Economic Impacts of Delayed or Eliminated

TCRP & STIP Projects:

A Survey of Regional Transportation Planning Agencies

February 12, 2003

Contact Information:

Diane Nguyen Grindall

RTPA Moderator

SJCOG

6 S. El Dorado St, Suite 400

Stockton, CA 95202

Tel. (209) 468-3913

Fax. (209) 468-1084

e-mail: dgrindall@sjcog.org

Overview

STIP and TCRP projects do not simply mean keeping the traffic flow, but they are indeed one of the critical economic stimuli continuously bolstering California’s economic vitality. One out of every fourteen workers in California was employed by the transportation industry in 2001 according to U.S. Bureaus of Labor Statistics. In addition, more than 300,000 construction workers and 50,000 engineers also benefited from transportation projects, not to mention the indirect employment serving all of these people. In addition, STIP and TCRP projects improve accessibility to economic centers, enhancing the labor force’s mobility for education and employment, connecting California trading hubs with other regions and countries, reducing the economic loss associated with congestion, safety and poor air quality. STIP and TCRP are economically vital for the State of California.

Statewide Picture:

There is currently $5 billion allocated statewide for various TCRP projects and $10 billion for various STIP projects in the next five years. The funding for these projects is fundamentally vital for the overall economic wellbeing of the state. This will not only benefit the transportation sector, but also the indirect and induced services employments associated with transportation projects, such as employments in equipment manufacturing, steel, concrete, engineering, restaurants, etc. In addition, the billions in infrastructure investment also generate federal, state and local tax.

Aside from the employment and dollar figures, many of the STIP an TCRP projects play critical roles in the state, regional and local economy by improving access to economic and social capital engines, promoting greater regional integration, assuring public safety, and assisting in downtown revitalization efforts. All of these benefits will have multiplier effects advancing not only the local communities’ economy, but also the region’s and the state’s economy in a long run.

Compromises in STIP and TCRP funding could be extremely deleterious for California. First and foremost, jobs statewide created by STIP and TCRP projects will be at stake, not to mention one out of every fourteen California workers, who are working in the transportation industry, and their families will be negatively affected. In addition, billions in personal earnings, taxes and other expenditures generated through these projects will also evaporate. Matching federal funds to transportation deliver projects are subject to being lost. Traffic congestion will increase, resulting in greater loss in productivity. Air quality will suffer.

Regional Picture:

Many of the STIP and TCRP projects do not only serve the immediate locales, but they also benefit the entire region and even the country. The enormous long-term large scale benefits of STIP and TCRP projects can be partially demonstrated through the projects like:

Transportation infrastructure as economic infrastructures: STIP and TCRP fund the construction of SR-111 and other freeways designated as International Boarder Trade Corridors to improve the goods movement between California and Mexico. Also STIP and TCRP projects improving access to Orland Airport in Glenn County, Port of Huememe and other transportation facilities are the basis for enhancing local and regional economic infrastructures for future growth. The benefit of improving these economic infrastructures will expand to the entire region or even the state for years to come.

Regional Integration: Regional integration is as important as improving local transportation infrastructures, given the fact that today’s economic and social activities are rarely constrained by local boundaries. Projects enhancing regional integration are crucial for these regions to continue to grow complementarily in the future. Some of these STIP and TCRP projects include: I-205 connecting the Central Valley and San Francisco Bay Area, improvements on connecting Amtrak, Metrolink and other regional transportation services in Southern California, HW-17 commuter buses connecting Santa Cruz with the San Francisco Bay Area.

Promoting Economic Engines: The health of an economic engine certainly relies on a well-established transportation network connecting it to other economic components. It is therefore imperative to maintain and ameliorate the economic engines’ access in order to better the economy. Transportation corridors are the arteries for goods movement.

Accessing Social Capital Engines: An efficient transportation system also enhances people’s access to social capital engines, which will in return generate greater economic benefits for society in the long run. STIP and TCRP projects seeking improvements on access to social capital engines include: SR-99 and local projects linking to the new University of California, Merced campus, California State University, Channel Islands campus and other institutes.

Downtown Revitalization: A deteriorated network will usually result in a deteriorated downtown, and improving access to downtown is often the first step to witness downtown revitalization. Many STIP and TCRP projects serve this purpose well, such as Coaster Commuter rail improving City of Oceanside’s downtown access, City of Tracy downtown multi-modal station, etc.

Safety Assurance: To assure the safety the public using the transportation system is one of the primary goals of the government. STIP/TCRP projects have been playing a critical role in achieving this objective for a long time.

