SPUR REPORTSEPTEMBER 2020

More for Less

How to plan and deliver the Bay Area’s major transit

projects in less time, for less money and with better

public value

SPUR.ORG/MOREFORLESS

This report was written by Laura Tolkoff, with research support from Jonathon Kass, Nicole Soultanov, Jelena Djruovic and Joshua Karlin-Resnick and with steady guidance from staff from numerous public agencies and transit agencies, consultants and civic groups. SPUR’s Executive Board and Transformative Transit Project Delivery Task Force discussed and debated the recommendations in this white paper. All recommendations contained in this report are SPUR’s.

SPUR is particularly grateful to the members of a task force that was convened to help shape this report: Jim Allison, Jason Baker, Ignacio Barandiaran, Dale Bonner, Andreas Breamer, Diane Cowin, Eric Eidlin, John Fisher, John Funghi, Darlene Gee, Ian Griffiths, Ariane Hogan, Jill Jaffe, Doug Johnson, Dan Leavitt, Boris Lipkin, Joanne Parker, Shannon Peloquin, Therese Trivedi, Dennis Turchon, Kate White, Simon Whitehorn and Luis Zurinaga.

Acknowledgements

Thank you to the many people who also provided input into this project, including: Bernice Alaniz, Jim Banaszak, Winsome Bowen, Andreas Breiter, Ed Chan, Tilly Chang, Stuart Cohen, John Cook, Sue Dyer, Stephen Engblom, Karen Trapenberg Frick, Tom Gellibrand, Sadie Graham, Tony Hansen, David Ho, Robert Jones, Nick Josefowitz, Ed Harrington, Leyla Hedayat, Gary Kennerly, Paula Kirlin, Adina Levin, Alon Levy, Michael Lindsay, Gwen Litvak, John Martin, Tony Meggs, Val Menotti, Joanne Parker, Colin Peppard, Howard Permut, Sebastian Petty, John Porcari, Jean-Claude Prager, Andrew Quinn, Dennis Ratcliffe, John Ristow, Liz Scanlon, Joshua Schank, Brian Stanke, Ben Tripousis, Kyle Vinson, Duncan Watry, Simon Whitehorn, Colin Wright, Joy Woo and Jessica Zenk.

Edited by Karen Steen Designed by Shawn Hazen Copyedited by Valerie Sinzdak

Thank you to the funders of the SPUR Regional Strategy:

Chan Zuckerberg Initiative Clarence E. Heller Charitable Foundation Curtis Infrastructure Initiative Dignity Health Facebook Genentech George Miller Hellman Foundation John S. and James L. Knight Foundation Marin Community Foundation Sage Foundation Silicon Valley Community Foundation Stanford UniversityAdditional funding provided by AECOM, Fund for the Environment and Urban Life, Microsoft, the Seed Fund, Stripe, Uber Technologies and Wells Fargo.

This report is one in a series of publications that lay the groundwork for the SPUR Regional Strategy.

This report was adopted by the SPUR Executive Board on February 4, 2020.

Contents

Executive Summary 4

Introduction 8ProjectDeliveryProblemsAreCostingtheBayArea

Big Idea 1 15Improveregionaltransportationplanning,projectselectionandprojectoversight.

Big Idea 2 28Createaneworganizationtodelivertheregion’smostsignificantandhigh-riskprojects.

Big Idea 3 36Streamlineenvironmentallawsforprojectsthatdeliversignificantenvironmentalbenefits.

Appendix A 44

ProjectCosts

Appendix 50

ProjectTimelines

TheSanFranciscoBayArea’stransitnetworkisatacriticaljuncture.Inthelastdecade,theregionexperienced

unprecedentedeconomicandpopulationgrowth.Yetithasfailedtomaintainitsagingtransitsystemsoradd

newinfrastructuretosupportthisgrowth.Gettingaroundhasbecomeslow,inconvenientandpainful,andmost

oftheregionremainsinaccessiblebytransit.Today,inthemidstofapandemicthathasdrasticallyreduced

ridershipandrevenue,manytransitagenciesarealsoexperiencingaseverefiscalcrisis,threateningtostopsome

fromrunningaltogetherbeforeyear’send.

Amajorreasonwhywedonothavethetransitnetworkweneedisbecauseprojectscosttoomuchand

taketoolong.Andwheneachprojectissoexpensive,it’snowonderthatthere’slittlemoneylefttodeliverthe

frequencyandqualityofserviceweneed.Thereistoomuchatstakeifwefailtobringdownthetimeandcosts

ofdeliveringprojects.Witheachnegativeheadlineaboutprojectdelaysorcostoverruns,peoplewilllosefaithin

governmenttoaddressourmajorchallengesandmaybelessinclinedtoinvestininfrastructureforthecommon

good.Thetransitnetworkwillplummetintoastateofdecaythatwillmakeitimpossibletobringridersback,let

aloneattractnewriders.Wewillfailtomeetourclimategoalsinthelastdecadethatwehavebeforetimeruns

out.

SPURbelievesthattheregion’ssuccessdependsongettingaheadofthesechallengesandbuildingthe

infrastructureweneed.YettheBayAreahasapoortrackrecordofdeliveringmajortransitprojectsquicklyand

cost-effectively.Ourprojectsregularlytakedecadesfromstarttofinish,andourprojectcostsrankamongthe

highestintheworld.

MOREFORLESS 4

Executive Summary

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MORE FOR LESS 5

Thispapercharacterizessomeofthechiefreasonswhymajortransportationprojectstaketoolongandcost

toomuchintheBayArea.Therecommendationsinitanswerthreekeyquestions:

1. HowcanregionalagenciesandtransitoperatorsensurethattheBayAreaisplanningforandselectingthe

bestmajortransitprojectstobuild?

2. Howcanregionalagenciesandtransitoperatorsdeliverthemostsignificant,high-costandhigh-riskprojects

morequicklyandcost-effectively?

3. HowcanCaliforniaremovelegislativeandregulatorybarrierstoensuresuccessfulprojectdelivery?

Thispaperfocusesonmajortransitprojects,characterizedascomplex,large-scaleprojectsthatare

significanttotheregion’stransitnetworkandthattransformthewaypeoplegetaroundbyprovidingsignificant

newaccess,frequencyandconnectivityandreducinggreenhousegasemissions.Wefocusontheseprojects

becausetheyhavehighinitialcostsandareathighriskofcostoverrunsanddelay.Withapproximately$100

billionworthofmajorprojectsinthepipelineintheBayArea,thesavingsfromtheserecommendationscould

numberinthetensofbillionsofdollars.

Someofthesemajortransitprojectscostover$1billionandcouldbeclassifiedas“megaprojects”according

Ph

oto

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Major transit projects such as the remaking

of San Jose’s Diridon Station often take too

long and cost too much. This report makes 10

recommendations for how the Bay Area can

get better at delivering significant projects.

MORE FOR LESS 6

toacademicliterature.1TheseincludeintegratedstationprojectssuchastherebuildingofDiridonStationorthe

newSalesforceTransitCenter,theelectrificationofdieselrailroads,andrailextensionssuchastheSiliconValley

BARTextensionoradditionaltransbaycrossings,amongothers.However,theBayAreahasmanyprojectsthat

donotmeetthe$1billioncostthresholdbutcanbeequallytransformativeandcansufferfromsimilarrisksand

challenges.Theseincludetheregion’smanystalledbusrapidtransitprojects.

ToseetheBayArea’snextgenerationofmajortransitinfrastructureprojectsbuiltmorequicklyandcost-

effectively,weneedtochangethegovernanceofprojectdelivery.SPURproposesthreebigideasandmakes10

recommendationsfordeliveringtransitprojectsintheBayAreainwaysthatsavetimeandmoney.Thoughmost

beneficialasapackage,eachoftheseideascanbepursuedindependently.

Big Idea 1: Improve regional transportation planning, project selection and project oversight.

Improveregionaltransportationplanningandprojectoversightsothatonlytheprojectsthatofferthebestvalue

totheBayAreaareadvanced.TheBayAreahasahistoryofselectingprojectsbasedonpoliticalcloutrather

thanthrougharigorousselectionprocessbasedonaregionalvisionorobjectivecost-benefitmetrics.Further,

therearecurrentlyfewincentivestocontrolprojectcosts.Projectdeliveryproblemsstartwellbeforeaproject

everbreaksground.

1. ExpandtheMetropolitanTransportationCommission’sauthoritytoactastheregion’stransitnetwork

planner.

2. Developalong-termstrategicplanforaseamlessnetworkofregionaltransitandmanagedhighwaylanes

toguidecapitalinvestments.

3. Establisha“stagegate”processwithphasesandperiodicdecisionpointstodetermineaproject’s

readinesstoadvancetothenextstageintheprojectlifecycle.

4. Rigorouslyevaluatethebusinesscaseanddeliverabilityoptionsforaproject,especiallybeforemaking

financialandpoliticalcommitmentstoit.

5. Establishintegratedprojectmanagementteamsthroughouttheprojectlifecycle.

Big Idea 2: Create a new organization to deliver the region’s most significant and high-risk projects.

AchiefreasonwhytheBayAreahasstruggledwithprojectdeliveryisbecausewebuildsofewprojects.Every

projectfallsvictimto“firsttimer”mistakes.Procurementandconstructionmanagementarespecializedskills

thatneedtobenurturedthroughexperience,especiallybecauseeachprojectisunique.Wefurtherexplore

theconceptdescribedinRecommendation6inourcompanionpaper,Infrastructure Bay Area: A proposal for

successful delivery of transformative transit projects (spur.org/IBA).

1 BentFlyvbjerg,“WhatYouShouldKnowAboutMegaprojectsandWhy:AnOverview,”Project Management Journal,v.45(2),April-May2014,pp.6–19.https://journals.sagepub.

com/doi/10.1002/pmj.21409

6. EstablishInfrastructureBayArea,aprojectdeliveryentityresponsibleforthesuccessfuldeliveryofthe

region’smostsignificantmegaprojects.

7. GiveInfrastructureBayAreatheabilitytousenontraditionalprojectdeliveryapproaches.

8. AllowInfrastructureBayAreatoselectabidderonthebasisofthebestvalueratherthancostalone.

Big Idea 3: Streamline environmental laws for projects that deliver significant environmental benefits.

California’sforemostenvironmentalprotectionlaw,theCaliforniaEnvironmentalQualityAct(CEQA),isoften

usedinappropriatelytodelayorstopprojectsthatwouldhavesignificantbenefittotheenvironment.Adapting

CEQAforthemostenvironmentallybeneficialprojectscouldreduceprojectcostsandtimelines,acceleratingthe

transitiontoamoresustainable,affordableandhealthytransportationsystem.

9. Establishastatewidecertificationprocessformajortransitprojectsover$1billionthatwouldreduce

uncertaintyandunduedelayandcostinexchangeforadoptingbestpracticesinprojectdelivery.

10. Givestatutoryexemptionstobusrapidtransit,bicycleenhancementprojectsandpedestrian

improvements.

Reformingprojectdeliveryisaproblemthatcannotwait.Ifwecontinueonaswealwayshave,thefew

projectsthattheregionmanagestodeliverwillcosttoomuch,taketoolongandfailtomaketheregion

accessibleandsustainable.Thisisafuturewesimplycannotacceptorafford.

MOREFORLESS 7

MORE FOR LESS 8

Introduction

Project Delivery Problems Are Costing the Bay Area

In2019,theBayArea’stransportationnetworkseemedasifitwereabouttobreak.Thepeaktravel“hour”

seemedtostretchintotheentireday.Trainsandbuseswereuncomfortablycrowded.Manypeoplewereleaving

theirhomesbeforetheirchildrenwokeupjusttoavoidtraffic.Inthemiddleoftheday,transitwasslowand

largelynonexistent.Theregion’stransitnetworksorelyneededmorecapacity,morereliabilityandmoreaccess

—anditwasfinallyreadyingitselftomakethoseinvestments.

Today,wefaceanotherkindofbreakingpoint.Theworldhasbeenthrustintoapandemicthathastakenthe

livesofhundredsofthousandsofpeopleandleftmillionsunemployedinjustafewmonthsintheUnitedStates

alone.InthefaceofCOVID-19,theBayAreahasgonequiet.Thereisnopeakhour.Crowdmanagementisabout

keepingpeople6feetapartandisamatteroflifeanddeath,notcomfortorconvenience.Largeemployers

whohadamassedsizeablerealestateportfoliosandoperatedtheirownbusnetworkstofosterin-person

collaborationarenowlettingpeopleworkathomeindefinitely.

Withthesechanges,transitagenciesarefacinganexistentialcrisis.Aspeopleshelterinplaceandpractice

socialdistancing,transitsystemsareexperiencingplummetingridershipandrevenue.Transitfares,parkingfees,

bridgetollsandothertransportationfundsaredryingup.

SPURbelievesthattheBayArea’sfutureisanurbanone.Citieshavesurvivedpandemicsbefore—and

becomebetterforit.2AndthoughCOVID-19hasmadeallaspectsofsocietyseemunanchored,onething

remainsunchanged:Citiesneedtransittosurvive.Eventoday,transitisalifelineconnectingessentialworkersto

hospitals,pharmacies,testingcentersandjobsatallpointsalongthefoodsupplychain.Andafterweemerge

fromthepandemic,wewillneedasignificantpercentageofpeopletoshifttotransitformoreoftheirtrips:A

futurewithmoredrivingisafuturefilledwithmorecongestion,morepollutionandgreaterthreatsfromclimate

change.

Transitcanthriveifitfunctionswellforeveryone,particularlyforpeopleofcolor,peoplewithlowincomes,

peoplewithdisabilities,olderadultsandchildren.Butourtransitnetworkalreadyservestoofewpeople.Service

isdesignedprimarilyforcommuterswithnine-to-fivejobs.Despitecrowdingonanumberoftrainsandbuses,

lessthan3%ofalltripsaretakenbytransit,andaveragepercapitaboardingrateshavefallenbelowtheirlevels

in1990.3

Tomaketransitbetterforeveryone,weneedtomakeitmorereliable,integratedandfrequent,andin

somecases,weneedtoexpandittomakemoreoftheBayAreaaccessibletomorepeople.Doingsorequires

investmentsinpoliciesthatmakethetransitsystemfunctionbetterforall,4aswellasnewcapitalprojectsthat

addreliability,speed,capacityandaccess.

2 BenjaminGrantandSarahKarlinsky,“PhysicallyDistantButStillTogether:HowCitiesintheBayAreaandBeyondWillSurvivetheCoronavirus,”SPUR,March18,2020,https://

www.spur.org/news/2020-03-18/physically-distant-still-together-how-cities-bay-area-and-beyond-will-survive

3 MetropolitanTransportationCommission(MTC),“HistoricalTrendforDailyTransitRidership,”VitalSigns,https://www.vitalsigns.mtc.ca.gov/transit-ridership#chart-0

4 ArielleFleisher,“TransitFareIntegrationWinsTransformativeProjectsCompetition,”SPUR,February18,2020,https://www.spur.org/news/2020-02-18/transit-fare-integration-

wins-transformative-projects-competition

MOREFORLESS 9

How Poor Project Delivery Perpetuates Inequity

PeoplewithlowincomesmakeupoverhalfoftransitridersintheBayArea,5whichismorethantwicetheirshare

oftheregionalpopulation,andpeopleofcoloraccountfor62%oftransittrips.6Thatmeansthatthehighcost

anddecades-longprocesstodelivertransitimprovementshasthegreatestimpactonlow-incomecommunities

andcommunitiesofcolor.Solvingtheproblemofprojectdeliverywillgreatlybenefitthesegroups.

Long timelines leave historically marginalized communities without basic access, sometimes for decades.

Forexample,ithastaken17yearstodelivertheEastBayBusRapidTransitproject,leavingpeoplewholivein

neighborhoodslikeEastOaklandanddowntownOaklandwithoutahigh-quality,efficientwaytogetwherethey

needtogo.Bythetimeit’scompleted,theprojectmaynotevenbenefitthesamepeoplewhovotedforit.It

understandablydiminishespublictrustandaccountabilitywhengovernmentcan’tkeepitspromises,particularly

forcommunitiesthathaverepeatedlysufferedfrombeingoverlookedoroverpromised.

Often, project delays are caused by individuals whose narrow interests play an outsized role in project

decisions. California’sforemostenvironmentallaw,theCaliforniaEnvironmentalQualityAct(CEQA),allows

anyonetosuetoeffectivelyblockaproject,evenonnon-environmentalgroundssuchasimpactsonparking,

trafficoraesthetics.Forexample,anindividualsuedtheSanFranciscobicycleplanoverparkinglossesand

trafficimpacts,holdingup34milesofbikelanesforfouryears.TheEastBayBusRapidTransitprojectwas

likewisecompromisedwhenasinglebusinessownerinBerkeleythreatenedtofilealawsuitunderCEQAover

parkinglosses.Thisforcedtheprojectsponsortosignificantlyscaletheprojectbacktorunonlybetween

OaklandandSanLeandro,reducingaccessibilityforlow-incomecommunities.7Similarchallengesunfoldedwith

theGearyBusRapidTransitprojectinSanFrancisco.Thatthelawsuitscanbefiledanonymouslyfurtherprotects

therightsofanindividualovertherightsofthepublic.

