News: CJ Exclusives

Light-Rail Projections Disappoint Feds

Advocates using computer models to whip projections into shape

Even while North Carolina’s three largest metro areas try to boost their “world class city” credentials with new light-rail transit systems, ridership trends suggest that such prestige projects will only aggravate already-spiraling costs.

Nowhere is this more evident than in Raleigh-Durham-Chapel Hill, where the Triangle Transit Authority is the lead agency for a regional light-rail system that is supposed to cost about $630 million.

TTA’s project got plenty of the wrong kind of attention early this year when it got snubbed in President Bush’s budget recommendations, even while Charlotte hit the jackpot with about $199 million. It also came out at the same time that the Federal Transit Administration had major questions about some of the ridership forecasting models used by TTA and the other Triangle-area planning organizations.

This setback also came at a time when TTA is also trying to grapple with problems in its current cost structure. The organization has been drawing down its cash reserves to meet operating expenses, and this trend has increased over the last few years. While TTA, like all North Carolina transit agencies, is heavily subsidized, several board members have asked publicly whether more fiscal discipline isn’t needed.

TTA is also trying to tinker with its service mix to boost revenue. In April, TTA introduced evening buses direct to Durham Bulls baseball games. New intercity express services are being contemplated and some unproductive routes may be dropped.

But as far as the federal grant is concerned, it’s back to the grindstone, at least until late summer, TTA spokesman Garold Smith said. TTA has hired a consulting firm for nearly $380,000 to help iron out kinks in various computer models and whip the ridership projections into a shape that will be acceptable to the federal funders.

“I think it’s important to note that the federal people never questioned the need for the project,” Smith said.

TTA has already received about $85 million for the light-rail project over several federal budgets. Smith said that it’s entirely possible that this year’s request, about $30 million, will be restored after the problems with the forecasts have been worked out.

David Hartgen, professor of transportation at the University of North Carolina at Charlotte, said that TTA’s management may be too optimistic. “Competition for these dollars has become very intense and a few months delay could put them back a year or more,” Hartgen said.

“All the cities vying for transit dollars are required to make careful estimates of what traffic will be. Those numbers are compared against costs, so that the feds have some measure of the overall cost-effectiveness of these investments across the country,” Hartgen said.

One important number is the cost to attract one new rider to the transit system, Hartgen said. Anything above $25 is going to be suspect—and Hartgen noted that Charlotte’s $400 million light-rail system just barely made the cut, by this criterion. Always, the feds are looking for projects that have some reasonable expectation of persuading automobile commuters to switch to mass transit. Projects that promise only to get bus riders to switch to light rail are unlikely to get funded.

Hartgen explained that these statistical ridership models hinge on forecasts of the degree to which traffic congestion will worsen in a community over time. The assumption here is that the worse congestion is, the more commuters will be motivated to switch to mass transit.

There are a few flaws in this assumption, Hartgen said. First, the models tend to overlook the degree to which commuters will change their driving habits—leaving earlier for work, for example—rather than give up their cars.

Also, the models have to account for regional growth in population and business activity, which are largely out of the hands of planners, Hartgen said.

Any accurate model also has to reflect any upcoming changes to the local highway system. A forecast that assumes there will be no highway improvements will tend to maximize potential new transit riders. But in the real world, highway improvements would be going on even as the mass-transit system expanded, Hartgen said.

Public transportation historically has been heavily subsidized everywhere in North Carolina. A particular cause for concern is that the gap between ticket revenues and operating expenses grows wider each year, according to figures compiled by Hartgen.

This has not deterred the Charlotte Area Transit System, which started work this year on a light-rail system estimated at $427 million.

Considering that CATS’ annual budget of about $60 million represents nearly half the mass-transit money spent in North Carolina, $400 million for a light-rail system might be considered proportional to the size of the city’s current transit program.

Also, Charlotte’s light-rail system is designed to provide a link between the suburbs and a fairly well-developed downtown business and entertainment district.

Even so, Charlotte is a typically sprawling New South city, and for that reason considered by many transit critics such as Hartgen as a poor prospect for light rail.

By comparison, the cities of the Research Triangle and Piedmont Triad are even more spread out than Charlotte and have relatively small central business districts.

Yet, Raleigh-Durham-Chapel Hill is supposed to get light rail by 2008, and plans are on the table for a light-rail system to connect Greensboro and Winston-Salem early in the next decade.
TTA also has the dubious distinction of being the most heavily subsidized system in North Carolina, according to one key measurement.

TTA’s average cost per trip was $7.86 in 2003, the last year studied by Hartgen. The system’s costs have risen about twice as fast as its revenue from bus ticket sales. TTA spent $7.6 million on operations in 2003, versus $3.9 million in 1997. But ticket revenue over this period rose only from $648,000 to $973,000.

Historically, TTA has always been the most costly transit system in North Carolina. Hartgen said that this is partly because its market is so diffuse.

Raleigh, Durham, and Chapel Hill all have well-established city bus services, with TTA’s routes linking the communities. While this made TTA the natural agency to oversee light rail in the Research Triangle, it’s also a long-term problem that’s likely to get worse if the light-rail system ever gets built.

“Basically, what you have are routes linking downtown to downtown. These are less likely to attract a lot of riders than service between the suburbs and downtown,” Hartgen said.

By comparison, Charlotte’s light-rail system will mainly move suburban commuters to downtown. This is at least a logical model, Hartgen said, although he still thinks it will prove far too costly.

TTA’s cost structure is conspicuously high. The next-worst is Greensboro, which carried passengers at a per-trip cost of $4.56 in 2003.

But, as North Carolina’s largest system, Charlotte may provide the best yardstick against which to measure all others. Again, Charlotte repeats the disturbing trend of costs rising much faster than revenues.

CATS’s operating costs nearly tripled from $22.9 million in 1997 to $63.2 million in 2003. Meanwhile, fare revenues rose from $6.1 million to $8.9 million over the same period.

CATS was at least able to achieve a substantial increase in ridership over the seven-year study period—11.7 million trips in 1997 against 18.9 million in 2003.

While this additional patronage certainly makes good talking points for Charlotte’s new rail system, it hasn’t translated into a stable cost structure. It cost CATS about $1.96 a trip to carry 1997’s passengers. By 2003, many more people were using CATS, but at a cost of $3.35 a trip.

Even TTA’s neighboring transit systems aren’t generating enough business to suggest that the Research Triangle desperately needs to move up to light rail. Raleigh’s Capital Area Transit actually saw no growth in ridership or ticket revenues from 1997 to 2003. Yet its per-trip costs rose from $2.02 to $3.13.

Bob Fliss is a contributing editor of Carolina Journal.