an
assumption the vehicle ';vould be more typical of what is
curren tly available or might be in the near term rather
than a very experimental vehicle. We received quotations
from those manufacturers ranging from $500, 000 to $750, 000
a Q~it in 1975 costs. These are the same units that
only two or three years ago cost in the range of $ 300, 000
to $400 000 -- a tremendous escalation.
In all cases, the manufacturers alluded to
a small order of the order of 100, maybe 120 vehicles.
We therefore, assumed that if a large order were to
be placed with deliveries spaced over a considerable
period of time , that the cost would come down and our
cost estimating assumed $600,000 a unit. This is in
con trast with something in the order of $350, 000 for
outstanding orders currently being delivered.
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HR. COOK: I believe you also stated seating
capaci ty on each one was approximately 115 seats; is that
correct?
HR. DI AHOND : The proposal, the Sunset Coast
Line Proposal, suggests that the vehicle to be used in
the service would have approximately 110 seats and could
be filled during peak hours with something in the order of
200 passengers. The current vehicles are
--
we areciting in this cost estimate are,some\vhat smaller in size.I believe that the available capacity of the fleet 0
vehicles as suggested in the proposal in the order of
five million seats is one in excess of what would be
required in operations so that when a more careful
analys is of the operational implication were to be made
we believe that ' vehicles of seating capacity commensurate
of the, most up-to""date vehicle technology in this country
would be suitable; and it could have 70 or so seats per
car.
MR. COOK: In your final report, would you
state any opinion as to the cost effectiveness of this
particul ar type sys tern?MR. DIAIvlOND: To the cost effect?
MR. COOK: Cost effect per passenger mile
cost.MR. DIAMOND: Yes, sir.
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question?
MR. COOK: That vI ill be in your final report?
MR. DIAMOND: Yes, sir.MR. COOK: Mr. \'iilkinson
, '
did you have a
HR. WILKI~1S0N: Yes.
I have a couple of other questions. A $500
million issue at 7 percent -- is that really the maximum,
pretty much the maximum capacity of the market?
HR. GREEN: The maximum capacity of the market
goes from around $ 300 million the first year of SCRTD
iss ues . re talking about arollild $ 30 billion now which
is the size of the cumulative outstanding and -- I' m sorry
-- new issues in 1975 were $ 30 billion. One percent of
that is $300 million; and if the market keeps growing at
about 7 percent ' a year you will grow f~om what I call one
percent of the market , $300 million at 7 percent a year.
MR. ~"lILKINSON: Jus t the market for Ca1 ifornia,or the United States?
MR. GREEN: For the United States. tate and
local tax exempt money bonds.
MR. WILKINSON: You re assuming that you are
only going to get one percen Basically, what is the
history of the Los A~geles area insofar as percentage of
the market per year?
MR. GREEN: The reason I picked -- I don I t have
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the answer to that question right now. The reason I picked
one percent is because the traders told us this year that
a $300 million issue ",vas difficult to move and anyone
trying to move more was having trouble. The $1 billion
cumulative amount is , the amount the L. A. Water and Power
people have outstanding now and seems to be t~e maximum
in the area.There is a great need forMR. WILKINSON:
other people -- like Los Angeles County is going to have
to bo'rrow in order to meet its financial status because
they have not done any capital improvement. They re go ing
to have to borrow $60 million in order to meet the
general obligation in the county. We know the Board 0
Education is going to go in within the next year to five
years for close to half a billion dollars bond issues to
reduce , schools as well as community colleges. The city of
Los ,Angeles has, in revenue bonds and other things, nearly
a half a billion dollars on the market. ~'lithout DWAP' s
Do you remember-- and what was the last DWAP bond interest?
EightMR. GREEN: No, sir; I' don t know that.
percen t, perhaps.
Six twenty.MR. HUDGINSON:
MR. ~vILKINSON: And that was double-A?
MR. HUDGINSON: I think they I re an A.
sorry -- it depends on -- there I s double-A, triple-A --
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MR. WILKINSON: What would you assume this
might be? AB or BBC?
If it' s supported byMR. HUDGINSON: No.
the sales tax , it certainly should approach a revenue
In early years,bond. It just depends on the coverage.
when you had lots of coverage it should be double-A.
The guarantee has not, beenMR. WILKINSON:
there for over a period of years because any one period of
time an election could be had by the people which would
take away the sales tax.I hope that' s not true.MR. HUDGINSON:
The tax people will look atMR. WIL~GNSON:
this and the banking establishment will look at this.And they ll put in legislation.MR. HUDGINSON:
It' s there now. ' That the legislature can t reduce the
sales tax coverage during the life of the bonds.
