VTA asks feds for $4.6B for BART line
Agency seeks federal grant to help fund project that could cost $9.3 billion
After months of downplaying a ballooning federal estimate, the Santa Clara Valley Transportation Authority is now acknowledging that its long-delayed project to bring BART trains running through San Jose could cost a staggering $9.3 billion.
But transit officials overseeing the construction of one of the country's biggest transit extensions say they have a plan to fill a yawning gap between project costs and available funding. They are asking the Biden administration for a historic federal grant totaling $4.6 billion, which they say will push BART to the finish line by 2034 — four years later than VTA's current official timeline.
The funding request, outlined in a VTA letter to the Federal Transit Administration last month, would move the BART project into a funding program called New Starts, which would significantly increase Washington's share of project costs. Currently, the FTA has agreed to fund up to $2.3 billion.
“We can almost double the federal investment in the project,” VTA General Manager Carolyn Gonot said in an interview this week. Santa Clara County residents have voted twice to tax themselves — first in 2000 and again in 2008 — to make the BART project a reality. Local voters have “have done their share,” Gonot added. South Bay taxpayers have agreed to pay about $2.8 billion through sales taxes and another $375 million in bridge tolls.
In total, the agency needs $9.3 billion to ensure the project is properly funded. The number is primarily based on an earlier FTA analysis that pinned the likely cost at $9.1 billion. Gonot
said the agency adopted the FTA's analysis and tacked on an extra $200 million due to rising interest rates. “We just marked it up,” she said. “I hate to say that — we're trying to be as conservative as possible as we go out there.”
The total figure for the mega-project is now 35% higher than the last estimate of $6.9 billion and nearly double the estimate in 2014. But VTA officials are quick to add a caveat to their funding request, saying they do not know the true cost or timeline of the project at the moment. A better estimate will come during a top-to-bottom “rebaselining” effort that could result in a figure that is lower or higher, Gonot said.
Heading that process is Gary Griggs, a former president of Parsons Brinckerhoff, a major design and construction firm. His experience on Bay Area rail projects stretches all the way to work on the VTA light rail and the long-delayed Central Subway project. Griggs replaced Takis Salpeas, a consultant who recently stepped down but will continue to collect a $640,000-a-year salary through the end of his contract in February.
“What's going on in the marketplace makes (costs) very difficult to predict,” Griggs said. “There's a lot of uncertainty, but I think there's a consensus that those numbers will start coming down,” Griggs said, referring to inflationary factors driving up the price of mega-projects around the country.
At the heart of VTA's funding request is a federal risk analysis that in 2021 pinned the project's likely cost at $9.1 billion. VTA officials said at the time that the federal figure was a cost ceiling; however, the analysis included higher figures that could top $10 billion. VTA and San Jose officials originally sought to mask the rising cost, saying contractors would seek to milk the transit agency for more money if they knew the higher figure.
The FTA risk analysis is also out of date. The FTA completed the review of the project over a year ago, long before inflation went haywire. In a July report obtained through a public records request, an FTA consultant said that the Santa Clara County agency had not responded to repeated requests for updated cost and time estimates. The FTA “continues to be concerned that the project estimate is under-representing the total cost due in part to contingency, inflation, and an optimistic base schedule and risk profile,” the report said.
Griggs insists that local planners are catching up with their to-do list.
“We made a commitment to (the FTA) that we will provide that information and work more closely with them,” said Griggs.
If the FTA accepts the VTA's plan for more federal funding, it would be “the largest single New Starts grant in history,” said Eric Goldwyn, a New York University professor who studies transit project costs. “That's a big ask.”
In a short statement, the FTA said it has received the VTA proposal and “will examine their requests and respond as soon as possible.”
But pinning the future of rail transit in the Bay Area on Washington also comes with some risk. Republicans who may take control of Congress in January have previously dubbed the BART extension “Nancy Pelosi's Silicon Valley subway” and sought to restrict funds. A VTA top official said that the federal infrastructure program typically enjoys broad bipartisan support, and the agency would be surprised if Republicans moved to upend money to the program.
Now as the VTA acknowledges an inflated budget and timeline that could stretch to 34 years after voters first approved the project, the next months are pivotal territory. The VTA will soon approve funds to purchase a massive tunnel boring machine that will spend years digging through the county and downtown San Jose. Could continued cost and timeline inflation leave Santa Clara County residents stuck with a project that is over budget and beyond schedule?
“Let me just say very clearly, there are no assurances, period,” San Jose Mayor Sam Liccardo said recently. “There are enormous uncertainties, and in a world in which construction costs are rapidly rising, it is critical to lock down costs and get construction underway quickly.”
On Thursday, Liccardo took a more combative tone, issuing a news release that challenged this news organization's stories over the last year revealing the federal risk analysis and argued the $9.3 billion figure is not a true “cost estimate.” The mayor defended VTA's previous efforts to hide the growing figures from the public, saying disclosing such information would lead contractors to increase their contract bids. In an earlier interview, Liccardo was unable to say if the attempt to hide the FTA analysis reduced costs on the project.
Mayoral hopeful Cindy Chavez, a VTA board member and county supervisor, also said she backed the funding change.
“We've done our part,” she said. “Right now it's time to get the state and federal government to contribute to this project.”