Wealthier, whiter and more car-oriented communities have a lot of power over transit funding and capital

investments. Fordecades,thefederalgovernmenthasbeendivestingfromtransportation;today,federalfunding

makesuponly11%ofalltransportationdollarsintheBayArea.8 Totheircredit,votersinmostBayAreacounties

haverepeatedlytaxedthemselvestotryandmakeupthedifference.Yetinordertowinattheballot,thetax

measuresdedicateasignificantamountoflocallygeneratedfundstocar-orientedprojectsorrailexpansions,

whichtendtobenefitwealthierandwhiterpopulationsthancapitalprojectsthatimprovecapacityonexisting

systems.9Similardynamicsplayoutattheregionallevel.In2001,theMetropolitanTransportationCommission

(MTC)adoptedResolution3434,apoliticalcompromisethatpromisedMTC’ssupportfor$10.5billion(in2001

dollars)forrailexpansionprojectsnominatedbyBayAreapoliticalleaderscompetingforfundsintheirdistricts.

5 MTC,PlanBayArea2040EquityAnalysisReport,July2017,p.5-5.http://2040.planbayarea.org/sites/default/files/2017-07/Equity_Report_PBA%202040%20_7-2017.pdf

6 MTC,RegionalMeans-BasedTransitFarePricingStudyProjectOverviewReport,DraftFinal,March2017,p.4,https://mtc.ca.gov/our-work/plans-projects/other-plans/means-

based-fare-discount-program

7 JudySilber,“OaklandCityCouncilGivesFinalApprovaltoEastBayBRT,”StreetsblogSF,July8,2012,https://sf.streetsblog.org/2012/07/18/oakland-city-council-gives-final-

approval-to-east-bay-brt/

8 MTC,PlanBayArea2040,Chapter4,“Investments,”p.64,https://mtc.ca.gov/sites/default/files/4-Investments.pdf

9 “FasterBayArea”in2019/2020wasaregionalballotmeasurefortransportationandthefirstballotmeasureproposedexclusivelyforpublictransit.

MORE FOR LESS 10

Projects Regularly Take Too Long and Cost Too Much

TheBayAreacannotaffordtowaitanotherdecadewithoutinvestmentinthetransitnetwork.Yetcapital

projectsweretooexpensiveevenbeforethecurrentcrisis.10Outofmorethan90capitalprojectssubmitted

toMTCin2019forPlanBayArea2050,fewerthanadozenwereconsideredtobecost-effective.Andforthe

foreseeablefuture,transitagenciesandcitieswillbefacedwithshrunkenbudgets.Wewillneedtodomorewith

less.

TheBayAreahasapoortrackrecordindeliveringmajortransportationprojectsontime,onbudget

andwithoutmajordefect.Andwearenotalone.Acrosstheglobe,deliveringmegaprojectsisnotoriously

challenging,11,12andscheduleandcostoverrunsarecommon.13Inasurveyofmegaprojectsaroundtheworld,

researcherBentFlyvbjergfoundthatrailprojectsencounteredanaveragecostoverrunofmorethan44%.14With

over$100billionworthofmegaprojectsonthehorizon,costoverrunscouldrunintothetensofbillions.We

simplycan’taffordthat.

IntheBayArea,projectsconsistentlycostmoreandtakelongerthaninotherurbanizedregions.15Several

systemicfactorsthatdriveuptimeandcostareuniquetotheBayAreaandCalifornia:extremeinstitutional

fragmentationthatmakesitdifficulttoputforwardaregionalvisionandgainalignmentbetweendecision-

makers,anenvironmentalreviewprocessthatisoftenmisusedandaddsyearstoaproject’sschedule,anda

lackofflexibilityandexperienceincapitalprojectprocurement,amongothers.Thispapercharacterizesthese

problemsandisacalltoactiontofixthem.

10 LauraTolkoffandArielleFleisher,“ToAchieveSeamlessTransit,WeMustChangeWhatandHowWeBuild,”SPUR,December18,2019,https://www.spur.org/news/2019-12-18/

achieve-seamless-transit-we-must-change-what-and-how-we-build

11 Seenote1.

12 KarenTrapenbergFrick,RemakingtheSanFrancisco–OaklandBayBridge:ACaseofShadowboxingwithNature,Routledge,2016.

13 Inasurveyof258transportationinfrastructureprojectsin20countries(bothtransitandauto),90%experiencedcostescalation.BentFlyvbjerg,MetteK.SkamrisHolmand

SorenL.Buhl,“WhatCausesCostOverruninTransportInfrastructureProjects?”TransportReviews,v.24(1),2004,pp.3–18.

14 Seenote1.

15 AndyBosselman,“BayAreaSubwayandRailCosts:WhyAreTheyAmongtheHighestintheWorld?,”Curbed,June18,2018,https://sf.curbed.com/2018/6/18/17464616/bay-

area-subway-train-rail-costs-price-bart-muni

1982

2000

2010

2012

2016

2020

2030

Funding measure passed

Expected Federal Transit Administration full funding

Silicon Valley BART Extension inBART Short Range Transportation Plan

SVBX Phase I

SVBX Phase II

Phase I and II Environmental Impact Report (1)

Ground-breaking

Original opening date

Actual opening date

Original opening date

New opening date

Phase II EIR (2)

Phase II EIR (3)

Funding measure passed

Major investment study

Split project into 2 phases

ddun

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Project selection, planning & funding

Environmental review

Construction

BERRYESA

SANTA CLARA

FIGURE 1

The Silicon Valley BART Extension Has Taken Nearly Half a CenturyThe Silicon Valley BART Extension was

first identified in 1982, but the project

will not be completed until 2029, nearly

half a century later.

MORE FOR LESS 11

FIGURE 3

The Central Subway Has Experienced Cost Increases of 40% and Will Open Three Years LateThe Central Subway, which will bring Muni

service to some of San Francisco’s most job-rich

districts, was first identified as a goal in the

1980s. Initial project planning and environmental

work for the project only began in 2005, after

the passage of a local ballot

16 SanFranciscoMunicipalTransportationAuthority(SFMTA),“CentralSubwayProjectHistory,”www.sfmta.com/central-subway-project-history

17 RachelSwan,“SanFrancisco’sCentralSubwayHitsHugeDelay—Won’tOpenUntil2021,”San Francisco Chronicle,September18,2019,https://www.sfchronicle.com/bayarea/

article/San-Francisco-s-Central-Subway-hits-huge-delay-14432776.php

measure that helped to fund it.16 This project is

the second phase (of three) of the Third Street

Light Rail Project. The first phase, the T-Third

Line, opened in 2007. The Central Subway was

initially estimated to cost $647 million (in 2001)

and to take eight years to build, yet the cost

and schedule ballooned during the construction

phase. The project is now anticipated to cost

$1.6 billion and to open in 2021, three years late

and 11 years after it started construction.17

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FIGURE 2

Van Ness Bus Rapid Transit Has Taken Nearly 26 YearsA conceptual study in 1995 identified four

new high-priority corridors for frequent,

fast transit, including Van Ness–Mission.

The study initially looked at light rail and

bus rapid transit options. Van Ness Bus

Rapid Transit ran into several delays,

including issues with Caltrans over lane

width during the planning phase as well

as challenges with the construction

contractor and unmarked utilities that

impeded construction.

1995

2001

2003

2006

2007

2008

2011

2013

2014

2015

2016

2017

2019

2021

First o�cial study as part of Market-Octavia Plan

Environmental Impact Report Begnis

EIRComplete

Federal Transit Administration Record of Decision

Projecthando�SFCTS > SFMTA

Initial federal funding approval

SFCTAfeasilbility study

Fuding passed—Prop K

Four corridors concept study

bbAA

l

Project selection, planning & funding

Environmental review

Construction

n

ASSoc

m RR

Groundbreaking

Original opening date

Second opening date

Actual opening date

1993

1996

1998

1999

2000

2001

2003

2004

2005

2007

2008

2010

2012

2016

2019

2021

Central subway prelim engineering studies (through 2009) Federal Transit

Administration full funding agreementInitial federal

funding approval

EIR complete

EIR completed

Federal Transit Administration record of decision

Environmental Impact Report start

SEIR begins

Federal Transit Administration record of decision

Central subway included in Regional Transportation Plan

Third Street Transit Project Identified in Bayshore Transit StudyBBd

TT

T

Groundbreaking Original opening date

Second opening date

Newopening date

Original opening date

Groundbreaking Actual opening date

ttedre

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THIRD STREET

LRT (PHASE 1)

THIRD STREET

LRT (PHASE 1)

CENTRAL

SUBWAY

(PHASE 2)

CENTRAL

SUBWAY

(PHASE 2)

MORE FOR LESS 12

FIGURE 4

International Comparison of Construction Costs for Urban Rail ProjectsAmerican urban rail projects regularly cost more on a

per-mile basis than comparable projects in Europe.18

This figure compares the costs per mile (in US dollars) of

a sample of urban rail projects with a significant amount

of underground tunneling. The Silicon Valley BART

extension costs almost four times as much per mile as

Ourprojectcostsstarthigh.Manyprojectshavecometocostsomuchthatitiseasytocastdoubt

onwhetherweshouldbebuildingthematall.Outofmorethan90capitalprojectssubmittedtoMTCfor

considerationinPlanBayArea2050in2019,fewerthanadozenhadbenefitsthatexceededcosts.19Despitehigh

initialcosts,largeprojectsfaceanumberofchallengesthatmakethemparticularlyvulnerabletocostoverruns,

asdetailedonpage16.

Projectdeliveryreformisnotjustamoneyissue—itisanissueofequityandtheenvironment.Whencapital

projectsgooverbudget,transitagencieslookforwaystobridgetheshortfall.Firsttheylooktofindcostsavings

intheproject’sdesign(“valueengineering”),thentheytakefromtheiroperatingbudgets,acrossbothrailand

localtransitservices.Thiscandisproportionatelyimpactpeoplewithlowincomes,whomakeupoverhalfofthe

BayArea’stransitriders.20OneprominentexampleisBART’sOaklandAirportConnector.Ascostsescalated,

BARTcutpromisedstationsinEastOaklandandsoughttoreallocatefundingforbusesthatwouldconnectto

theproject.21Low-incomehouseholdsaredoublyvulnerabletoprojectdeliveryproblems—firstbecauseofthe

delayinimprovedtransit,andsecondbecauseescalatingcostscanthreatentodiminishthequalityofexisting

service.

Projectdeliveryisalsoadeterminingfactorintheregion’sabilitytoreducegreenhousegasemissionsand

avoidaglobalclimatecatastrophe.TheBayAreaisexpectedtofailtomeetits2035climatetargets,22inpart

18 AlonLevy,“WhyIt’sSoExpensivetoBuildUrbanRailintheU.S.,”CityLab,January16,2018,https://www.citylab.com/transportation/2018/01/why-its-so-expensive-to-build-

urban-rail-in-the-us/551408/

19 MTC,“ProjectPerformanceAssessment,”February2020,https://mtc.ca.gov/our-work/plans-projects/horizon/project-performance-assessment

20 Seenote6.

21 JoelRamosandClarrissaCabansagan,Crossing Together: Equity Considerations for a Second Transbay Crossing,TransForm,2017,https://www.transformca.org/transform-

report/crossing-together

22 UnderSB375,PlanBayArea,theregion’ssustainablecommunitiesstrategy,mustmeetorexceedagreenhousegasreductiontargetof19%by2035.Boldstrategiesthatresult

inlessdrivingwillberequiredtomeetthistarget.See:“PlanBayArea2050DraftBlueprint:SettingtheStage,”presentedbyDaveVautintotheMTCandAssociationofBay

AreaGovernments(ABAG)ExecutiveBoardonJanuary31,2020.https://mtc.legistar.com/MeetingDetail.aspx?ID=752053&GUID=B43014E3-E6FA-4EAA-B3FE-0260C3EB778D&

Options=info|&Search=

the Barcelona L9/L10 metro, even though they use the

same tunneling technology and the L9/L10 extension

is the longest and deepest in Europe and traverses

highly developed neighborhoods. New York City’s East

Side Access is included because New York is regularly

cited as having the highest urban rail construction costs

in the world.

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becauseithasnotdeliveredefficientandreliabletransitthatmakestransitmoreattractivethandriving.At

present,thetransportationsectorisresponsiblefor40%ofallofthegreenhousegasemissionsinCalifornia,

largelybecauseofouroverrelianceonpassengervehicles.23 ThepercentageofpeopleintheBayAreawhodrive

alonetoworkhashoveredatabout66%onaverage(andcloserto80%insomecounties)sincethe1980s.24All

realisticpathstowardachievingdramaticreductionsingreenhousegasemissionsinvolvetransitcapacityand

transitconnectionsthatsimplydonotexisttoday.Thereisnotimetowait.

23 LegislativeAnalyst’sOffice,Assessing California’s Climate Policies — Transportation,December21,2018,https://lao.ca.gov/Publications/Report/3912#Key_Takeaways_From_

Review_of_Major_Policies

24 MTC,“HistoricalCommuteModeChoice,”Vital Signs,updatedMay2018,http://www.vitalsigns.mtc.ca.gov/commute-mode-choice

MOREFORLESS 14

The Project Life Cycle

Thispaperaddresseschallengesthroughoutaproject’slifecycle,startingwithregionalplanningandproject

selectionandcontinuingthroughprojectplanningandultimatelyprojectdelivery.Eachoftheseprototypical

projectphasesisdescribedbelow.25Thesephaseswillbereferencedthroughoutthisreport.

FIGURE 5

TRANSPORTATION PROJECT LIFE CYCLE

25 Thereissomesimplificationinthisdescription,whichtendstoreflectaprocessthatusesamoretraditionaldeliverabilityapproachsuchasdesign-build.

Regional PlanningEstablish the vision for the transit network and service performance standards for each part of the network. Standards include operational and user-focused elements and aim to achieve environmental, social and economic outcomes. Project selection is based on these regional goals and outcomes.

Project InitiationEstablish an integrated project management team; engage the public in the project vision and design; determine the project’s planning vision, objectives and strategic outcomes in relationship to the regional network plan; assess the project feasibility; and compare initial investment options.

Project DevelopmentConfirm the need for the project, continue public engagement, evaluate investment options, complete environmental review, select a preferred investment option, conduct initial design and engineering, establish a funding and financing program, secure funding and financing, complete a project-delivery-options analysis with a value-for-money analysis and risk assessment, complete final design and engineering, and secure permits and approvals from all resource and regulatory agencies.

ProcurementImplement the selected project delivery approach, prepare project for market, bid the contracts for construction and determine workforce requirements.

Project ConstructionFinalize execution strategy, build the project and ensure that the project is ready for operations/service.

OperationsBring project into service.

CloseoutMonitor, evaluate the lessons learned and measure project performance against expectations.

Project Definition and Design

Project Delivery

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Big Idea 1

Improve regional transportation planning, project selection and project oversight.

Goodprojectsstartwithgoodplanning.Therecommendationsinthissectionemphasizeastrongerrolefor

regionalplanning,projectevaluationandprojectselection.Additionally,largetransportationprojectsare

uniquelycomplexandrequireahigherlevelofoversightandprojectcontrols,particularlyintheearlyphases,to

spotwarningsignsandcorrectfutureproblems.

Challenge: The Bay Area’s fragmented transportation governance system makes it extremely difficult to align around a shared vision for the transit network and the projects that will deliver it.

Therearemorethantwodozentransitagenciesandninecountywidecongestionmanagementagenciesinthe

SanFranciscoBayArea,eachwithitsownuniquegeographies,fundingstructures,servicesandpriorities.Having

somanydifferentagencieswithahandinplanningandfundingtransitmakesithardertocreateasharedvision

fortheregion’sinfrastructureneedsandtomakerationalfundingdecisionsthataregoodfortheregionasa

whole.Exacerbatingthechallenge,eachagencywantsitsprojectstobeincludedintheregionaltransportation

plansothatitcanbeeligibleforscarceregional,federalandstatediscretionaryfunding,whichleadstoadeeply

competitiveprojectselectionprocess.Currently,theprocessfordevelopingtheregionaltransportationplanis

thateachagencynominatesprojectstoMTCforinclusioninPlanBayAreaandMTCevaluatesthemaccording

tocost-benefitmetricsandqualitativecriteria.Asaresult,theregion’slong-rangetransportationplanisa

piecemealsetofprojectscollectedfromlocalnominationsandpoliticalnegotiationsratherthanasharedvision

developedfromaregionalsetofenvironmental,socialandeconomicgoals.

Attheprojectlevel,eachagencyhasdifferentprioritiesdrivenbyitsbusinessandoperationalrequirements.

Itcanbehardtofindcommonground,letaloneasharedvision.Further,therearefewincentivesorstandard

processestoencouragemakingshareddecisionsorprioritizingregionaloutcomes.Stateandfederaltransit

fundingprogramshavegenerallynotemphasizedintegration.26

Fragmentedinstitutions,timelinesandfundingsourcesoftenstandinthewayofplanningcollaboratively

orselectinginvestmentsrationally.Adjacentorconnectingprojectsareoftenplannedindependentlyinsteadof

asoneproject—ondifferenttimelines,withdifferentbudgetsandwithoutsufficientconsiderationforphasing

ofdecisionsandconstruction.Thesedifferencestendtobe“solved”byincreasingthescopeandsizeofthe

26 CalSTA’sTransitandIntercityRailProgram(TIRCP)isarareexceptionthatemphasizesintegrationbetweensystems,particularlyintegrationwithhigh-speedrail.See:https://

dot.ca.gov/programs/rail-and-mass-transportation/transit-and-intercity-rail-capital-program

MORE FOR LESS 16

infrastructureorbysacrificingoperationalefficiency.27Forexample:

> CaltrainandtheCaliforniaHigh-SpeedRailAuthorityhaveagreedtosharetherailcorridorbetween

SanFranciscoandSanJosé,buteachhasdifferentoperatingrequirements.Consequently,initialplans

werebasedonanassumptionthathigh-speedrailwouldnotbeabletofitwithinthefootprintofthe

stationandwouldneedtooperateinaphysicallyseparateaerialstructureabovetheexistingstation.