I might mention that the peopleHR. GREEN:
we spoke to said that revenue bonds backed by the sales
tax had a doub1e-A rating -- and you re quite right --the electorate could take away the sales tax, but they
haven 't done that in the past for some reason or other and
doesn t call for a higher in teres t rate or lower.
ve never had a sales tax.MR. WILKINSON:
Have we had a sales tax in California? Anything that
matches even 10 percent of this magnitude to do a municipal
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Anything up to $100 million even?thing?Financed by the sales tax?MR. GREEN:
I don t have that information.
What you are saying, then,MR. IvILKINSON:
is that seven and a half percent will be the maximum average
over the 16 years?
MR. GREEN: That' s correct.
And that is what the financialHR. WILKINSON:
people including 0' Me1veny & Myers
I didn' t consult with them onMR. GREEN:
interest rates.
I think the question of interestMR. HUDGINSON:
rates is really not \vi thin a lawyer s competency.
That is which rating company, MR. WILKINSON:
or 'which" rating compan:ies, can you tell me, gave you seven
and a half percent?
It' s the SRI judgment based onMR. GREEN:
conversations with seven or eight unde~vriting firms.
This is an assumed lo~g-prefer not to give their names.
term rate that seemed reasonable to us.
I have a couple ofMR. WILKINSON: Okay.
other questions, but I' ll wait.
MR. COOK: Go ahead.
MR. yftlILKIN SON: There was a statement made
I believe, by Mr. Park, stating that you have a no-growth
wi thin the area. HOvl do you justify that if we re going to
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have an increase employment without no growth?
I believe I touched on this in theHR. PARK:
sense that we have 89 stations on the main line itself
and total line mileage is 222 miles.
Are you assuming the increaseMR. ~'JILKINSON:
of growth of patronage or the communi ty?
m talking about developmentHR. PARK:
around the station.Our general assumption is that whenever
stations are built, automatically a development will take
place around this station. That is not true in this country;
especially ",hen \"e have a great level of acces sibi1i ty inthis country and the general assumption we are making is
that' the growth potential is going to be more likely to
be distributed rather than focusing in a single location
al though in San Francisco it has a concentration effectdowntown San Francisco.
I agree on the growth. WhereHR. WI LKIN SON:
do you get the assumption that you re goipg to have an
increase employment?
employment?
MR. PARK:
How did you get the increase in
I was referring
--
Due to the
construction, the improvement, of the Sunset Coast Line
system
--
talking about administration, planning and
design construction.
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MR. WILKINSON: You have to take that out of
the effect -- of how this is going to effect the economy of
the commun i ty .
MR. PARK: I think it' s a difficult analys
because we re also to do a certain number of jobs in this
regi on
MR. WILKINSON: When that' s over with?
HR. PARK: If the system is not -- doesn
go, that one cent sales tax would be generated into the
economy -- also creating its own jobs.
~'1R. WILKINSON: Okay.
lvIR. PARK: It' s a very difficult process toassess net employment opportuni ty to be created by thisconstruction program.
HR. WILKINSON: The last question: You did
not discuss what the cos't of increase to the water and
power department on building new facilities -- what that
cost would be nor did you ask Edison what that cost would
be to provide that full facility?
MR. ADAMS: No. We asked the amount of
funds required to do so because we were trying to establishwas there plan expansion in terms , of available power.
a result of that, we came to this determination.
You came to the determinationr-lR. WILKINSON:
of what?
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That there was going to be aHR. ADAMS:
possible power -- there would be some difficulties to
produce sufficient power in the years to come to the
exten t that the di fference between the capacity availableand the required service began to be a crush.
MR. WILKINSON: I have to ' ,Iua1i ty myself as
a po1i tician -- 22 years in city government -- and I would
have to think your statement -- as an engineer -- we should
not build this at all and should not spend another dime
because we do not have the power guarantees to build or
to have an expanded system at all. That was the answer
you just gave.
also have
longer.
If you were to say that , you wouldMR. ADAMS:
to say the whole country could not expand any
MR. v'lILKINSON: Your ' anS1;ver to me -- I happen
to be the finance chairman of the City Council of Los
Angeles. I would have to make -- if I was making a " judgment
, that we should cancel everything we I re doing. m justgoing to have to give you my judgment , but I know that isn 'what we may do. Somewhere we have to get that answer which
1;ve do not have.
Mr. Chairman, I' m sorry, but I think you I ve
been very badly given information insofar as that area.
MR. COOK: Do we have any other ques tions?
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MR. TAKE Mr. Park, in your discussion of
environmental impact you stated that there would be low
environmen tal impact because the transi t guideways would
be going through already established transit corridors.
What about the environmental impact of the induced
developmen t around there as a result of that new transporta-
tion system going through?