Preventative Maintenance: Many regions have invested the TCRF and STIP funding on preventative maintenance. Loss of revenue for local cities and counties to maintain streets will result in more streets falling into reconstruction and a backlog of deferred maintenance. A street which needs to be reconstructed can be ten times the cost compared to preventative maintenance.

The following are specific regional concerns on the economic impacts of potential cutbacks on STIP and TCRP projects:

Butte County Transportation Commission

While your request is to document the adverse economic impacts of project delays, Butte County is a rural county without a major port, regional airport or other significant “economic” generator to the state. However, at the local, rural level, the economic impacts as a result to project delays on our transportation system will be significant to a county that is already financially troubled. Butte County, and its incorporated cities do not have the means to “float” projects with local funds as a result of delays. Cash flow on existing projects is a major concern for projects under contract.

Without getting into too much rhetoric, project delays will prevent the delivery of safety and operational projects that significantly affect the movement of resources and goods to and through Butte County.

In BCAG’s opinion the following criteria should be considered in prioritizing projects:

Projects currently under contract
Safety projects
Projects requesting an allocation for construction
Proposition 35 projects where the local agency has committed resources to staff positions to manage these projects and consultants have been acquired.
Projects that leverage other federal funds with STIP funds
Grandfathered STIP projects that are nearing construction
TCRP projects are the responsibility of the respective county where the project is located – not “off the top of the STIP.”

Glenn County Transportation Commission

The Glenn County Transportation Commission has allocated and spent all its STIP funds from the prior STIP cycles in a timely manner. Two bridge projects did not proceed because of lengthy environmental review processes. The road systems in the County and the two incorporated cities have seen a dramatic upturn with the completed STIP projects, but there are still many miles of road that need rehabilitation. The County Road 27 projects are to improve a vital east-west connection between Interstate 5 and eastern California. The prospect is to designate the road a truck route to eliminate truck traffic in the city of Orland for safety reasons and to provide a quicker and safer route for large trucks. The programming of these projects was delayed to the outer years of the STIP because of the limited funding in the first years and further delay will increase the cost and safety concerns. The same is true of the County Road 200 project. This road provides access to recreational areas of Glenn and Tehama Counties. The road is in dire need to rehabilitation. Further delays will increase the cost because the road will be in worse condition and also increase safety concerns.

Glenn County is in the process of developing an industrial park near the Orland Airport. The County Road 27 and County Road P projects are lynch pins to this development. A smooth, quick access from Interstate 5 on County Road 27 to County Road P to the Industrial Park is a benefit for economic development in this area. The industrial park development would create jobs and increase the economic base of Glenn County.

Imperial County

STIP projects:

Ø New Route 7 Expressway-Construct 4 lane expressway

SR-7 is a NAFTA route and with the recent federal decision to expand the access to Mexican trucks, delaying the project will delay delivering times for trucks that need to continue to take a round-a-bout way to reach points north. Safety issues arise as we will continue to see truck traffic mix with local farm traffic. Air Quality/Environmental concerns – lands now in state ownership are going to be fallow to farming in many areas until the expressway is completed. A delay in construction will harm the region economically until the land is once again harvested.

Ø Brawley Bypass- Construct 4 lane expressway and interchange

The purpose of the Brawley Bypass is to reduce traffic impacts in the downtown area of Brawley and to accommodate increased regional and international traffic due to the North America Free Trade Agreement (NAFTA). This project is the last in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County. Completion of this project will greatly enhance inter-regional and international movement of goods and services though the Imperial Valley and accommodate the growing demands of the region. Along with SR-111, this project is part of the NAFTA Network (NET) and has been designated as International Border Trade Corridors (IBTC) and Intermodal Corridors of Economic Significance (ICES). The IBTC is a transportation network in Imperial, San Diego and Riverside Counties that link the international border regions to the existing transportation system. The ICES system includes these corridors that are most essential to the California economy in terms of national and international trade.

This project would directly create approximately $14,000,000 in wage income. These wages would have an additional multiplier effect of 1.997 on service and support jobs resulting in indirect wages of approximately $28,000,000. Economic benefits from profit and materials are often seen outside of the construction area but most of the wage income benefits are likely to be utilized in the immediate area. This constitutes a substantial benefit to Imperial County’s economy.

If this project is delayed or deleted it would undoubtedly have a major impact on the economy of the region and the State.