ThisnewstructurewouldhavefurtherbisecteddowntownSanJose,whichalreadyfacesstruggleswhere

Highway87cutsthroughit.In2018,afterastudytourhostedbySPURshowednewwaysofoperating

anddesigninghigh-speedrailstations,theplansforanaerialstructurewereabandonedinfavorofanat-

groundconfiguration.

> TheCityofSanJosésoldpubliclandimmediatelyadjacenttoDiridonStationandtherailyardtoa

developer.Aportionoftheparcelhadbeenidentifiedasnecessarytocreateabetterrailalignmentthat

wouldallowfastertrainspeedsandmoretrainsperhour.Thoughthedecisiontosellthelandwillbring

long-awaitedeconomicdevelopmenttothearea,itcompromisesbothrailoperationsatoneofthe

region’smostsignificanttransithubsandthelong-termcapacityoftherailnetwork.

> BART’sAntiochlinetravelsthroughtheBerkeleyhillstunnelsandisbisectedbytheHaywardFault,an

activeearthquakefault.In2015,theBARTboardofdirectorsweighedseveraloptionsforhowitwould

upgradethetunnelsaspartofitsearthquakesafetyprogram.Oneoftheconsiderationswaswhether

ornottotakeatunneloutofservicetodotheseismicupgrades.Ofthetwofinaloptionsconsidered,

onewouldhavetakenatrackoutofserviceduringconstructionandprovidedexpressbusserviceto

passengersonHighway24.Itwouldhavecost$284millionanddeliveredbettersafetyinjustoverfour

years.Thesecondoptionwouldrequireanewtunnelbutwouldnotsignificantlydisruptserviceon

theexistingtunnels.Itwouldcost$918millionandrequirealmost10yearstobuild.28Preferringnotto

disruptservice,theboardultimatelychosethelatteroption,requiringanextra$700millionandsixyears

ofconstructiontodrillathirdtunnel.Theselectedoptionhadapooreconomicandfinancialcaseand

deviatedfromthemostimportantpolicygoalofimprovingsafetyasquicklyaspossible.

Challenge: Projects often suffer from poor cost-benefit estimates at the outset, which distorts project selection and has cascading impacts through the life of a project.

Newlynominatedtransitideasandprojectsaremostlikelytosufferfrompoorinitialestimatesofcostsand

benefits.29InreviewingasampleofrecentlycompletedorongoingtransitprojectsintheBayArea,SPURfound

largedifferencesbetweeninitialcostestimatesandcostestimatesdoneduringtheenvironmentalreviewphase,

27 AlonLevy,“WhyAmericanCostsAreSoHigh(Work-in-Progress),”Pedestrian Observations,March3,2019,https://pedestrianobservations.com/2019/03/03/why-american-

costs-are-so-high-work-in-progress/

28 “BARTEarthquakeSafetyProgram,”presentedbyRobertMitrofftotheBARTBoardofDirectors,May28,2015,https://www.bart.gov/about/bod/meetings/2015

29 KarenTrapenbergFrick,“MegaplanningforMegaandMiniProjects:CommonChallengesandWaysForward,”AppendixCinRatnaAmin,Caltrain Corridor Vision Plan,2017,

https://www.spur.org/publications/spur-report/2017-02-23/caltrain-corridor-vision-plan

MORE FOR LESS 17

whenthescopeoftheprojectisclearerandthedesignismoreadvanced.Further,actualcostsarealmostalways

muchhigherthaninitialestimates.Forexample,theactualcostsfortheTransbayTransitCenterwere40%higher

thantheinitialestimates.

IntheBayArea,financialandpoliticalcommitmentsaremadetoprojectsbeforethecostsarewelldefined.

Projectselectionoccursearlyandisbasedoninitialcostestimates,skewingdecisionstowardprojectsthatmay

notbecost-effectiveuponfurtherdesignandanalysis.Bythetimeaprojectisfinished,thecostsmayhave

increasedsomuchthatitisunlikelytheprojectwouldhavebeenselectedhadrealisticcost-benefitmetricsbeen

availableattheoutset.SeeFigure6forgreaterdetail.

So

urc

e:S

PU

Ra

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sis

wit

hs

up

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FIGURE 6

Differences Between Estimated and Actual Capital CostsThis chart shows the proportion of a project’s

costs that were accounted for early on in a

project’s life cycle and the proportion of a

project’s costs that only became known as

the project progressed through design and

construction. Comparing the early estimates

with advanced estimates gives an indication

of how much project cost estimates can

change between the time that an initial public

commitment is made and the point when a

project’s design comes into focus. This chart is

not intended to pinpoint the precise causes of

cost escalation for each project. The differences

often reflect the evolution and refinement as

a project moves beyond the most conceptual

stage and should not be interpreted as

malfeasance.

Initial construction cost

Change due to annual cost escalation

Change due to other factors

Construction cost savings relative to advanced construction cost estimate

Contingency and finance costs explicitly excluded from initial construction cost.

0% 50% 150% 200%100%

-11%

Downtown Extension Project***

Oakland Airport Connector***

International Boulevard Bus Rapid Transit***(East Bay Bus Rapid Transit)***

Transbay Transit Center***

Caltrain Electrification*** (4th and King to Tamien)***

Central subway***

SMART Larkspur to Cloverdale***

Silicon Valley BART Extension Phase II - Santa Clara***

Silicon Valley BART Extension Phase I - Berryessa***

BART Warm Springs***

* Project under construction or incomplete.

** Project not yet begun and not yet bid.

*** Phase I is complete by not closed out. VTA reports an anticipated $45 million in savings.

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Therearemanyreasonswhyinitialcostestimatescan meaningfullydifferfromactualprojectcosts,

including:

> Shifting timelines: Projectsoftenfaceaviciouscycle:Thehighertheinitialcost,thelongerittakestofund

them.Thelongerittakestofundthem,themoretheprojectcosts.Projectcoststendtoincreaseonan

annualbasisbasedonchangesinconstructioncosts(e.g.,laborandmaterials),whichcangrowby3%to

5%peryearonaverage.Whenaprojectisdelayed,thecostsinevitablygoup.Thisisparticularlytruein

aplaceliketheBayArea,wherestateandregionalgovernmentsplayonlyaverysmallroleinprioritizing

capitalinvestmentsandconsequentlythereissignificantpressuretospreadlimitedfundsthinacrossmany

projects.

> Scope changes:Theprojectmayevolvesteadilyinscope,scale,constructionmethodortechnologyfrom

thetimeitisconceivedtothetimeitcompletesitsenvironmentalreview.

> Limited resources for cost estimation early on:Thereareoftenfewup-frontresourcestodorigorous

costestimatingintheearly,conceptualstageofaproject.Manyprojectsarenominatedtotheregion’s

transportationplanwithoutacomprehensivefeasibilityassessmentorabusinesscase.Typically,these

earlycostestimatesdonotincludecomparisonstothecostsandtimelinesforsimilarprojectsanddonot

accountforfinancingcosts,whichcanbesizable.30

> Optimism bias:Globally,projectsarealmostalwayssubjecttooptimismbias,meaningthatpeopletend

toestimatethataprojectcanbedeliveredforlessmoneyandlesstimeandwithgreaterbenefitsthan

actuallyoccur.31

> Funding pressures:Thefederalgovernmentrequiresregionaltransportationplanstobefiscally

constrained,whichmeansthatthetransportationinvestmentsincludedmustbepossibletofund

usingreasonablyanticipatedsourcesofrevenueaswellasfundingfromlocalballotmeasures.32There

issignificantpressuretomakeaprojectappearcost-effectiveforittobeincludedintheregional

transportationplanandthereforebeeligibleforfederalandstatefunding.

30 Ibid.

31 Ibid.

32 FederalTransitAdministration,“FinancialPlanning&FiscalConstraint,”March11,2019,https://www.transit.dot.gov/regulations-and-guidance/transportation-planning/financial-

planning-fiscal-constraint

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Cost Estimation for London’s Elizabeth Line

CrossrailLtd.isapubliclyownedprojectdeliveryorganizationthatisdevelopinganew73-milerailway

line,theElizabethLine,underthebusiestpartofLondon.AsubsidiaryofTransportforLondon,itisjointly

ownedbyTransportforLondonandtheU.K.DepartmentforTransport.Indeterminingacostestimate

fortheproject,CrossrailLtd.builtacomprehensivecostmodelthatquantifiedrisksanduncertainties

andsettledona“costenvelope,”orrange,ratherthanasinglenumber.ThisapproachallowedCrossrail

Ltd.tohaveamorehonestconversationwithprojectsponsorsabouttheuncertainties,encouragingtheir

fullengagementinkeydecisionsthatwereneededtodelivertheprojectsuccessfullyandsecuringthe

abilitytosuccessfullydefendtheprogramwhenpoliticalleadershipchanged.Theearlyemphasisonrisk

assessmenttranslatedintoafocusonriskmanagementinallpartsoftheproject.33ThoughtheElizabeth

Line,likeothertransitmegaprojectsaroundtheworld,hasexperienceddelaysandcostescalation,itsmost

recentcostestimate,at£18.25billion,isstillwithinreachoftheinitialcostenvelope.

Together,thesechallengesmeanthatwhenaprojectmakesitintotheregionaltransportationplanora

ballotmeasure,thecostestimateisprobablytoolow.Lowfront-endcostestimatescanleadprojectsponsors,

MTCandotherpolicymakerstosupportprojectsthattheymightnothavebackedifthey’dhadmoreaccurate

costestimates.Astimegoeson,thiscanhavecascadingeffects:Costsandtimelinesalmostalwaysincrease

whenaprojectgoesthroughmorethoroughdesignandengineering;projectshavetogobacktotheballotand

publictrustdeteriorates;andprojectsponsorsareoftenrequiredtocompromiseonprojectdesignandquality

tomakeendsmeet.Yetittakesgreatpoliticalbraveryandpersonalrisktorevisitaprojectthatthepublichas

committedtoinaballotmeasure,evenwhenitbecomesriddledwithredflags.Therefore,itiscriticalthatthe

BayAreaimprovetheup-frontworkofprojectevaluationandselection.

Recommendation 1: Expand MTC’s authority to act as the region’s transit network planner.

Who’s responsible: California legislature, transit agencies, congestion management agencies

Therearemanyplacesaroundtheworldwithhigh-functioning,seamlesstransitnetworksthatrelyonmultiple

operatorstodeliverservices.Theseplacesallhaveoneentitythat’saccountablefordesigningthenetwork.This

transitcoordinator,sometimesreferredtoasa“networkplanner”or“transportalliance,”plansandintegrates

projects,services,faresandcustomerinformationsothattheyadduptoamoreintegratedandfunctional

network.TheBayAreaismissingthiscriticalinstitutionalrole.

ThoughMTC’smandateistobethetransportationplanning,financingandcoordinatingagencyfortheBay

Area,ithasnotexerciseditsauthoritiestofulfillitsplanningandcoordinationfunctions.Itfocusesprimarilyon

itsfinancingrole,selectingwhichprojectswillreceivestateandfederalfunding.Inpart,MTCislimitedbythe

33 SimonWright,RichardPalczynski,andPatricktenHave,“CrossrailProgrammeOrganizationandManagementforDeliveringLondon’sElizabethLine,”Proceedings of the

Institution of Civil Engineers,2017,https://learninglegacy.crossrail.co.uk/wp-content/uploads/2017/09/1R-001-Programme-organisation-and-management.pdf

MORE FOR LESS 20

constraintsofitsowngovernancestructure,whichismadeupprimarilyofofficialswhoarelocallyelectedand

thereforefacecompetingcommitmentsbetweenmakingregionaldecisionsandmaximizingtheinvestmentin

theirlocalcommunities.Inpart,MTCisalsohamperedbyitslackoftransitoperatingexpertise,whichattimes

engenderspushbackfromoperators.Ultimately,transportationplanningislargelydonebytransitagenciesand

countycongestionmanagementagencies.Thus,MTCendsupactingasaregionaltransportationprojectselector

ratherthanaregionaltransportationplanner.34Asaresult,theregion’stransportationplanisusefulforfinancial

planningbutisfundamentallynotaplanningtoolforlong-rangeinfrastructurebuildout.

Inothercountriesaroundtheworld,regionalnetworkplannersplayacriticalroleinguiding,evaluating

andselectingthecapitalprojectsthatgetbuilt.Theydothisbyestablishingalong-range,service-basedvision

toguidecapitalinvestmentprogramsandbyinstitutingaprocessthroughwhichprojectsareperiodicallyand

objectivelyevaluatedfortheirbenefits,costs,deliverabilityandrisks.

Recommendation 2Develop a long-term strategic plan for a seamless network of regional transit and managed highway lanes to guide capital investments.

Who’s responsible: MTC, transit agencies, cities, Caifornia State Transportation Agency (CalSTA), Caltrans,

California Highway Patrol (CHP)

Along-rangeplanfortheregion’stransitnetworkwouldprovidethevisionandstrategicdirectionfortheBay

Area’sinfrastructureneeds,makingprojectselectionmoretransparentandpublicdollarsmorepurposeful.SPUR

recommendsthatMTCdevelopandimplementalong-termstrategicplanforserviceperformanceandcapital

investmentsoftheregional,trunk-line“backbone”networkandforhigh-frequencyroutesthatconnectpeople

totheregionalsystem.Thisshouldalsoincluderegionalexpressbusservicethatrunsonanetworkofhighway

lanesthataremanagedandpriced.35(Formoreinformation,seeSPUR’sforthcomingpaperA Transit Coordinator

for the Bay Area.)

Thestrategicplanshould:

> Identifykeyregionaltransitandmanaged-lanecorridorsforhigh-frequency,rapidtransitservicesandkey

corridorsforfeederservicesintotherapidnetwork.

> Defineaservicevisionthatprovidesregionaltransitservicesatregular,repeatingintervalswithminimized

waittimesbetweentransfers.

> Establishregionalgoalsandstandardsforthequalityofserviceoneachcorridoridentified.Thestandards

shouldfocusonaccessandcovertwocategoriesofservicequality.Thefirstisoperationalelements

suchasfrequencyofservice,hoursofservice,safety,reliability,timedconnections,speed,productivity

34 Forinstance,forPlanBayArea2050,localgovernments,transportationagenciesandcongestionmanagementagenciesnominated93projectsforevaluation.Witha$423

billionbacklogforoperations,maintenanceandrepair,MTCisonlyconsideringahandfuloflow-costprojectssprinkledthroughouttheregion,alongwithfundingtostudya

secondtransbaycrossing,asofthiswriting.See:MTC,“PlanBayArea2050:DraftBlueprintStrategies,”presentedFebruary20,2020,totheJointMTCPlanningCommitteewith

theABAGAdministrativeCommittee.

35 Forthepurposeofthispaper,expresslanes(alsoreferredtoashigh-occupancytolllanesorHOTlanes)areaformofmanagedhighwaylanesthatcanbeusedbyhigh-

occupancyvehiclesforfreewhilepermittingaccesstoothervehiclesforavariablefeethatisadjustedsothatthesevehicleswillnotexceedavailablecapacityinthelane.

Regionalexpressbusservicereferstobusservicethatprimarilyoperatesatamulti-countyorregionalscale,travelingonmanagedhighwaylanesandmakinglimitedstops.Such

servicesoftenextendoutsidetheboundariesofasingletransitdistrict.

MORE FOR LESS 21

andinteroperability(theabilityfordifferentservicestousethesametracks,vehicles,maintenanceyards

andsignalsystems).Thesecondisuserexperienceelementssuchasinformationdisplay,schedule

coordination,easeoftransferringbetweenservices,ticketingandfarepolicy,amenitiesandcomfort.

Importantly,theservicevisionandstandardsmustdrivecapitalinvestmentdecisions.Theplanprovidesa

strategicframeworkforthewiderpublicpolicyobjectivesthatcapitalinvestmentsshouldachieve.SPURbelieves

thatMTCshouldonlyallocatefundingfromregionalballotmeasuresandstatediscretionaryfundstoprojects

thatalignwiththelong-rangestrategicplan.Thestrategicplanshouldbecoupledwithalistofpriorityprojects

thataresignificanttotheregionandafundingplanforimplementationinfive-yearand10-yearincrements.

Absentanimplementationplanthatisconsistentfromyeartoyearandmakesclearthestandingofeachproject,

theintensecompetitionbetweentransitagenciesforeverynewfundingopportunitywillcontinue.

TheBayAreacandrawoninternationalbestpracticesformodelsofnetworkplanners.Forexample,

thenetworkplannerinZurich,ZVV,establishesaservice-basedvisionfortheregion.ZVVdeterminespublic

transitservicefrequenciesbasedonpopulationandemploymentdensitywithnobiasforeitherbusorrail.The

standardsareorganizedinto“supplyzones,”areaswithacombinationofatleast300people,jobsandtraining

places.Theseareservedatleasthourlybyatleastonestop.36Theservicelevelsincreasebasedonthesizeand

densityoftheplaceonaregular,repeatingschedule,increasingtominimumservicefrequenciesofanhour,

halfhourorevery15minutes.37Capitalinvestmentsaremadeonlyasnecessarytoachievetheservicevision

andreliabletraveltimes.Inthisway,theservice-basedplanisusedtoprioritizefuturecapitalinvestments:

Improvementsaremadeonlyiftheyworktoachievethatscheduleregardlessofwhethertheymeetthetransit

agency’sownperformancegoalsorpoliticalcommitments.