HR. PARK: I think the induced development I
referred to in terms of development around the station,
I think the development is not likely to take place simply
because the transit guideway is located throughout the
regionMR. TAKEI: If you can be more specific in
terms of scale.MR. PARK: Local or regional scale?
HR. TAKEI: ~he alignment indicated around
downtown Hollywood skirts around the outer edge of the
developed Holl~Nood area; so I would assume there would
be induced development where the transit station would
be and an immediate impact from the development there;
but there is also another impact, a negative one, of the
acti vi ty being eroded away from the exis ting center and
thus accelerating the deterioration of the d~ve10ped
down town area.
MR. PARK: I 1 m not saying I would like that
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development to take place. Secondly, viability of
existing activity centers doesn t simply depend on just
the transi t access ibili ty. There are many other factors
that affect the vi tali ty of a particular location.Again, downtown Hollywood.MR. TAKEI:
We already see a certain direction going in an established
developed area. It' s on the decline. It seems to me
trans it could be used to revi tali ze those areas, butby use 0 existing guidelines. Was transit corridor
suggested in the proposal? There is a new area, a new
cen ter, that would be developed by --
d like to address this from aMR. PARK:
different standpoint. I think the best way to serve our
area is to bring: in this station where people are locatedand weigh employment. But if you bring in a system on
the area guideway in those are~s the impact is great and
community opposition is also great and the cost of
doing it is also high; so it' s a choice of bringing in
more expensive construction into these areas to minimize
construction -- for instance -- the trans it coverage;
and if you look at the early part of our improvement
program they primarily used:,also freeways- and railroadrights-of-way -- in San Francisco, for example; and,
obviously, they were concerned about displacement of the
people, but at the same time they re talking about lower
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cost after vacating.
We are coming right back to going along the
existing right-of-way simply because of the environmental
impact.
Unfortunately, there is no clearance. I f you
want to serve effectively not to tamper with and reinforce
the economic vitality, you must bring the line closer and
more expensively built; and if you do, the coverage will
be condensed. On the other hand, if your objective is
to cover equities throughout the county obviously, something
has to give in. I don t have a clearance to that issue.
MR. TAKE Would you say your statement that
there is a low environmental impact is a generalized one
and when it' s applied, especially to certain areas, that'not applicable?
MR. PARK: The station location alignment
should be carefully assessed to make sure that it is not
bringing unnecessary economy to affect the existing
activi ty centers and also discourage growths which are
not desired by the community to those that are desired.
I think the fact that you re putting the transit line
there and ' letting go is not the right public policy. I
think that locating the station is just as important as
doing something about the public land use control, to make
sure undesired funds of the transit improvement should be
minimized.
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MR. TAKE So what you re telling us here is
that we need to develop a strike-the-land-use program
together with this?MR. PARK: That' s correct. I think that is
in the public domain of the jurisdiction involved and
I think that letting it happen has been the history 0
this coun try. I think from now on anticipating the
impact, that you could do something about minimizing
those impacts which might be generated out of the system
developing. So it' s a double sword kind of approach. You
can t just provide accessibility. Great accessibility
means more attention to the people I s questions. Do you just
let the market decide what the development should b~ or
do you take in account and measure land use? It' 5 a great
ob1iga tion on our part.MR. TAKEI: I keep thinking in t~rms of the
specifics we have to deal with.
MR. PARK: If it' s a question of whether'd like to have a transit system improvement or not,
I think the impact on existing acti vi ty centers is less
cri tical. If you talk about that kind of alternative in
the beginning of my presentation
--
we haven r t done the
alternative analysis, we have not compared the plan with
other al ternati ves.
MR. COOK: Any further questions?
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We will be receiving the final reports from
the consultants.
The Board -- At least those of you remaining
-- heard this presentation yesterday afternoon so in the
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adjourned.
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any further questions, this meeting stands
(Whereupon, at 3: 45 p. m., the meeting was
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CERTIFICATE
STATE OF CALIFORNIAss.
COUNTY OF LOS ANGELES
GONZALEZ, CSR No. 3003, a NotaryI, JUlh1\JITA
Public in and for the County of Los Angeles, State of
California, certify:That the foregoing proceedings regarding the
Special Meeting of the Board of Directors of the Southern
California Rapid Transit District were taken before me
a t the time and p1 ace herein set forth, at which time the
aforesaid proceedings were recorded stenographically by me
and thereafter transcribed; and
That the foregoing transcript, as type~, is a
true record of the said proceedings.
IN WITNESS WHEREOF, I have subscribed my name
and affixed my seal this lOth day of March , 1976.
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ani ta Gon z ale z ~CS R No. 3003
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