Ø Pavement rehabilitation for SR 111 Relinquishment

The purpose of this project is to rehabilitate SR-111 prior to relinquishment to the County of Imperial. After construction of the new SR-111 (see 4-lane expressway) , existing 111 will be relinquished to the County of Imperial as a major frontage road serving local traffic and slow-moving agricultural vehicles. Delaying or deleting this project would result in further deterioration of the pavement, increased maintenance costs and safety issues.

Ø Reconstruct I-8 / Imperial Ave interchange

Elimination of this project will impede access to the existing and future development south of El Centro, along Imperial Avenue. By 2020 traffic on this section of I-8 is projected to increase by 50 percent. Delaying or eliminating this project will contribute to the increased congestion and operational deficiencies of the existing interchange.

Ø 4 lane expressway, Keystone to Route 78

This project is the third in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County.

Along with the Brawley Bypass, this project is part of the NAFTA Network (NET) and has been designated as International Border Trade Corridors (IBTC) and Intermodal Corridors of Economic Significance (ICES). The IBTC is a transportation network in Imperial, San Diego and Riverside Counties that link the international border regions to the existing transportation system. The ICES system includes these corridors that are most essential to the California economy in terms of national and international trade.

The project would directly create approximately $4,000,000 in wage income. These wages would have an additional multiplier effect of 1.997 on service and support jobs resulting in indirect wages of approximately $8,000,000. Economic benefits from profit and materials are often seen outside of the construction area but most of the wage income benefits are likely to be utilized in the immediate area.

If this project is delayed or deleted it would undoubtedly have a major impact on the economy of the region and the State.

Ø Route 98 Widening (West of Route 111)

Elimination of this project will impede international and interregional movement of people, goods and services between Mexico, Calexico and beyond due to of increased congestion within the City of Calexico. Elimination of this project will not address the concerns of the community regarding pedestrian and motorist safety due to the conflicts associated with the high truck volumes within the project limits.

Ø Widen State Route 98 (Near Calexico - Route 111 to Rood Rd)

Elimination of this project will impede the accommodation of NAFTA, interregional and local traffic by not allowing for improved access between the new Calexico East Federal Port of Entry to SR 11 and beyond.

Ø Brawley Bypass- Ross to Worthington - Construct 4 lane expressway

The construction of this project was completed in December 2002 and therefore it cannot be delayed or deleted.

This project is the first in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County.

Ø 4 lane expressway, Worthington to Keystone

This project is the second in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County. Construction of this project is about 75% complete. Terminating this contract would leave the corridor incomplete and would create liabilities with the contractor performing the work and with the traveling public.

Ø Mitigation work for 4 lane expressway, Keystone to Route 78

Project can not be deleted as it is required mitigation work for SR-111.

TCRP projects:

Ø TCRP # 148.1 Widen State Route 98 (Near Calexico - Route 111 to Rood Rd). Elimination of this project will impede the accommodation of NAFTA, interregional and local traffic by not allowing for improved access between the new Calexico East Federal Port of Entry to SR 11 and beyond.

Ø TCRP # 148.2 Route 98 widening between Route 111 and Route 7.

Project has been completed. No lost economic opportunities.

Los Angeles County Metropolitan Transportation Agency

Economic Impacts of Delayed or Eliminated Projects

February 7, 2003

The MTA has studied the economic impacts of suspending $8.4 billion in highway and transit capital investments contemplated by the financially constrained Long Range Transportation Plan for Los Angeles County. The study covered the period between FY 2003 and FY 2009 that corresponds with the terminus of the next Federal transportation reauthorization and the next State Transportation Improvement Program.

The State of California General Fund deficit crisis could cause the loss of one third or more of the $8.4 billion program in Los Angeles County due to the impact of the deficit upon the Traffic Congestion Relief Program. The study results reveal that the suspension of one third of the $8.4 billion program would cause a large number of job losses, substantial negative effects to economic productivity, and the loss of tax revenues stemming from the negative effects on the economy due to increased traffic congestion.

Using the Regional Economic Models, Inc. (REMI) forecasting methodology, the MTA estimates negative impacts in Los Angeles County in 2009 if the entire program were to be suspended. About one third of these impacts are forecasted to arise from the State’s General Fund deficit crisis as shown in Table 1, below, unless solutions are found.

Major Economic Impacts of the State General Fund Deficit on

Los Angeles County*

Table 1

Economic Indicators	Cumulative Amount 2003-2009	Annual Amount in 2009
Loss of Full Time Equivalent Jobs	38,987	8,567
Loss in Business Output	$ 4.0 Billion	$ 975 Million
Loss in Personal Income	$ 2.3 Billion	$ 537 Million
Loss in State Government Revenues	$ 271 Million	$ 61 Million

*Assumes structural deficit in State General Fund prevents all TCRP project funding through FY 2009.