There’salreadyamodelforsuccessclosertohome.In2018,Californiadevelopedaservice-basedstaterail

vision,withhourlyandhalf-hourlyserviceminimumsonkeystatecorridors.Sincethen,railagenciesacrossthe

statehavebeenworkingtogethertoimplementthisplanbydoingmoredetailedbusinessplanningandrail

planningineachcorridor.Caltrainiscurrentlyintheprocessofcompletingitsbusinessplan,whichincludes

aprogramofcapitalinvestmentsforincreasedservice.CapitolCorridor,Caltrain,AltamontCorridorExpress

(ACE),theCaliforniaHigh-SpeedRailAuthority,theSanJoaquinRegionalRailAuthorityandAlamedaCounty

TransportationCommissionareworkingtogetheronaNorthernCaliforniaNetworkIntegrationplantomapout

theinfrastructureneedsandtrade-offstoachievethestate’svision.Thestaterailplan’sstrategicvisionprovided

afoundationfortransitagenciesandoperatorstodomoredetailedcapitalandoperationalplanningtomeet

thatvision,whichcaninturninformtheBayArea’spriorityinvestmentstrategyandfederallymandatedregional

transportationplan.

Recommendation 3 Establish a “stage gate” process with phases and periodic decision points to determine a project’s readiness to advance into the next stage in the project life cycle.

Who’s responsible: MTC

36 TimPetersen,“NetworkPlanning,SwissStyle:MakingPublicTransportWorkinSemi-RuralAreas,”Proceedings of the 32nd Australasian Transport Research Forum(ATRF).

https://www.researchgate.net/publication/254609967_Network_planning_Swiss_style_Making_public_transport_work_in_semi-rural_areas

37 PaulMees,Transport for Suburbia: Beyond the Automobile Age, EarthscanPublishing,2010.

MORE FOR LESS 22

Severalcountrieshavedevelopedveryrobustinstitutionalframeworkstoensureaccountabilityandtransparency

inprojectdeliveryandexcellenceinplanningandconstruction,withmanyagenciesplayingadiscreterole.For

example,theUnitedKingdomhasanagencythatevaluatesandselectscapitalprojectsusingstandardized

criteria,NetworkRail,aswellasapublic-sectorcabinet-level(national)InfrastructureandProjectsAuthority,

whichsupportsprojectdeliveryacrossmanyinfrastructuresectorsforprojectsreceivingpublicfunds,anda

NationalAuditOffice,whichprovidesoversightonmajorcapitalprojectsandagencieslikeCrossrailLtd.

TheBayArealacksastrongframeworkforaccountabilityandtransparencyinprojectdelivery.SPUR

recommendsabiggerroleforMTCinprovidingoversightandaccountabilityovermajortransitprojects.MTCis

wellpositionedtotakeonagreateroversightrolebothbecauseitassumessomeofthefinancialriskasaproject

investorandbecauseithasabroadmandatetoservethepublic.

OnewaytoaddressthisisforMTCtoestablishastagegateprocess.Astagegateprocessisaproject

managementtechniquethatdividesaprojectorprocessintophasesorstages,separatedbydecisionpoints,

knownas“gates.”Duringatransitproject’sselectionandfunding,stagegatesoccuratmajorprojectphase

transitionsandgovernwhetheraprojectcanmovetothenextstagetowarddeliveryandoperation.Ateach

stagegate,projectsponsorsarerequiredtosubmitasetofdeliverablesforevaluation.Stagegatesareintended

topreventagenciesfrommakingcommitmentstoprojectsbeforeitisdeterminedthattheprojectissound,that

projectsponsorsanddeliveryagentsarepositionedtosucceed,thatthegoalsandobjectivesremainclearand

understoodandthattheprojectcanbeexpectedtodeliveronthosegoalsandobjectiveswithincurrentfunding

andtimeconstraints.

MTCshoulddefineperiodicreviewsthattakeplacebetweenstagesinthetransitselectionandfunding

process,usingtheresultsofthereviewtoallocatefundingandmakesurethatallactorsarefullycoordinated

andaligned.Thereviewprocessshouldbedesignedtoaccomplishthefollowing:

> Assessprojectprogress.

> Ensuretransparencyamongstakeholderagencies.

> Identifyandreduceprojectuncertainties.

> Coordinateandgainalignmentamongprojectsponsors,fundersandotherdecision-makingentities.

> Determinetheprojectsponsor’sorganizationalreadiness.

> Ensurethatfundingisdistributedonlytotheprojectsthatarereadytoadvance.

> Supportlearningbyevaluatingprojectperformance.

Thisuseofstagegatesisabroadlyappliedbestpractice.Internationally,ithasbeendeployedwithsuccess

byanumberofdeliveryorganizationsformajortransitprojects.Forexample,NetworkRail,themanagerfor

mostoftherailwaynetworkintheUnitedKingdom,appliedastagegateprocesstotheElizabethLineproject;

initiallyintendedasguidance,itevolvedtoinformthegovernanceframeworkfortheprojectasitrevealedthe

needforstrongerdecision-making.(Seesidebar“NetworkRail’sGovernanceforRailInvestmentProcess”on

page23.)IntheAustralianstateofNewSouthWales,infrastructureinvestmentfollowsagatewayreviewprocess

withdetailedguidancetoassistleadagenciesinmanagingstructuredandtransparentreviewsbetweeneach

stage.Similarly,theU.S.FederalTransitAdministration(FTA)usesaformofstagegates,definingdeliverables

thatprojectsponsorsmustsubmitineachphaseofaproject’slifecycleinordertoreceivefundingfromtheNew

Startsprogram.38Thisprovidessponsoragencieswithaclearroadmapforwhatmustbedonetodeliverproject

funding.However,thisprominentU.S.modelisfocusedmoreonfundingqualificationthanonprojectdelivery.

38 FederalTransitAdministration(FTA),“FinalInterimPolicyGuidanceFederalTransitAdministrationCapitalInvestmentGrantProgram,”June2016,https://www.transit.dot.gov/

sites/fta.dot.gov/files/docs/FAST_Updated_Interim_Policy_Guidance_June%20_2016.pdf

MORE FOR LESS 23

Network Rail’s Governance for Rail Investment Process

NetworkRailisthepublicownerandoperatoroftheU.K.’srailwaynetworkandlargestrailwaystations.

Britain’strain-operatingcompaniesproviderailservicetopassengers,leasingandmanagingstations

fromNetworkRail.ThisarrangementallowsNetworkRailtofocusoninfrastructuremanagementand

delivery.

NetworkRaildevelopedtheGovernanceforRailInvestmentProjects(GRIP)process,aformal

governanceframeworkforrailinfrastructureprojects.GRIPdefinesproductsandstandardsthatare

requiredbeforeaprojectcanmovetothenextphaseofprojectdevelopmentorconstruction.Because

NetworkRailmanagessuchawidearrayofprojects,thespecificGRIPdeliverablesvarysignificantlyand

arecustomizedbystaffwithapprovalfromaprofessionalboard.

FIGURE 7

Network Rail’s Stage Gate Process: GRIPThe U.K.’s Network Rail39 uses a process called Governance for

Railway Investment Projects (GRIP) to manage and control its

projects. It breaks down each project into discrete stages and

prescribes products to be produced at each stage. A stage gate

review is held before a project can move into its next stage.

Recommendation 4Rigorously evaluate the business case and delivery options for a project, especially before making financial and political commitments to it.

Who’s responsible: MTC, transit agencies, congestion management agencies

Asdescribedabove,projectsponsorsarecompelledtogettheirprojectintheregionaltransportationplanor

inaballotmeasureinordertoqualifyforfunding,oftenwithouthavingcompletedrigorousplanningstudies.

Projectsarecommonlyselectedforfundingbasedoninitialcostestimates,whichcanchangesignificantlyas

discussedabove.SpendingmoretimeonplanningbydevelopingabusinesscasecanhelptheBayAreaimprove

itsinvestmentpriorities,reducethetimeandcostassociatedwiththeenvironmentalreviewprocess,lower

constructioncosts,shortentimelines,40changethepublicdiscoursearoundaproject’simpactsandhelpmake

39 NetworkRail,“InvestingintheNetwork,”2018,p.11,https://www.networkrail.co.uk/wp-content/uploads/2018/02/Investing-in-the-Network.pdf

40 Inareviewof“megaprojects”aroundtheworld,McKinseyfoundthatspending3%to5%ofthecapitalcostoftheprojectonearly-stageengineeringanddesignproduces

farbetterresultsinon-timeandon-budgetdelivery.See:NicklasGaremo,StefanMatzingerandRobertPalter,“Megaprojects:TheGood,theBad,andtheBetter,”July1,2015,

https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/megaprojects-the-good-the-bad-and-the-better#

1

OutputDefinition

2

ProjectFeasibility

3

OptionSelection

4

Single OptionDevelopment

5

DetailedDesign

6

Construction Test & Commission

7

SchemeHandback

8

ProjectCloseout

Initiate ChooseOption

Design Build Close

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surethatthepublicagency’sgovernanceandmanagementstructurefortheprojectarewellequippedtodeliver

alargeproject.

Abusinesscaseisacomprehensiveapproachforassessingthebenefitsandcostsofaprojectand

evaluatingtheimpactsofpotentialtransitinvestments.Aroundtheworld,businesses,governmentsandother

institutionsusebusinesscaseanalysesforevidence-basedandtransparentdecision-making.Inthepublic

sector,thiskindofevaluationallowspolicymakersandtaxpayerstohaveconfidencethatthebillionsofdollars

investedininfrastructurewillyieldworthwhileresults.Abusinesscaseisakeydeliverableinastagegate

process.Importantly,completingabusinesscaseonceisnotsufficient.Thebusinesscaseismadeandupdated

severaltimesovertheprojectlifecycle,astheprojectgetsclearerandmoreinformationbecomesavailable.

Additionally,it’simportanttoupdatethebusinesscasewhenmakingcriticaldecisionsthatmaysignificantlyalter

projectcosts,suchaschangingconstructionmethodsorusingadifferenttechnologythanoriginallyplanned.In

sum,abusinesscaseanalysishelpsjustifyatransitproject,makessureitalignswiththeregionalvision,servesas

aplanningtooltodetermineinitialprojectalternativesandtoengagethepublicandprovidesanaccountability

toolfordecisionsmadeduringprojectdevelopmentandconstruction.

SomeBayAreatransitagenciesarestartingtousebusinesscasestodeveloptheirlong-rangecapitalplans,

includingCaltrainforits2040visionandBARTandCapitolCorridorforasecondtransbaycrossing.SPUR

recommendsrequiringandinstitutionalizingthepracticeofusingbusinesscaseanalyses.Thebusinesscase

shouldrigorouslyevaluatecostsandbenefits,accountingformajorrisksandcomparingprojectcoststosimilar

completedprojects(knownas“referenceclassforecasting”),andweighmultipleinitialprojectalternativesto

reducethenumberthatmustbeconsideredintheenvironmentalprocess,savingtimeandmoney.

Additionally,SPURrecommendsrequiringandinstitutionalizingdeliverabilityassessments.Adeliverability

assessmentanalyzesalldeliveryoptions(seesidebar“ProjectDeliveryModels”onpage34formoreabout

deliverymethods).Itevaluatestraditionalandnontraditionaldeliverymodelsusingaquantitativevaluefor

moneyanalysis,identifiesstakeholderdeliverabilityrequirements,laysthefoundationofaprojectgovernance

structureandevaluatesandassignsrisks.Thefirstdeliverabilityassessmentistypicallydonepriortodesignand

environmentalclearance,becausethepreferreddeliveryoptionmayrequirethatthecontractorbemoreheavily

involvedindesignandengineeringfortheproject.

MTC,asaprimaryfundingpartnerandtheentityaccountableforestablishingtheregionaltransitnetwork,

should:

> Createguidancedocumentssothatprojectsponsorscandevelopbusinesscasesanddeliverability

assessmentsthatareconsistentandcomparableforarangeofpotentialcapitalinvestments.41

> Allocatefundingforthecompletionofabusinesscaseintheplanninganddevelopmentphaseofa

project’slifecycle.

> Forallprojectsover$250million,requireprojectsponsorstosubmitabusinesscasepriortoinclusionin

theregion’stransportationplanforenvironmental,constructionorright-of-wayfundingandagainpriorto

enteringtheprocurementphase.

41 OnesuchexampleistheU.K.’s“GreenBook,”aguidancedocumentdevelopedbythetreasuryforestimatingthesocial,environmentalandeconomiccostsandbenefitsof

projects.(See:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/685903/The_Green_Book.pdf.)InfrastructureNewSouth

Walesalsoprovidesdetailedguidancematerialsforvarioustypesofcapitalprojects.

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> Forallprojectsover$250million,requireadeliverabilityassessmentatthreepoints:beforechoosinga

finaldesignoption,beforeenteringtheenvironmentalphaseandbeforeenteringtheprocurementphase.

Ideally,thedeliverabilityassessmentwouldbeproducedbyanewentitythathasspecializedprocurement

anddeliveryexpertiseandaregionalportfolio,asdescribedinRecommendation6.

Recommendation 5Establish integrated project management teams throughout the project life cycle.

Who’s responsible: MTC, cities, transit agencies, Infrastructure Bay Area (see Recommendation 6)

AkeyfindingfromSPUR’sresearchisthatbringingtogetherdifferentskillsandexpertiseiscriticalforplanning

anddeliveringtransformationaltransitprojects.Anintegratedprojectmanagementteamactsasasinglepoint

ofresponsibilityforaproject’soutcomes.Theteamprovidesacriticalconnectionbetweenexecutiveleaders,the

integratedprojectteamandcontractorsandenablesalignmentbetweenallpartiesandquickdecision-making.

Theentityresponsibleforbuildingtheprojectmustbeabletotrusttheplanningprocessandshouldnotrevisit

majorplanningdecisions;however,somehardchoicesinevitablyemergewhentheprojectisconfrontedwith

difficultorunanticipatedchallenges.Anintegratedprojectmanagementteamalignsplanning,operatingand

deliveryconsiderationswhenthesedifficultdecisionsmustbemade.42

Anintegratedprojectmanagementteamisespeciallyimportantiftheagencyinchargeofoperatingthe

transitserviceisnotthesameagencythatistakingtheleadonfunding,planningordesigningtheproject.

TheextensionofBARTintoBerryessaofferstheregionacautionarycasestudyforotherprojects,suchasthe

DowntownExtension(SanFrancisco),high-speedrailortheBARTextensionfromBerryessatoSantaClara.The

BARTextensionintoBerryessawasfundedbythetaxpayersofSantaClaraCounty,andVTAplanned,designed

anddeliveredtheproject.ButBARToperatesthetrainsthatservetheextension.Onceconstructionwasdone,

therewereoverathousanddiscrepancies43thatneededtoberesolvedbeforeBARTcouldbeginservice,which

delayedtheprojectopeningbyanextraninemonths.

Integratedprojectmanagementteamscanleadtobetteroutcomes.Forinstance:

> Includingtransitoperatorsinintegratedprojectmanagementteamscanimprovetheproject’slife-cycle

costsandfostersystemintegrationandinteroperability,especiallyiftheoperationaldecisionsarealigned

withaproject’sbusinesscase.Theirperspectiveisespeciallyvaluableonissuesofsysteminteroperability

anddesigndecisionssuchasspaceplanningforstationsandpassingtracks,aswellasmaintenanceneeds

andemergencymanagement.Involvingoperatorsduringtheprojectdevelopmentandconstruction

phasesiscriticaltoensuringthattheprojectisreadyforoperationsandservice,aswellasforproviding

continuousserviceoralternativemodesandcustomerinformationduringconstruction.

> Includingconstructionandprojectdeliveryexpertsinintegratedprojectmanagementteamscanensure

thatfundsareusedefficiently.Forinstance,projectdeliveryexpertswillbeabletodeterminehowtobest

phaseprojectsthatarephysicallyco-located,inordertoavoidhavingtodemolishorrebuildstructures

42 PWC,2014,SuccessfulCapitalDelivery:Theartandscienceofeffectivegovernance,”https://www.pwc.com/gx/en/industries/assets/pwc-successful-capital-projects.pdf

43 VTABoardofDirectorsMeeting,March5,2020,http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=2970&Inline=True

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unnecessarily.Projectdeliveryexpertscanalsoweighthetrade-offsofoperationalconsiderationsagainst

otherelementsofaproject’sbusinesscase.

> Involvingplannersintheconstructionphasehelpstoretainaproject’svisionwhendifficultdecisions

arerequiredtomatchtheprojectscopetothebudgetorwhenunanticipatedconditionsariseduring

construction.Thoughconstructionisalatephaseintheprocess,it’sstillatimewhenplannersmaysuggest

co-benefitsthatcouldbeworthintegrating,suchasaddingafiberopticcablenetworkormakingsurface-

levelstreetimprovementsforbikingandwalking.

Summary

TheserecommendationsrepresentanexpandedroleforMTC,makingitaccountablefortheregion’stransit

networkandforimplementingchecksandbalancestomakesurethatonlyprojectsthatbuildoutaseamless

networkareadvanced.Withbetterplanningandoversight,theBayAreawillgetbetterprojects.

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FIGURE 8

Metrolinx Business Case Process

Metrolinx44, the regional transportation network

planning agency for the Toronto-Hamilton

region in Canada, has developed business case

44 Metrolinx,BusinessCaseManualVolume2:Guidance,p.17,http://www.metrolinx.com/en/regionalplanning/projectevaluation/benefitscases/Metrolinx-Business-Case-Guidance-

Volume-2.pdf

guidance for transit agencies to use for all

projects over $250 million (Canadian dollars).

Establishing the business case is an ongoing

process. Multiple business cases are completed

over the course of a project’s life cycle: early

conception and options analysis (initial business

case), the identification of a preferred option

(preliminary design business case), preferred

option development (full business case) and

project closeout (post in-service business case).

1717

Initial Business Case

• The Initial Business Case compares investment options and selects a preferred option for further refinement and design.

• This Business Case is typically used to secure funding from the Province for planning and preliminary design.

Preliminary Design Business Case

• The Preliminary Design Business Case takes the recommended option of the Initial Business Case and reviews different approaches to refine and optimize it.

• This Business Case is typically used to secure funding from the Province for procurement and construction.

• This stage of the Business Case Lifecycle typically occurs in parallel with the Environmental Assessment process.

Full Business Case

• Full Business Case confirms a specific option (including benefits realization, financing, and delivery plans) for procurement.

Full Business Case

• Updated (if required).

Post In-Service Business Case

• The Post In-Service Business Case reviews the actual costs and performance of the investment after the asset has gone into service. This Business Case provides lessons learned and opportunities to enhance the services being provided.

1 Strategic Planning

Identifies problem statement and defines benefits that the project needs to deliver.

2 Feasibility and Options Analysis

Evaluates options and determines a preferred option. Typical point at which funding for planning and preliminary design is secured.

3 Preliminary Design

Refines preferred option, further clarifying scope and cost. Typical point at which funding for procurement and construction is secured.

4 Design & Procurement Preparation

Develops project framework, designs and requirements used as the basis for procurement.

5 Procurement

Procures the project.

6 Construction, Commissioning & Delivery

Delivers and commissions the project.

7 In Service

After the asset is in service, monitors the benefits and costs to identify opportunities for enhancements and lessons learned.

The Benefits Management Framework includes the Business Case and Project Lifecycle

Benefits management ensures that the initial benefits and value identified as the rationale for investing in a project are achieved through the project lifecycle. The process relies on the Business Case which serves as the evidence guiding decision-making. The framework includes stage-gates, approval points, and other accountability checks and balances.

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Big Idea 2

Create a new organization to deliver the region’s most significant and high-risk projects.

ChallengeTransit agencies deliver major capital programs and projects just once in a generation, making it difficult to transfer lessons learned from one project to another and to accrue expertise.

AchiefproblemunderlyingtheBayArea’srepeatedfailuresofprojectdeliveryisthefactthatsomanypublic

transitagencieswilldeliverjustasinglemajorprojectoverthecourseofseveraldecadesofoperation.San

FranciscoMuniisbuildingitsfirstsubwayin40years.Caltrainisembarkingonitsfirstmajorcapitalinvestment

programsincetakingoverthecorridorfromthestatein1987.Andmanyneworganizationsaresetupprecisely

todeliverjustonepieceofinfrastructureandthendissolve.Forexample,theTransbayJointPowersAuthority

wassetuptodelivertheSalesforceTransitCenter,andValleyLinkwasestablishedtodeliveraraillinkbetween

Dublin/PleasantonandStockton,connectingBARTandACE.Wheneachagencydeliversonlyoneprojectina

generation,everyprojectisatriskofmaking“firsttime”mistakes.

ChallengeTransit agencies often lack flexibility in procurement and have a hard time attracting project delivery expertise in-house.

Manytransitagenciesalsohaveverylittleflexibilityintheprocurementandselectionofconstructioncontractors.

California’sprocurementlawsrequirepublicagenciestochoosethelowestresponsiblebidder,meaningthe

lowestbidderwithadequateinsuranceandlicensing.45Thisisproblematicbecausethelowestbiddermayhave

apoortrackrecordormaylacksomeofthenecessaryskillsorexperience.Thislawincentivizescontractorsto

submitalowbidtowinthecontractbutdoesnotensurequalityorpreventcostoverruns.Costscanstillescalate

withlast-minutechangeordersanddelays,ashasbeenthecasewithSanFrancisco’sCentralSubway.46Though

45 Inadditiontostatelaws,federallawsalsolimitflexibilityinprocurement.Theynotonlycompelprojectsponsorstoselectcontractorsbasedonalowbidbutalsorequire“steel,

iron,andmanufacturedgoodsusedintheproject”tobemadeintheUnitedStates.ThoughthisbenefitsAmericanmanufacturingindustryandjobs,projectsponsorsreportthat

itcansometimesleadtohighercostsandlongerwaittimes.See:FTA,“BuyAmerica,”https://www.transit.dot.gov/buyamerica

46 PaulBerger,“PortAuthorityFightsLawsuitOverRenovationDelays,”Wall Street Journal,July14,2019,https://www.wsj.com/articles/port-authority-fights-lawsuit-over-

renovation-delays-11563120044;andJoeFitzgeraldRodriguez,“CentralSubwayContractorDisputeThreatenstoBustBudget,”San Francisco Examiner,July20,2019,https://

www.sfexaminer.com/the-city/central-subway-contractor-dispute-threatens-to-bust-budget/

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California’sprocurementlawsareintendedtoeliminatecorruptionandenhancefairness,therequirementto

choosethelowestresponsiblebiddercansometimesgenerateunnecessarytimeandcostandmaynotalways

leadtoahigh-qualityproduct.

Transitagenciesalsofacedifficultiesrecruitingseasonedprocurementandprojectmanagementexperts

whocanimplementnontraditionaldeliverystrategies(forexamplesofthesemethods,seesidebar,“Project

DeliveryModels”onpage34).SeveralexpertsSPURinterviewedarguedthatonereasontransitagencieshave

adifficulttimeattractingthesespecializedskillsisthatcivilservicecompensationpackagesarenotcompetitive

withthoseintheprivatesector.Additionally,similarrolesintheprivatesectorallowforopportunitiestowork

oniconicprojectsaroundtheworldwithlesscomplexregulatoryandstakeholderenvironments.Asidefromthe

newspanoftheBayBridge,theBayAreahasnotbuiltaniconicprojectforsometime,inpartbecauseitisa

notoriouslydifficultcontexttonavigate.

ChallengeTransit agencies have few choices in selecting project delivery models and little experience with nontraditional models.

Transitagenciestendtohavefewchoicesinhowtheyhirecontractorstodesignandbuildprojects,often

relyingontraditionaldesign-buildordesign-bid-buildmodels.Thesemodelstypicallyonlyinvolvecontractors

inthelatterstagesoftheprojects,yetmanyprojectdeliveryexpertsagreethatprojectsbenefitfrominvolving

contractorsearlierintheprocess,particularlyoncomplexprojects.Asaresult,projectslackthebenefitof

bringingdeliveryexpertiseandafullunderstandingoflife-cyclecostsintotheprojectdecisions.

EvenwhentheStateofCaliforniagrantstransitagenciestheauthoritytoenterintodifferenttypesofproject

deliverymodels,theagenciesoftenlacktheexpertiseorstaffcapacitytocomprehensivelyevaluatedifferent

modelsortounderstandthemarketconditionsinordertoeffectivelybid,awardandmanagethecontract.

TransitagenciesinCaliforniaweregrantedtheauthoritytoimplementdesign-buildcontractsin200147,yet

becausesofewprojectshavebeenbuilt,fewareexperiencedwiththistool.Similarly,transitagenciescouldissue

smaller,phasedcontractsinsteadofalump-sumcontract,butmanydonot.Alackofexpertiseoftentranslates

intoapublicagencyhavinglesscontroloverperformance,workqualityandcost.

47 CaliforniaLeagueofCities,“Design-BuildforPublicWorksProjects,”May6,2015.https://www.cacities.org/Resources-Documents/Member-Engagement/Professional-

Departments/City-Attorneys/Library/2015/2015-Spring-Conference/5-2015-Spring-David-Gehrig-Design-Build-For-Public.aspx

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Project Delivery Organizations Around the World

Therecommendationsinthisreportareinformedbyaliteraturereviewonmegaprojectdelivery,lessons

learnedfromBayAreaprojectdeliverypractitionersthroughinterviewsandataskforce,andinterviewswith

organizationsinothercountriesthatareresponsibleforprojectdeliveryandprocurement,eitherdirectlyorinan

oversightcapacity.SPURcastawidenettocaptureallthepossiblesolutionstotheproblemofprojectdelivery,

thennarroweddownthelisttothosethatwouldhavethegreatestchanceofsuccessintheBayAreacontext.

Thefollowingtypesoforganizationshavebeenestablishedinothercountriestosupportexcellencein

projectdelivery.WeevaluatedeachoneforitspotentialtoaddresstheBayArea’sprojectdeliverychallenges,

whichledtothedevelopmentofRecommendation6.Forcasestudiesfromourresearch,seeourcompanion

paper,Infrastructure Bay Area: A proposal for successful delivery of transformative transit projects (spur.org/

IBA).

> Skill academies:Skillacademiesfocusonbuildingthehighlyskilledlaborforceneededtoundertakemajor

infrastructureprograms.OnesuchexampleincludestheU.K.’sTunnelingandUndergroundConstruction

Academy,whichtrainspeopleinthisuniqueskillset.

Upshot:Skillacademiesplayanimportantpartinbuildingtheworkforceneededforsuccessfulproject

delivery,andSPURwouldsupportbringingthisideatotheBayAreaand,morebroadly,California.

However,workforcedevelopmentisoutsidethescopeofthisreport.

> Centers of excellence:Centersofexcellenceoperateasspecializedadvisorsandconsultantstopublic

agenciesonsomeorallpartsofprojectdelivery.Theseareintendedtosupplementtheexpertiseof

projectsponsorsandaddgreaterobjectivitytotheprojectdeliveryprocess.Someprojectdelivery

agenciesalsofunctionascentersofexcellence.Forinstance,forlargetransitprojects,Infrastructure

Ontariobothdirectlymanagestheprocurementanddeliveryofmajorinfrastructureprojectsandalso

providesadvisoryservicestootherpublicagenciesoncommercialtransactions.

Upshot: Thoughcentersofexcellenceareonewaytobringspecializedexpertiseinprocurementand

projectdeliveryandcansupplementthecapacityofexistingagencies,anewagencythatadvisesbutdoes

notdirectlymanageprocurementandprojectdeliveryrunstheriskofbecomingtoodetachedfromthe

actualprojectanditsfinancialrisks.Additionally,settingupsuchacentermaynotaddmuchmorevalue

thanifaprojectsponsorweretohireaprivate-sectorconsultantwiththerelevantexpertise.

> Single-project planning and delivery entities: Someentitiesareestablishedtoplan,procureanddeliver

singleprojects.Thesetypicallysunsetoncetheprojectwrapsupandcontrolofthefacilitytransfersto

theoperatororowner.Suchanentityisoftenasubsidiaryorganizationorpublic-privatepartnership

composedofprojectsponsorsandlocal,regionalorstategovernments.Thesingularityofbothpurpose

andprojectmeansthateveryonecanfocusononegoal:planninganddeliveringtheproject.

Upshot: ThismodelisalreadyinuseintheBayArea.TheTransbayJointPowersAuthorityandValley

Linkaretwosuchexamples.Thoughthismodelbringsclarityoffocusandmoredirectaccountabilityto

communitiesimpactedbytheproject,itrunstheriskofperpetuatingtwocentralchallengesthatweare

workingtoovercome:theneedtoapplylessonslearnedfromoneprojecttoanotherandtheneedtobuild

amoreintegratedtransitnetwork.>

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> Specialized procurement and delivery entities that deliver multiple projects or a related program of

projects:Someorganizationshavenarrowmandatestoprovideprocurementandconstructionexpertise

formanyprojects.Typically,theseorganizationsaresetupasawaytoensurethatpublicfundsareused

responsiblyanddelivergoodvalueforthemoney.InfrastructureOntarioisonesuchexample,asitdelivers

projectsacrossmanyinfrastructuresectors.Theagencyaccruesexpertisefromprojecttoprojectand

becomesanattractiveplacetoworkbecauseitdeliversmany(ofteniconic)projects,sinceitdoesnot

sunsetafterthecompletionofasingleproject.Importantly,thesekindsofentitiesaretypicallyusedfor

largecapitalprogramsthatcouldbestbeunderstoodasmultiple,relatedmegaprojects.

Avariantonthismodelisanorganizationthatmanagesprocurementandconstructionbutalso

managesplanninganddesign.Thistypeofhorizontallyintegratedorganizationisacommonmodelused

todeliverstations,newraillinesandstationarearedevelopmentinGermanyandFrance.Someexamples

includeEuralille,theSociétéduGrandParisandCrossrailLtd.Weexplorethesemodelsingreaterdepthin

ourcompanionpaperInfrastructure Bay Area: A proposal for successful delivery of transformative transit

projects (spur.org/IBA).

Upshot: ThiswhitepaperrecommendsthattheBayAreaestablishasophisticatedprojectdeliveryentity

thatprocuresandconstructstheregion’smostsignificanttransitprojects.Thisnewentitywouldhave

ahighlevelofprojectdeliveryexpertiseonstaffandontheboard,andthisexpertisewouldgrowover

timebydeliveringprojectafterproject.WhileInfrastructureBayAreashouldbeinvolvedintheplanning

processinanintegratedprojectmanagementteam,itisunlikelythattransitagencieswillbefullywillingto

cededecision-makingauthorityandplanningdecisionstoanotherentity.

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Recommendation 6Establish Infrastructure Bay Area, a project delivery entity responsible for the successful delivery of the region’s most significant megaprojects.

Who’s responsible: California legislature, governor of California, transit agencies

Basedonourresearchintoprojectdeliverymethodsusedaroundtheworld(seesidebar“ProjectDelivery

OrganizationsAroundtheWorld”onpage30),SPURrecommendsestablishingInfrastructureBayArea(IBA),

ahighlyspecializedregionalgovernmententitythatwouldcentralizeandleadtheprocurementanddelivery

ofmajortransitprojectsthatarealsohigh-valueandhigh-risk.Specifically,IBAwouldbethedefaultproject

deliveryentityforprojectsthatareestimatedtocostover$1billionandareconsideredtobe“regionally

significant.”Regionallysignificantprojectsincludethosethatprovideabackboneconnectionbetweenmajor

areasofeconomicactivityintheregionandthestate,thatshapeurbanformandcreatesignificantnew

opportunitiesforgrowth,orareacriticalpieceofinfrastructurewhosedesignaffectsthefunctioningofthe

regionaltransitnetwork.Thiswouldinclude,butnotbelimitedto,multimodalstationswheremanyservices

integrateandmajorcapacityimprovementstoregionalservicesthatcarryalargeproportionoftheBayArea’s

riders.Likesimilarorganizationsaroundtheworld,IBAwouldbedrivenbyagoalofdeliveringlong-termvalue

forthemoneytothepublic.

Thecreationofamajornewgovernmentalentityisasignificantundertaking,andwedonotsuggest

itlightly.BelowwedescribethebenefitsofestablishingIBA.Wedelvemuchfurtherintothisideainour

companionpaperInfrastructure Bay Area: A proposal for successful delivery of transformative transit projects

(spur.org/IBA).ThereweshareaproposalforIBA’smandate,definerolesandresponsibilities,providecase

studiesofsimilarorganizationsaroundtheworldandoutlinekeyfactorstoconsiderforsuccessfulorganizational

structureanddesign.

Benefits of Infrastructure Bay Area

Asingleentitythatdeliversaportfolioofprojectsacrosstheregionwouldbeuniquelyableto:

> Learnandaccrue expertisefromoneprojecttoanother.

> Creategreaterinteroperabilityacrossprojectsandaccelerateprogresstowardaseamlesstransitnetwork.

> Sequenceconstructionprojectstoachievecostefficienciesandsynergieswithotherprojectsorgoals.

> Createanorganizationalstructureandoperationalgovernancemodelthatisoptimizedforprojectdelivery.

.

> Aligntheaccountabilityforcost,scheduleandriskwithapublic-sectorentitythathasamandateto

delivergoodvalueforthemoneytothepublic.

> Bringacomprehensiveandconsistentapproachtoprojectmanagementandprojectcontrols.

> Nurtureandmonitormarketconditionsfortheinteractionofdifferentprocurementsatanygiventimeand

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notehowtheyaffectthedeliveryofeachproject.

> Adviseonregionalandstatewideworkforcedevelopmentandmobilizationneeds.

Ifwecontinuetoplananddeliverprojectsthewaywealwayshave,eachtransitagencywillcontinuetomake

“firsttimer”mistakeswitheveryproject,withminimaloversightandaccountabilitytothepublic.Eachagency

willpersistinsolvingsimilarproblemsindependently,inventnewpracticesforestimatingcostsandcontrolling

projectrisksseparately,purchaseprojectmanagementplatformsandtechnologiesindependently,compete

againsteachotherfortalent,confrontrulesaboutprocurementonebyone,andseekspecialexemptionsand

authoritiesindividually.CentralizingprojectdeliveryinoneentitycanhelptheBayAreaovercomemanyofthese

challenges.

SeeourcompanionpaperInfrastructure Bay Area: A proposal for successful delivery of transformative transit

projects (spur.org/IBA)forourcompleterecommendationsforestablishingthisnewentity.

Recommendation 7Give Infrastructure Bay Area the ability to use nontraditional project delivery approaches.

Who’s responsible: California legislature

SPURrecommendsthatIBAbegivenbroadauthoritytoenterintocontractsforavarietyofprojectdelivery

methodsandtoconsiderqualificationsthatofferthebestvaluetothepublic,notonlythelowestcost.Large

projectsresistatemplateapproach.Therefore,IBAmusthavetheabilitytochoosetherightdeliveryapproach

fortheproject(andfordifferentcomponentsoftheproject).IBAshouldnotbelimitedtotraditionaldesign-

buildordesign-bid-buildmodels(see“ProjectDeliveryModels”sidebaronpage34).

Californiahasbeenslowtoallownontraditionaldeliverymodelsforpublicinfrastructure.48Whenagencies

arepermittedtousenontraditionalmodels,theyreceivethatauthorityonacase-by-casebasisthroughdiscrete

legislation.Thiswouldbeimpracticalforanagencychargedwithdeliveringalargenumberofprojects.Instead,

IBAshouldbeabletouseawiderangeofnontraditionalprojectdeliveryapproaches,anditsauthoritiescould

mirrorthebroadprocurementauthoritiesofotherpublicagenciessuchasVTA,theCaliforniaHigh-SpeedRail

AuthorityortheUniversityofCalifornia.

48 BayAreaCouncilEconomicInstitute,Public-Private Partnership in California: How Governments Can Innovate, Attract Investment, and Improve Infrastructure Performance,

August2018,http://www.bayareaeconomy.org/files/pdf/P3inCaliforniaWeb.pdf

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Project Delivery Models

InfrastructureBayAreashouldbeauthorizedtouseavarietyofprojectdeliveryoptions,includingbutnot

limitedto:

> Design-Bid-Build:Theprojectsponsorhirestwoseparateentities,onefordesignandoneforconstruction,

withseparatecontractsandresponsibilities.Thisisthemosttraditionalprojectdeliveryapproach.

> Design-Build:Theprojectsponsorhiresoneentityforboththedesignandconstructionoftheproject.The

design-buildcontractorassumesresponsibilityforthemajorityofthedesignworkandallconstruction

activities,togetherwiththerisksassociatedwithprovidingtheseservices,forafixedfee.Theproject

sponsorretainsresponsibilityforfinancing,operatingandmaintainingtheproject.

> ConstructionManager/GeneralContractor(alsoknownas“constructionmanageratrisk”):Theproject

sponsorhiresacontractortoactasaconsultantandprovidefeedbackonthedesignandconstructability

duringthedesignphase.Thisapproachbringstheprojectsponsor,thedesignerandthecontractor

togetherearlyonandenablestheprojectsponsortomorereadilycontrolconstructioncostsandfinal

plans.Costsavingsfromriskmitigationaccruetotheprojectsponsor.Consultingthecontractoratthe

beginningcanbeespeciallybeneficialinurbanareasoronprojectswithhighlysensitiveschedules.

> Design-Build-Finance:Theprojectsponsorawardsasinglecontractforthedesign,constructionandfull

orpartialfinancingofaproject.Thedesign-builderassumesresponsibilityforthemajorityofthedesign

work,allconstructionactivitiesandtheshort-termfinancingforalloraportionoftheproject,together

withtheriskofprovidingtheseservices,forafixedfee.Responsibilityforthelong-termmaintenanceand

operationofthefacilityremainswiththeprojectsponsor.

> Design-Build-Finance-Operate-Maintain:Theresponsibilitiesfordesigning,building,financingand

operatingarebundledtogetherandtransferredtoprivate-sectorpartners.Thisisbeneficialwhenthe

projectsponsordoesnothavethecapacitytooperateandmaintaintheinfrastructureorprefersto

transfermostofthelife-cyclecostsoftheprojecttotheprivatesector.

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Recommendation 8Allow Infrastructure Bay Area to select a bidder on the basis of the best value rather than cost.

Who’s responsible: California legislature, governor of California

TransitagenciesinCaliforniamustchoosethelowestresponsiblebidderthatrespondstotherequestfor

proposals,butasdiscussedintheBigIdea2“Challenges”sectionabove,thisdoesnotalwaysleadtothebest

outcomes.Greaterflexibilityinchoosingthird-partycontractors,combinedwithrigorousoversighttoensure

fairness,canhelpreduceuncertaintyandimprovequalityinprojectdelivery.InfrastructureBayAreacouldhave

morefreedomtochoosetherightteamforthejobifitwereabletoselectabidderonthebasisofthebest

value.“Bestvalue”referstoacontractingstrategythatallowsprojectsponsorstoconsidertheadditionalvaluea

contractorcanofferinadditiontothebidprice,suchasthecontractor’strackrecordofon-timedelivery,safety

record,laborcomplianceandexperience.

ThereareexamplesofprojectsandpublicagenciesinCaliforniathathavebeenpermittedtousebest-

valueprocurementforspecificprojects,suchastheUniversityofCalifornia49(untilthelawsunsettedin2015),

VTAandCaltrans(untilthelawsunsettedin2014).ThislevelofflexibilityshouldbeextendedtoInfrastructure

BayAreatobenefitmultipleprojects.Thisrecommendationisbestsuitedtoprojectsthatarefundedentirely

withstate,regionalandlocaldollars,asfederallawsalsolimitagencies’abilitytoconsiderbest-valuecriteriain

procurement.

Summary

SPURdoesnotrecommendnewinstitutionslightly.However,theBayAreaneedsanorganizationthatcanbring

specializedprojectdeliveryexperienceandaportfolio-scaleapproachtobuildingtheregion’smostimportant

transitprojectsmorequicklyandcost-effectively.Thisisanideathatcan’twait:InfrastructureBayAreacan

begintodelivervalueimmediatelybybringingexpertisetotheprojectsthatarebeingdesignedtoday.

49 UniversityofCaliforniaOfficeofthePresident,“BestValueConstructionContractingProgram,”https://www.ucop.edu/construction-services/programs-and-processes/best-

value/best-value-pilot-program.html

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Big Idea 3

Streamline environmental laws for projects that deliver significant environmental benefits. Evenwithgreaterprocurementanddeliveryexpertise,projectswillstillbesubjecttoCalifornia’suniquely

complexregulatoryenvironment,whichcontributestocostanddelay.Therecommendationsinthissection

largelyfocusoncreatingtargetedexemptionsandstreamliningundertheCaliforniaEnvironmentalQuality

Act(CEQA)toacceleratethedeliveryoftheBayArea’smostsustainabletransitandtransportationprojects,

enablinggreateraccess,affordabilityandhealthwhilemakingprogresstowardourclimategoals.

ChallengeCEQA can add significant uncertainty, cost and delay to projects.

CEQAisastatelawthatrequiresstateandlocalagenciestoidentifythesignificantenvironmentalimpacts

ofprojectstheyapproveandtoavoidormitigatethoseimpacts,iffeasible.50UnderCEQA,thepublicagency

responsibleforcarryingoutandapprovingtheproject(whichistypically,butnotalways,theprojectsponsor)

mustevaluatetheenvironmentalimpactsofaprojectandpreparefindingsaboutwhetherornottheproject

willhavesignificantimpactsontheenvironment.Thisevaluationisthebasisformanystateandlocalapprovals

neededtodelivertheproject.

Themostin-depthenvironmentaldocumentrequiredisanenvironmentalimpactreport(EIR),which

disclosesthesignificantenvironmentaleffectsofaprojectandidentifiesprojectalternativesandpossible

mitigationsfortheimpactstheprojectwillcause.ForprojectsthatmustcompleteanEIR—andmosttransit

projectsdo—thiscanbealengthyandcostlyprocess.Anecdotally,relativelysimpleanalyses,suchasthosethat

findaprojectwillnotneedtodeclareanyenvironmentalimpacts,cancoststensofthousandsofdollars,and

dependingonthetypeofproject,acompleteEIRcancostmillionsofdollars.

Additionally,eachstepoftheprocessissubjecttoappealsandlawsuitsthatcanincreaseprojectcostsand

createdelays.Appealscanregularlytakesixmonthstoresolve,andlawsuitscantakeyears.Lawsuitscanalso

impacttheeligibilityofaprojectforfederalgrants,puttingtheproject’sfundingatrisk.

50 CaliforniaDepartmentofFishandWildlife,“ASummaryoftheCaliforniaEnvironmentalQualityAct”,https://wildlife.ca.gov/Conservation/CEQA/Purpose

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ChallengeMisuse of the environmental review and permitting worsens the region’s racial and economic inequities.

PublicreactiontostreamliningorexemptingprojectsfromCEQAoftenincludesconcernthatdoingsowouldbe

inequitableorwouldperpetuateharmsagainstmarginalizedpeople,especiallypeopleofcolor.Thisobjection

assumesthatCEQAisequitable.YetCEQAhasoftenbeenusedasatooltoopposeanddelaycriticallyneeded

projects—eventhosethatwouldimproveairquality,improvesafetyandreducegreenhousegasemissionsin

thecommunitiesthatneeditmost.51AnanalysisofCEQAlawsuitsfiledbetween2010and2012foundthatthe

mostcommonlytargetedtypeofpublicinfrastructureprojectwastransitsystems.52

ThoughmanycommunitiesdouseCEQAlawsuitstoraisevalidenvironmentalconcerns,CEQAisfrequently

invokedtoobstructprojectsforreasonsthathavenothingtodowiththeenvironment,consequentlyeroding

environmentalqualityandcommunityhealth.53,54Asexplanedinthesidebar“HowPoorProjectDelivery

PerpetuatesInequity”onpage9,anindividualusedCEQAtoholduptheconstructionofbikelanesinSan

Franciscoforfouryears.Duringthatsametimeperiod,ninepeoplewerekilledandmorethan2,000peoplewere

injuredwhileridingtheirbikesinthecity.55Atthetimeofthiswriting,thesamepersonisappealingthecity’s

SlowandSafeStreetsprogram,56acornerstoneofthecity’sCOVID-19recoveryplanthatenablespeopletotravel

atsafesocialdistancesduringthepandemic.Theseappealsandlawsuitsarenotbeingbroughtonthebasisof

airqualityorwaterqualityorothervalidenvironmentalimpacts,butratheroverthelossofparkingspacesand

impactsontrafficcongestion.

Evenappealsandlawsuitsthatdonotholdupincourtstilladdtimeandcosttoprojects.Asmentioned

earlier,theEastBayBusRapidTransitproject,whichwasintendedtospanfromBerkeleytoSanLeandro,

wassignificantlyreducedafterabusinessownerinBerkeleythreatenedtosueoverparkinglosses.Cutting

theprojectbacksignificantlyreducedtransitaccessforsomeofthemostraciallyandeconomicallydiverse

neighborhoodsintheEastBay.

ThoughsomearguethatexemptingprojectsfromCEQAperpetuatesinequities,underinvestmentin

sustainabletransportationprojectsthatimproveaccessandaffordabilityandcommunityhealthisalso

inequitable.Forexample,alackofhigh-qualitytransitmakescommunitiesacrossCaliforniamorereliantoncars,

whichincreasescongestionandpollution.Butitispeopleofcolorandlow-incomepopulationswhoshoulder

adisproportionateburdenofairpollutionfromvehiclesandwhoconsequentlyexperiencehigherratesof

51 JenniferHernandez,DavidFriedmanandStephanieDeHerrera,“IntheNameoftheEnvironment:HowLitigationAbuseUndertheCaliforniaEnvironmentalQualityAct

UnderminesCalifornia’sEnvironmental,SocialEquityandEconomicPriorities—andProposedReformstoProtecttheEnvironmentfromCEQALitigationAbuse,”Holland&

KnightLLC,2015,https://issuu.com/hollandknight/docs/ceqa_litigation_abuseissuu/102

52 Ibid.

53 ErinBaldassari,“BARTtoSanJose:SharksSueOverDowntownExtension,”San Jose Mercury News,May3,2018,https://www.mercurynews.com/2018/05/03/bart-to-san-jose-

sharks-sue-over-downtown-extension/

54 BobStaedler,“WhattoDoWhenNeighboringCitiesBecomeEnemies,”Silicon Valley Business Journal,June29,2018,https://www.bizjournals.com/sanjose/news/2018/06/29/

bob-staedler-silicon-valley-synergy-land-use-ceqa.html

55 BasedonaqueryofbicyclecollisionswithinthecityofSanFranciscobetweenJanuary1,2006,andDecember31,2010,whicharetheyearsthatthebicycleplanwasin

litigation.See:https://transbase.sfgov.org/dashboard/dashboard.php

56 https://sfplanning.org/resource/ceqa-exemptions(Record2020-005472ENV)

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asthma57,58,59andotherhealthconditions,trafficinjuriesanddeath.60

ThoughCEQAisintendedasadisclosuretooltoprotecttheenvironment,itisoftencounterproductiveto

today’spressingenvironmentalissuesinwaysthataredisproportionatelyharmfultocommunitiesofcolorand

low-incomecommunities.

Asdescribedabove,CEQAappealsandlawsuitsfrequentlyhaveinequitableresults.Despitesometimes

yieldinginequitableoutcomes,CEQAissometimesperceivedasenablinganequitableprocess. Fordecades,

marginalizedcommunitieshavenotbeenadequatelyengagedinprojectplanning,andmanytransportation

projectshaveleftdeepscarsthroughneighborhoods.BecauseCEQAisalegallymandatedprocess,and

becauselitigationisapowerfultooltoholdbadactorsaccountable(whichotherplanningprocessesdonotdo),

effortstoreformCEQAalsoneedtoaddressthislegacyofprocessdisempowerment.Ourrecommendationsfor

addressingthislegacycanbefoundinRecommendation10.

Environmental Review for Transit and Sustainable Transportation in Other Countries

Inothercountries,transitandsustainabletransitprojectsarecommonlypresumedtohaveanetpositive

environmentalimpactbyreducingdrivingandgreenhousegasemissions.InCanada,mostpublictransit

projectsdonothavetocompleteafullenvironmentalassessmentandinsteadcanuseanabridged

environmentalreview,whichtakesapproximatelysixmonthstocomplete.61InGermany,theregional

transitcoordinatorandtransitoperatorscanself-certifytheenvironmentalreviewformosttransit

projects.62Thesearespecialprocessesthatexpediteprojectsbecausethegovernmentrecognizesthe

criticalimportanceoftransitinfrastructuretotheenvironmentandtheeconomy.

Incontrast,projectsinCaliforniamustperformtwolayersofenvironmentalreview.Projectsponsors

arerequiredtocomplywithCEQAandtocompletearelatedbutsomewhatdifferentenvironmental

impactstatement(EIS)undertheNationalEnvironmentalPolicyAct(NEPA)iftheprojectreceives

federalfundingorrequiresafederalpermit.

57 UnionofConcernedScientists,Inequitable Exposure to Air Pollution from Vehicles in California,January28,2019,https://www.ucsusa.org/resources/inequitable-exposure-air-

pollution-vehicles-california-2019

58 EnvironmentalDefenseFund,“AirPollutionandHealthinEastOakland,”https://www.edf.org/airqualitymaps/oakland/air-pollution-and-health-east-oakland

59 BayAreaRegionalHealthInequitiesInitiative(BARHII),Health Inequities in the Bay Area,https://www.barhii.org/health-inequities-in-the-bay

60 SmartGrowthAmerica,“DangerousbyDesign,”2019,https://smartgrowthamerica.org/dangerous-by-design/

61 OntarioMinistryoftheEnvironment,ConservationandParks,“GuidetoEnvironmentalAssessmentRequirementsforTransitProjects,”January2014,https://www.ontario.ca/

page/guide-environmental-assessment-requirements-transit-projects#section-3

62 InterviewwithGiselaGrafinvonShlieffen,August8,2019.

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ChallengeThe environmental review process is improperly used as a planning process.

TheCaliforniaCodeofRegulationsencouragesanEIRtobecombinedwithplanning,reviewandproject

approvalsprocesses.63Butinmanycases,theCEQAprocessisusedtosufficeforaplanningprocess.Though

theenvironmentalreviewprocessshouldbeusedtodiscloseandinformthepublicofpotentiallysignificant

environmentalimpacts,itisproblematicwhenitisusedastheprimarywaytosetgoalsandanalyzealternative

projectscopesanddesigns.Inmanyplaceswithmorerobustaccountabilityandoversightstructuresforproject

delivery,suchastheU.K.,CanadaandAustralia,alternativesareanalyzedthroughbusinesscases.

Anenvironmentalimpactreviewisalsoapoorsubstituteformeaningfulandproactivepublicparticipation.

Whenmembersofthepublicusethepubliccommentperiodtoproposeanewalternativeorclarifytheir

priorities,itisoftenlateintheenvironmentalreviewprocess,afterapublicagencyhasalreadyinvestedmillions

ofdollarsandseveralyears.Atthispoint,theagencymaybereluctanttostudynewoptions,aspursuingfurther

studycreatesadditionaldelaysandincreasescosts.Amoreeffectivewayforaprojectsponsortoengagepeople

istoinitiateapublicprocesswhenitpreparesitsbusinesscase.Thisearlyengagementprovidesopportunities

forcommunitiestoshapetheprojectgoalsandtheconceptsforfurtherdevelopmentattheprojectoutset.

Recommendation 9Establish a statewide certification process for major transit projects over $1 billion that would reduce uncertainty and undue delay and cost in exchange for adopting best practices in project delivery.

Who’s responsible: California legislature, governor of California, cities

SPURrecommendsthatthestateestablishacertificationprocessformajortransitprojectsover$1billion

(“megaprojects”)—particularlythosethathavecriticalsignificancetotheregionalandstatewidetransportation

networkandthatoffersignificantenvironmentalbenefits,suchasintermodalstations,theelectrificationofrail

linesornewdedicatedfixed-routerailandbuscorridors.

Acertificationprocesswouldrecognizetheimportantrolethattheseprojectsplaywithinthetransportation

networkandinreachingtheregion’spolicygoals,aswellastheuniquecharacteristicsofmegaprojectsthat

makethemextremelydifficulttodeliverontimeandonbudget.Inotherwords,thecertificationwouldbe

designedasanincentivetocontrolcostsandscope.

63 CaliforniaCodeofRegulations,14CAADC§15080,https://govt.westlaw.com/calregs/Document/

IA5BFBA20D48811DEBC02831C6D6C108E?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)

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Common Challenges for Megaprojects: The 7 Cs

Megaprojects “tend to be colossal, costly, captivating, controversial and complex. They are laden

with issues of control over financing, design and project development because multiple layers of key

actors must interact across many sectors, public and private. As a result, they also are in need of much

communication between key actors, the media and the public as there often is lack of transparency and

accountability built into processes. These characteristics in combination complicate project timelines, cost

estimates and other outcomes in the public’s interest.”

—KARENTRAPENBERGFRICK

Remaking the San Francisco–Oakland Bay Bridge: A Case of Shadowboxing with Nature64

Acertificationprocesscouldalsobealeverforimplementingadditionalprojectdeliveryorsustainable

developmentbestpractices.Thegovernorcouldrequireaprojectsponsortocompleteanindependentpeer

review,developatransit-orientedstationareaplanthatmaximizessustainablegrowthandcreateastation

accessstrategythatpromoteswalking,bikingandtransituse.

Thecertificationisanincentivetocontrolcostswhilealsoprovidingcriticalregulatorystreamliningand

accesstocapital.Someofthebenefitsofcertificationcouldinclude:

> Shortening the judicial review period for appeals related to CEQA or the granting of project approvals to

270 days.SPURrecommendsshorteningthejudicialreviewperiodforCEQA-relatedappeals.Appeals

shouldberesolvedwithin270daysoffilingthecertifiedrecordofproceedingswiththecourt.Reducing

thejudicialreviewperiodtoninemonthsrepresentsasignificanttimesavingsfortheprojectwhile

preservingtheintegrityofCEQA.Thereisalreadyprecedentfortruncatedjudicialreviewin2011’sJobs

andEconomicImprovementThroughEnvironmentalLeadershipAct(AB900).

> Reducing some of the impacts that must be analyzed under CEQA. Thereisprecedentforthisin2018’s

TransportationImpactsBill(SB743),whichlowersthenumberofimpactsthatmustbeanalyzedunder

CEQAforinfillhousingprojects.

> Providing priority access to low-cost or no-cost capital. Thereisoftenalargediscrepancybetweeninitial

costestimatesandactualcostsbecauseprojectstakesolongtofundandtogetunderway,andthecosts

increaseyearoveryear. Insteadofspreadingoutstatefundingsothatitdoesnotmeaningfullyadvance

anyproject,investmentsshouldbeprioritized.

> The use of, and funding for, advanced mitigation credit agreements. In2017,MTCcreatedaRegional

AdvanceMitigationProgram(RAMP)fortransportationprojectstomitigatetheirpotentialenvironmental

impacts.ThisisavaluabletoolforprojectdeliveryandforconservingandadaptingtheBayshoreline.

64 Seenote12.

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AgenciesthatparticipateinRAMPcanreceiveamitigationcreditwiththeCaliforniaDepartmentofFish

andWildlife.However,RAMPisunfundedandthereforedoesnothavelandtobank,soagenciescannot

purchasecredits.OnebenefitcouldincludeadditionalstatefundingformitigationthroughRAMP.

Recommendation 10Give statutory exemptions to bus rapid transit, bicycle enhancement projects and pedestrian improvements.

Who’s responsible: California legislature, Governor’s Office of Planning and Research

AstatutoryexemptionwhollyexcludesaprojectfromCEQA,meaningthattheprojectdoesnotneedto

completeanEIRandisnotsubjecttolitigationrisk.SPURbelievesthatsomeprojectshavesuchsignificant

environmental,health,safetyandequitybenefitsandaresocriticaltolocalandregionalmobilityneedsthatthey

shouldbeexpedited.Theseprojects—includingbusrapidtransit,bikeinfrastructure,completestreetsandother

pedestrianimprovements—areexcellentcandidatesforstatutoryexemptions.

Ph

oto

byS

erg

ioR

uiz

Bus rapid transit projects, bicycle facilities

and pedestrian safety projects are often the

target of appeals and lawsuits under CEQA,

despite delivering significant environmental

and community health benefits, such as better

air quality.

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Thoughtheconstructionoftheseprojectsmayhavenear-termenvironmentalimpactsintheircommunities,

theirlong-termenvironmental,healthandequitybenefitstothecommunityareoftenmuchgreaterthanthe

short-termimpacts.Additionally,manyarelocatedinurbanareaswheretherearefewerimpactstobiodiversity

and/orfewermitigationopportunities.

WebelievethefollowingtypesofprojectsshouldreceivestatutoryexemptionsfromCEQA:

> Anyprojectinanurbanizedareathatimplementsorincreaseshigh-occupancybusserviceorbusrapid

transitondedicatedlanes,aswellasnewtransitprioritizationprojectsandfacilitiesthatincreasespeed

andreliabilityonanexistingright-of-way,whetherornottheright-of-wayiscurrentlyusedfortransit.

> Anyclassificationofbicyclewaysonexistingpublicrights-of-way,includingbutnotlimitedtobicycle

routes,bicyclelanes,bicycleboulevardsandcycletracks.

> Thecreationofnewfacilitiesthatsupportwalkingandstreetsafety,includingbutnotlimitedtosidewalks,

trails,intersectiontreatments,signageandmarking.

InkeepingwithCEQA’sintentbothtosafeguardtheenvironmentandtogivepeopletheabilitytovoicetheir

concernsaboutprojectsontherecord,weproposeasetofguardrailsthatprojectsmustadheretoiftheyareto

receiveastatutoryexemption:

> Theprojectsponsormustbeapublicagency.

> Theprojectsponsormusthaveundertakenapublicprocessduringearlyplanningstagespriortoseekinga

statutoryexemptionasdescribedbelow.

> Theprojectmustbelocatedinanurbanizedarea,wheretheretendtobefewerenvironmentalimpactsto

biodiversity.

> Projectsover$100millionmustbeincludedinaregionalsustainablecommunitiesstrategyorotherplan

thathascompliedwithCEQAataprogrammaticlevel.

> Theprojectmustnotaddanyautomobilecapacity,toavoidincreasingautouseandgreenhousegas

emissions.

> Theprojectmustnotdemolishaffordablehousing.

> Theprojectmustnothaveanimpactonendangeredspecies.

BecauseCEQAisawaytogivecommunitiesavoiceinprojects,policiesforstreamliningandexempting

transportationprojectsshouldexplicitlybedesignedtoovercomeprocessdisempowermentandensure

community-leddecision-making.Asdescribedabove,webelievethatcommunityparticipationoftencomestoo

lateinCEQA,oristoonarrowlyconfinedtoenvironmentalissuesintheearlyscopingphase—ratherthanon

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criticalconcernsaroundracialimpactsanddisplacement.Somewaystoensurecommunity-leddecision-making

include:

> Requiringthattheleadagencyorprojectsponsorcompleteapublicplanningprocesstoshapetheproject

goalsandalternativespriortofilinganoticeofexemptionoranapplicationforstreamlining

> Requiringthattheleadagencyorprojectsponsorcompletearacialequityanalysistounderstand

disproportionatebenefitsandburdensandrecommendmitigations

> Requiringthattheleadagencyorprojectsponsorcreateaconstructionmitigationprogramandhold

publicmeetingswithimpactedcommunitiesthroughoutconstruction.

> Requiringthattheleadagencyorprojectsponsorprovidedocumentationthattheprojecthasoffered

opportunitiesforimpactedcommunitiestobeheardandthattheseopportunitieswereaccessible,

culturallycompetentandlinguisticallyappropriate.

Summary

ThoughCEQAisnottheonlysourceofprojectdeliverychallenges,itisonethatnearlyeverytransitand

sustainabletransportationprojectencounters.Creatingtargetednewexemptionsandstreamliningwillallow

projectsthatsignificantlybenefittheenvironment,equityandhealthtobedeliveredmorequicklyandcost-

effectively.

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Appendix AProject Costs

Figure6showsthemagnitudewithwhichprojectcostestimatescanchangefromthetimethataninitialorearly

publiccommitmentismade.Thefigureisbasedonprojectcostestimatedatatakenatthreedifferentpointsina

project’slifecycleforahandfulofrecentlycompletedandongoingrailandtransitprojectsintheBayArea.This

appendixdiscusseshowtointerpretthesedatapoints,explainsourmethodologyandprovidessourcesforeach

datapoint.

Importation Cautions

1. Thischartshouldnotbeusedtocompareprojectstoeachotherortocompareagencyperformance

relativetootheragencies.Eachprojectisunique.

2. Thischartcanbeusedtogetahigh-levelsenseofthemagnitudewithwhichprojectcostestimatescan

changefromthetimethataninitialorearlypubliccommitmentismade.

3. Changesincostshouldnotbeinterpretedasmalfeasance.Costdifferencesoftenreflecttheevolutionand

refinementofaprojectasitmovesbeyonditsmostconceptualstagethroughthedesignandengineering

process.

4. Thelackofconsistentcostestimationpracticesmakesitdifficulttoderivepreciseconclusionsaboutany

givenprojectortomakesweepingconclusionsaboutthesetofprojects.

Key Takeaways

Takeaway 1:

Project sponsors in the Bay Area consistently underestimate how much projects will cost.Comparingtheearly

estimateswithadvancedestimatesgivesanindicationofhowmuchprojectcostestimatescanchangebetween

thetimethataninitialorearlypubliccommitmentismadeandwhenaproject’sdesigncomesintofocus.

Thoughitisnotpossibletopinpointthespecificreasonswhyprojectcostsescalateusingthesedatapoints,this

graphicshowshowBayAreatransitagenciesareconsistentlytoooptimisticintheirearlyestimatesofproject

costs.Thedangerinoverlyoptimisticearlyestimatesisthattransitleaders,andthepublic,makecommitments

toprojectsbasedonincompleteandgenerallyinaccurateinformation.Bythetimeaprojectisfinished,thecosts

mayhaveincreasedsomuchthatitisunlikelytheprojectwouldhavebeenselectedhadrealisticcost-benefit

metricsbeenavailableattheoutset.

Takeaway 2:

A significant amount of cost escalation happens simply because projects take so long. Projectsoftenfacea

viciouscycle:Thehighertheinitialcost,thelongerittakestofundthem.Thelongerittakestofundthem,the

moretheprojectcostsgrow.Projectcoststendtoincreaseonanannualbasisbasedonchangesinconstruction

MORE FOR LESS 45

costs(e.g.,laborandmaterials),whichcanrangefrom3%to5%peryearonaverage.Whenaprojectisdelayed,

thecostsinevitablygoup.Shiftingtimelineshaveaccountedforupto30%ofaproject’stotalcost.

Insomecases,thecostescalation—includingbothannualconstructionincreasesandchangesdueto

otherfactors—isalmostdoubletheproject’sinitialcost.Marketconditionsmayalsochangealongwithshifting

timelines.Whenthemarketisslow,competitionforpublicprojectsmaybemuchhigherandbidsmaybelower,

andviceversa.

Together,thesetakeawayssuggesthowvulnerabletransitagenciesaretotheoptimismbiasand

underscorestheimportanceofhavingabusinesscasewithcomprehensivecostestimatesthatusereference

classforecastingpriortomakingpoliticalorfinancialcommitmentstoaproject.

Comparingtheadvancedestimateswiththelatestestimatesoractualexpendituresgivesanindication

ofhowmuchprojectcostestimatescanchangefromtheenvironmentalreviewphasetoprocurementand

construction.Thefindingsshowlargecostescalationsasprojectsmoveintofinaldesignandengineering,

procurementandconstruction—underscoringtheimportanceofprojectdeliveryimprovements,inadditionto

havingmorerobustplanningandoversightprocesses.Itisnotpossibletopinpointasinglecauseforthecost

escalation.Thecostescalationscanrepresentanumberoffactors,includingbutnotlimitedtorefinementsto

thedesign(mostprojectshaveonly20%oftheirdesigncompletedattheenvironmentalreviewstage),the

incorporationoftransactionandfinancecosts,changesinlaborcostsandmaterials,hurdlesintheconstruction

phase,mismanagementorotherissues.

Point-in-Time Cost Estimate Data

“Earlyestimates”describecostestimatesthatoccurearlyinaproject’slifecycleandbeforeaprojectis

designed.Theseearlycostestimatesaretypicallyusedtogarnerinitialfinancialcommitmentsandpoliticalor

publicsupport,eitherthroughaballotmeasure,acountytransportationplanoraregionaltransportationplan.

“Advancedestimates”describecostestimatesthatoccurwhenaprojecthascompletedsomeportionof

designbuthasnotenteredintoprocurement.Typically,advancedestimatescomefromenvironmentalimpact

statements(EIS)andenvironmentalimpactreports(EIR).

“Latestestimates”or“actualexpendituresestimates”describethemostrecentavailableinformation.Actual

finalcostsareusediftheprojectiscomplete.Iftheprojectisnotcomplete,thelatestestimaterepresentsa

recentandpubliclyavailablecostestimate.SomeofthesecomefromasupplementalEISandEIR,construction

updatesortheprojectsponsor’sboardmeetings.

Allsourcesarecitedbelow.

How to Interpret This Chart

AllprojectslistedinFigure6aremeasuredagainstatotal:100%,whichreferstotheinitialprojectcostplus

annualconstructioncostincreases.

Onereasonprojectcostsincreaseisbecausetheprojecttimelinechanges.Wesoughttoanswerthe

question:Howmuchoftheadvancedorlatest/finalcostestimatesmightbeattributabletoannualconstruction

costincreases?Understandingthisannualcostescalationhelpsusisolatesomeofthechangesthatmightbe

duetoscopechangesorproblemsduringdesignandconstruction,whicharepartiallypreventablewiththe

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appropriateplanning,procurementflexibility,oversightandmanagementtypes,asdescribedinthispaper.

Inotherwords,100%isthecostoftheprojectwithoutanyotherpossiblypreventable“changesduetoother

factors.”

Example: The initial cost estimates for SMART were approximately 70% of the latest estimates. Another 30%

of the project cost can be attributed to annual construction cost escalations.

Changesduetootherfactorsaredisplayedasaprojectcostexceeding100%.Changesduetoother

factorscouldincludeproblemsduringconstruction,suchasalargenumberofchangeordersorproblemswith

utilityrelocation.Changesduetootherfactorscouldalsobescopechangessuchaschangesintechnology

ortunnelingmethodortheadditionorreductionofastation.Forexample,theCentralSubway’searlycost

estimateshadtheprojectfollowinganentirelydifferentroutethanitcurrentlyfollows(ThirdStreetinsteadof

FourthStreet).

Example: For the Oakland Airport Connector, there was a 59% increase in project costs above initial cost

estimates and annual construction cost escalation.

Methods

Step1:SPURreliedonpublicdocumentsgeneratedbytheprojectsponsorsortheirpartnerstoidentifyproject

costs.SPURverifiedthattheestimatescorrespondedwiththeappropriatepointinaproject’slifecycle(early,

advanced,latest/actual).Costsrepresentcapitalcosts.Fleetcostswereexcluded.

Step2:Westandardizedcoststotheextentpractical.Projectcostsarenotestimatedandreportedacross

agenciesinaconsistentmanner.Forexample,someagenciesreportcostestimatesasbase-yearexpenditures,

andothersreportthemintheyearofexpenditure.Forthosethatreportintheyearofexpenditure,thereare

manydifferentcostescalationratesused.Some“advanced”estimatesareatlessthan10%design,whereassome

arecloserto30%design.Thelackofconsistentcostestimationpracticesmakesitdifficulttoderiveprecise

conclusionsaboutanygivenprojectorsweepingconclusionsabouttheprojectsasawhole.(Thisshouldbea

considerationforMTCindevelopingprojectbusinesscaseguidelinesanditsprojectoversightrole.)

Ifcostsweregivenasbaseyearbutthebaseyearwasnotstated,thebaseyearwasassumedtobethe

yearofcompletionforthepublicdocumentthatcontainedthepublishedcost.Forinstance,ifthedocument

waspublishedin2006,weassumedthebaseyeartobe2006.Weadjustedcostestimatestothemidpoint

ofconstructionbasedonannualconstructioncostescalationfactors,forthereasonsdescribedabove.We

appliedastandardannualescalationrateof3.5%toinitialcostestimates,unlesstheagencyspecifiedadifferent

escalationrateforaproject(e.g.,theDowntownExtensionprojectuseda5%escalationrate).

Forestimatesthatwereprovidedintheyearofexpenditure,constructioncostswerealreadyinternalizedin

thecostestimateandthereforewerenotaccountedforseparately.However,adjustmentsweremadeifapublic

datasourceconfirmedashiftintheprojecttimelineandprovidedanewyearofexpenditureand/orconstruction

schedule.

Costswerefurtherstandardizedbyestimatingtheamountofincreaseduetoconstructioncosts,as

describedabove.

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Sources

SMART (Larkspur to Cloverdale)

EarlyEstimate $541,000,000Sonoma-MarinAreaRailTransitDistrictMeasureQBallot,2008,Table1,p.14,https://www.marincounty.org/-/media/files/departments/rv/elections/past/2008/nov/measureq.pdf

AdvancedEstimate $650,000,000Sonoma-Marin Area Rail Transit District 2014 Strategic Plan,pp.9–10,https://mtc.ca.gov/sites/default/files/SMART-2014-StrategicPlan-Final.pdf

LatestEstimate/ActualExpenditure

$791,000,000Sonoma-Marin Area Rail Transit District 2019 Strategic Plan,p.20,https://www.sonomamarintrain.org/sites/default/files/Financial%20Documents/2019%20Strategic%20Plan%20Final-Nov%202019.pdf

Note:CostestimatesforSMARTincludebothcapitalexpendituresfortheraillineandforthemulti-usepathway.

BART Extension — Warm Springs

EarlyEstimate $546,000,000AlamedaCountyTransportationCommission(ACTC),Alameda County’s 20-Year Trans-portation Expenditure Plan,July2000,https://www.alamedactc.org/funding/fund-sourc-es/measure-b/

AdvancedEstimate $890,000,000BART,“BARTBreaksGroundonWarmSpringsExtension,”September30,2009,https://www.bart.gov/news/articles/2009/news20090930a

LatestEstimate/ActualEx-penditure

$750,000,000BART,“WarmSpringsExtensionProjectOverview,”updatedSeptember2019,https://www.bart.gov/about/projects/wsx

Note:Latestestimate/actualexpenditureexcludesIrvingtonStation.

Silicon Valley BART Extension Phase I — Berryessa

EarlyEstimate$2,108,000,000

SantaClaraValleyTransportationAuthority(VTA),Final EIS Volume 1,Chapter9,“Finan-cialConsiderations,”2010,https://www.vta.org/sites/default/files/documents/09.0_Fi-nancial%2520Considerations.pdf

AdvancedEstimate $2,330,000,000VTA,BoardofDirectorsMeeting,December8,2011,Item29,http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=1549&Inline=True

LatestEstimate/ActualEx-penditure

$2,330,000,000

VTA,BoardofDirectorsMeeting,March5,2020,http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=2970&Inline=True

Asnotedinfigure6,VTAhasestimatedthatthisestimatewillbeofficiallyreducedby$45millionuponprojectclose-out.

Note:Earliestcostestimateisinthe2010EIRbecausetheSiliconValleyBARTextensionwassplitintotwophasesin2009.

MORE FOR LESS 48

Silicon Valley BART Extension Phase II — Santa Clara

EarlyEstimate $4,780,000,000

VTA,Chapter9,“FinancialConsiderations,”2018,https://www.vta.org/sites/default/files/documents/Chapter%25209_Financial%2520Consideration_feb20_2018.pdf

Thisfigureexplicitlyexcludesunallocatedcontingencyandfinancingcosts.Thesourcedocumentnotesthattheywillbeaddedtoprojectcostsatalaterdate.VTA,incoordinationwithfundingpartners,subsequentlyestablishedanunallocatedcon-tingencyof$262millionandfinancingcostsof$246million.Thisrepresents42%ofthe“changeduetootherfactors”category,asindicatedbytheblueandyellowhatchedareainFigure6.

AdvancedEstimate $5,600,000,000

VTA,“VTA’sBARTSiliconValleyPhaseIIExtensionProject,”September20,2019,https://www.vta.org/sites/default/files/2019-10/2019-09-20%20VTA%20Board%20Workshop%20Presentation_2SlidesPerPage_Reduced.pdf.Thisisbasedon2%designandexcludedfinancingandunallocatedcontingencies.

LatestEstimate/ActualExpenditure

$6,500,000

VTA,“VTAFirstAgencytoSubmitExpeditedFederalFundingRequestforBARTPhaseII”,https://www.vta.org/blog/vta-first-agency-submit-expedited-federal-funding-request-bart-phase-ii

VTAcitedanumberoftechnicalreasonsforcostincreases,includingthefollowing:•Slightlylargertunneldiametertoaccommodateoptimizedtrackarrangementand

seismicrequirements•Newinfrastructureattwomidtunnelfacilitieswhichnowincludeemergency

egressplatformstohelpmitigateBART’sconcernsonstackedconfiguration•28thStreet/LittlePortugalStationnowconfiguredasasideplatformcut-and-cov-

erstationbox•FurtherdataonutilitiesinYard,portalsandmid-tunnelfacilitiessomerequiring

relocations•AdditionalinformationonCBTCwhichwasnotavailableduringtheenvironmental

planningphase

Caltrain Electrification (San Francisco to Tamien)

EarlyEstimate $456,000,000

PeninsulaCorridorJointPowersBoard,Caltrain Electrification Program Draft Environmental Assessment/Environmental Impact Report,Chapter2,“ProjectDescription,”2004,http://www.caltrain.com/Assets/Peninsula+Rail+Program/Elec-trification+2025/EA-DEIR-04-2004/Chapter_2_WEB.pdf

AdvancedEstimate $785,000,000

PeninsulaCorridorJointPowersBoard,Caltrain Electrification Program Environ-mental Assessment/Final Environmental ImpactReport Volume 1,Chapter2,2009,p.48.https://www.caltrain.com/Assets/Peninsula+Rail+Program/Electrifica-tion+2025/Caltrain_Electrification_EA-FEIR_Vol-I_July_2009-WEB.pdf

LatestEstimate/ActualExpenditure

$1,316,000,000PeninsulaCorridorElectrificationProgram,January 2019Monthly Progress Report,January31,2019,http://www.caltrain.com/Assets/Caltrain+Modernization+Pro-gram/Documents/MPR/2019-01+January+2019+Monthly+Progress+Report.pdf

MORE FOR LESS 49

Central Subway

EarlyEstimate$994,000,000

Annual Report on New Starts: Proposed Allocation of Funds for Fiscal Year 2007.https://www.transit.dot.gov/funding/grant-programs/capital-invest-ments/annual-report-new-starts-proposed-allocations-funds

AdvancedEstimate $1,235,000,000SFMTA,Central Subway Project Final SEIS/SEIR Volume 1,2009,Table8-1,https://www.sfmta.com/sites/default/files/reports/2017/Central_Subway_Fi-nal_SEISSEIR_Volume_I_Part2.pdf

LatestEstimate/ActualExpenditure

$1,578,000,000SFMTA,Central Subway Monthly Progress Report,May2019,https://www.sfm-ta.com/sites/default/files/reports-and-documents/2019/06/2019_05_mpr.pdf

Note:Yearofexpenditureforlatestestimate/actualexpenditureisassumedtobe2016,roughlythemidpointofconstruction.

Transbay Transit Center

EarlyEstimate $1,185,000,000TransbayJointPowersAuthority,Draft Environmental Impact Statement/Environmental Impact Report,Chapter2,2002,https://tjpa.org/up-loads/2009/10/Chapter_2.pdf

AdvancedEstimate $1,754,000,000TransbayJointPowersAuthority,Final Environmental Impact Statement/Environmental Impact Report,Chapter6,2004,p.6-9,https://www.tjpa.org/uploads/2009/11/FEIS_Ch6.pdf

LatestEstimate/ActualExpen-diture

$2,200,000,000SanFranciscoCountyTransportationAuthority(SFCTA),“SalesforceTran-sitCenter,”https://www.sfcta.org/projects/salesforce-transit-center

International Boulevard Bus Rapid Transit/ East Bay Bus Rapid Transit

EarlyEstimate 190,000,000ACTC,Measure B Capital Program FY12/13 Strategic Plan,p.A-14,https://www.alamedactc.org/news-publications/expenditure-plans/

AdvancedEstimate 181,000,000ACTC,“EastBayBusRapidTransit,”MeasureBCapitalProgramFY13/14StrategicPlanFactSheet,June2018.

LatestEstimate/ActualExpenditure

217,000,000

ACTC,“EastBayBusRapidTransit,”June2018,http://alamedactc.org/wp-con-tent/uploads/2018/12/PN1193000_East_Bay_Bus_Rapid_Transit_BRT_20180604-1.pdf

MORE FOR LESS 50

Oakland Airport Connector

EarlyEstimate $130,000,000ACTC,20-Year Transportation Expenditure Plan,July2000,https://www.alamedactc.org/wp-content/uploads/2018/11/2000_MeasureB_Expendi-ture_Plan_v14-2.pdf

AdvancedEstimate $220,000,000BART,Final Environmental Impact Statement,March2002,p.S-5,TableS-1,https://www.bart.gov/sites/default/files/docs/OAC_FEIR-FEIS_Volume_1_Part_1.pdf

LatestEstimate/ActualExpenditure

$484,000,000ACTC,Measure B Capital Program FY12/13 Strategic Plan,p.A-6,www.alamedactc.org

Downtown Extension Project (DTX)

EarlyEstimate$2,303,000,000

MTC,Resolution3434,2001,https://mtc.ca.gov/sites/default/files/RES-3434.pdf

AdvancedEstimate $3,930,000,000SFCTA,Report of Expert Panel: Downtown Rail Extension (DTX) Program Review,October2019,https://www.sfcta.org/sites/default/files/2019-10/Final%20Report%20of%20Expert%20Panel_DTX%202019-10-07v1.pdf

LatestEstimate/ActualExpenditure

$6,000,000,000CityofSanFranciscoPlanningDepartment,Rail Alignment and Benefits (RAB) Study,May29,2018,https://default.sfplanning.org/Citywide/rail-yard_blvd/RAB_PublicMeeting_Presentation_052918.pdf

Note:AdvancedandlatestcostestimatesreflectthePennsylvaniaAvenuealignment

MORE FOR LESS 51

Van Ness BRT

Appendix BProject Timelines

Figures1through3showthetimelinesforseveralmajortransitprojectsintheBayArea.Thisappendixliststhe

sourcesforeachofthemilestonesdenotedinthetimelines.

MILESTONE DATE/YEAR DETAIL SOURCE COST SOURCE NOTES

ConceptStudy 1995https://archive.sfcta.org/geary-

corridor-bus-rapid-transit-faq

StudyasPartof

MarketOctavia

Plan

2001Initialstudiesaspartof

Market-Octaviaproject

https://www.sfchronicle.com/

bayarea/place/article/S-F-has-

startling-plan-for-Van-Ness-

Middle-2-2846877.php

FundingMeasure

Passed-PropK2003

PartofPropK-November

2003(investmentplan

approvedforballotby

BOSJuly2003)

https://www.sfmta.com/projects/

van-ness-improvement-project,

“VanNessAvenueHistory”

section

SFCTAFeasibility

StudyDec-06

https://www.sfcta.org/sites/

default/files/2019-02/Van%20

Ness%20BRTFeasibilityStudy_

Dec_2006.pdf

$62.5m

https://www.sfcta.org/sites/

default/files/2019-02/Van%20

Ness%20BRTFeasibilityStudy_

Dec_2006.pdf,p4-32

2005dollars

InitialFederal

FundingApprovalJan-08

https://www.sfchronicle.com/

bayarea/article/S-F-rapid-

bus-project-to-vie-for-U-S-

funds-3230467.php

Projected

OpeningDateNov-11

https://sf.streetsblog.

org/2013/07/11/van-ness-brt-

delayed-2-more-years-after-

caltrans-pushes-wider-car-lanes/

EIRStart Sep-07

https://archive.sfcta.org/sites/

default/files/content/Planning/

VanNess_BRT_EIR/VN%20

BRT%20NOP%209-12-07.pdf

EIRComplete Jul-13

https://archive.sfcta.org/sites/

default/files/content/Planning/

VanNessAvenueBusRapidTransit/

email/VanNessBRT_NOA_

FINAL_July2.pdf

$126m

https://www.sfcta.org/

sites/default/files/2019-02/

Van_Ness_BRT_Final_EIS_EIR_

Volume_I.pdf,pS-9

FTAROD 20-Dec-13https://www.sfmta.com/projects/

van-ness-improvement-project

FinalLegislative

Approval18-Nov-14

https://www.sfmta.com/projects/

van-ness-improvement-project

Groundbreaking 24-Oct-16

https://www.sfmta.com/project-

updates/construction-van-ness-

glance

Projected

OpeningDateDec-17

EstimateatcloseofEIR

process

https://www.sfchronicle.com/

bayarea/article/Why-do-

SF-transit-projects-take-so-

long-4551887.php

Adjustedopening

dateEarly2019

https://www.sfchronicle.com/

bayarea/article/Bay-Area-

transit-projects-shift-What-it-

means-6597101.php

Actual/New

OpeningDateMid-2021

https://www.sfmta.com/sites/

default/files/reports-and-

documents/2020/07/vn_

newsltr_2020-04_webversion.

pdf,p3

$169.6mforbusproject

alone,$309.3mtotal

includingassociated

publicworksrelocation

andrestoration

https://www.sfcta.org/projects/

van-ness-improvement-project,

“CostandFunding”

$309.3m

totalincluding

associatedpublic

worksrelocation

andrestoration

MORE FOR LESS 52

Phase 1 Phase 2

MILESTONE DATE/YEAR SOURCE DATE/YEAR SOURCE COST SOURCE NOTES

ConceptStudy 1993

https://archive.org/details/

bayshoretransits1993sanf/

page/n183/mode/2up

1993

FundingMeasure

Passed2001

https://www.transit.dot.gov/sites/fta.

dot.gov/files/docs/Central_Subway_

ROD_and_MOA.pdf

Initialcostestimate 2004

https://books.google.com/

books?id=j_85AQAAMAAJ&pg=SL1-

PA156&lpg=SL1-PA156&dq=

central+subway+preliminary

+engineering&source=bl&o

ts=1_r7oCTmDj&sig=ACfU3U1pB5-

Khsoa0XpJOn--yGLbOCHGXg&hl

=en&sa=X&ved=2ahUKEwi1stHSpc

3qAhVUJTQIHdHHAt04ChDoATA

DegQIChAB#v=onepage&q=centr

al%20subway%20preliminary%20

engineering&f=false;pageA-156

994.4m

Fromannualreport

onNewStartsfrom

DOT

ConceptStudy2003-

2009

https://archive.sfcta.org/

sites/default/files/content/

CapitalProjects/images/

Central_Subway/CentralSubway_

factsheet_042017.pdf

$1.4125b

https://books.google.com/

books?id=j_85AQAAMAAJ&pg=SL1-

PA156&lpg=SL1-PA156&dq=

central+subway+preliminary

+engineering&source=bl&o

ts=1_r7oCTmDj&sig=ACfU3U1pB5-

Khsoa0XpJOn--yGLbOCHGXg&hl

=en&sa=X&ved=2ahUKEwi1stHSpc

3qAhVUJTQIHdHHAt04ChDoATA

DegQIChAB#v=onepage&q=centr

al%20subway%20preliminary%20

engineering&f=false,pageA-155

Fromannualreport

onNewStartsfrom

DOT

InitialApplication

forFedFunds2002

https://www.sfmta.com/central-

subway-project-history

EIRStart Oct-96 2005https://www.sfmta.com/central-

subway-project-history

EIRComplete 1998

https://www.sfmta.

com/sites/default/files/

reports/2017/Central_

Subway_Final_SEISSEIR_

Volume_I_Part1.pdf,p3

Sep-08https://www.sfmta.com/central-

subway-project-milestones$1.235m

https://www.sfmta.com/sites/default/

files/reports/2017/Central_Subway_

Final_SEISSEIR_Volume_I_Part1.pdf,

pS-13

YOEdollars,

includesvehicles;

seetableS-3forfull

break-outofcosts

FTAROD Mar-99 1-Nov-08https://www.sfmta.com/central-

subway-project-milestones

FullfundingGrant

Agreement1-Oct-12

https://archive.sfcta.org/

sites/default/files/content/

CapitalProjects/images/

Central_Subway/CentralSubway_

factsheet_042017.pdf

Groundbreaking Sep-00

https://www.sfgate.

com/news/article/

Groundbreaking-for-

Muni-s-Third-Street-Light-

Rail-2736746.php

1-Feb-10https://www.sfmta.com/central-

subway-project-milestones

OriginalOpening

Date2016

https://www.sfmta.com/sites/

default/files/reports/2017/Central_

Subway_Final_SEISSEIR_Volume_I_

Part1.pdf,pS-34

SecondOpening

DateLate2018

https://archive.sfcta.org/

sites/default/files/content/

CapitalProjects/images/

Central_Subway/CentralSubway_

factsheet_042017.pdf

$1.578bhttps://www.sfmta.com/projects/

central-subway-project

Actual/New

OpeningDateApr-07

https://www.sfmta.com/

central-subway-project-

history

2021https://www.sfmta.com/projects/

central-subway-project

Central Subway

MORE FOR LESS 53

Silicon Valley BART Extension

Combined Phases

MILESTONEDATE/

YEARDETAIL SOURCE COST SOURCE NOTES

Concept Study 1982

SVBXInBART

ShortRange

Transportation

Plan

https://archive.org/details/

bayarearapidtran1982sanf/

page/56/mode/2up

Major Investment

Study2001

https://www.vta.org/projects/

bart-sv

SouthFremont

toSantaClara

Funding Measure

Passed2000 MeasureA

FTA New Starts

Rejection2005

https://www.transit.dot.gov/

sites/fta.dot.gov/files/docs/

FY05_Annual_Report_on_

Funding_Recommendations.

pdf

RejectedPhase

IandPhaseII

together

Phase I and II EIR2004-

2011

https://www.vta.org/projects/

bart-sv/phase-i

Project

separatedinto

twophases

in2009,and

thereforeVTA

completed

a2nd

supplemental

environmental

EIR

Split Project into 2

Phases2009

https://www.vta.org/projects/

bart-sv

Phase 1 Phase 2

MILESTONEDATE/

YEARDETAIL SOURCE COST SOURCE

DATE/

YEARDETAIL SOURCE COST SOURCE NOTES

FTA Record of

Decision2018

RODfor

PhaseII

https://www.

vta.org/blog/

vta-receives-

federal-record-

decision-

bart-silicon-

valley-phase-

ii-extension-

project

Funding Measure

Passed2016 MeasureB

Groundbreaking 2012https://www.vta.org/

projects/bart-sv

Projected

Opening Date2017

https://web.archive.org/

web/20160924151758/

http://www.

mercurynews.

com/2012/03/12/

next-target-extending-

bart-under-downtown-

san-jose/

2028

Completion

ofsubstantial

construction

https://www.

vta.org/blog/

vta-first-

agency-submit-

expedited-

federal-funding-

request-bart-

phase-ii

$6.5

billion

https://www.

vta.org/blog/

vta-first-

agency-submit-

expedited-

federal-funding-

request-bart-

phase-ii

Cost

estimate

updated

asofJune

2020.

Adjusted

Opening Date2019

https://www.vta.

org/blog/vtas-bart-

berryessa-extension-

update

Actual/New

Opening Date2020

https://www.vta.org/

projects/bart-sv

MORE FOR LESS 54

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