Madera County

The following table summarizes impacts to Madera County in the event that STIP projects are delayed or eliminated:

Project Name & Description	Description of Impact	Estimated Dollar Value of Loss ($ in thousands)	Potential Jobs Lost
SR99/145 Upgrade: s/o Gateway Drive off ramp to n/o South Madera Overcrossing, Rte 145/99 Separation – modify interchanges	Delay relief of congestion. It is critically important to the community that this project be completed to provide direct access to the Madera Community Hospital from Fwy 99.	$8,550	110
Various local rehab projects in the City of Madera	Construction is complete. The loss to the City of Madera would equal the construction cost for all projects.	$1,281 CTC Allocation & prog supplement executed	0
Planning, Programming & Monitoring	Would seriously impact the ability to perform planning functions including those functions necessary to comply with regulatory requirements.	$150	1-2
Cleveland Ave – widen street to provide shoulders and parking, construct median, pavement rehab.	Contract is awarded. Loss of jobs would result if construction is delayed/eliminated. It is undesirable to delay the safety improvements that this project will provide.	$746 CTC Allocation & prog supplement executed	30
CMAQ match reserve	Funds are match to three alternative fuel vehicle projects and the Fresno River Trail project. Each project is intended to reduce emissions in Madera County. Delay will affect timely implementation of TCMs.	$67	0
Various rehab projects	Implementation has already been delayed as a result of the recent re-spreading of STIP funds. Work is urgently needed to prevent further deterioration of roads.	$2,000	22
Olive Ave from Q St. to I St; reconstruct and widen to 4 lanes w/ median	Project was already delayed as a result of the recent STIP respreading. Project is greatly needed to reduce congestion and improve safety at and near the Madera High School – North campus.	$750	18
Almond Ave. new connector and RR crossing, from Schnoor Ave to Pine St.	Delay of project would impact circulation of traffic in a growth area.	$500	8
Madera Amtrak Station relocation (STIP-IIP)	Delay of project would prevent timely implementation of safety improvements and adversely affect ridership.	$800	1
Fairmead Interchange & 6-lane freeway (STIP-IIP)	Funding delay would delay important safety improvements: elimination of the last existing “at grade” SR 99 access points within Madera County.	unavailable	unavailable
Robertson Blvd, widen and construct sidewalks	Would experience loss of construction and engineering jobs.	$500	3
Rehab: Ventura Ave from 3^rd to 4^th St and from 4^th to 9^th St.	Would experience loss of construction and engineering jobs.	$100	2-3

Merced County

STIP Projects

All of the Highway 99 Projects in Merced County

Upgrading Highway 99 from expressway to freeway status within Merced County is a statewide priority. The at-grade crossings create a major safety concern for all who travel on this road. The unsafe conditions of this major state facility are exasperated because of the adjacent railroad tracks and the fog.

Highway 152 Bypass

The Highway 152 Bypass has been Merced County’s number one priority project since 1992. This project provides a bypass around the City of Los Banos- the fastest growing city in the County.

Campus Parkway

Campus Parkway provides access to North Merced, the New UC Campus and the Santa Fe Industrial Park from Highway 99. If the TCRP funding was eliminated this project would be not be constructed. The project was fortunate to received TEA-21 demonstration funding in the amount of $11 million and these funds would be lost to the State if the project was eliminated. Plus funds already expended would need to be returned.

YARTS Staging Areas

The YARTS project supports an alternative means of transportation the 4 million visitors a year to Yosemite National Park. YARTS is a unique coalition of local, state and federal governments providing an alternative means of transportation to one of the most famous national parks, Yosemite. The economies of Mariposa, Merced, and Mono Counties are dependent on the visitors that come into the region each year, and by providing and supporting this service allows the counties to guarantee access to Yosemite National Park.

Highway 140 Bradley Overhead

This project replaces an antiquated two-lane bridge over the Santa Fe Rail Road Tracks. The STIP funding supplements SHOPP funding by increasing the capacity of the bridge. The coordination of these two funding sources saves approximately $25 million in STIP funding by constructing one project instead of two.

Existing Highway 59 Project

This project remedies Merced County’s existing “Level of Service F” congestion problem that has been a problem for many years. It provides a vital connection from North Merced to Highway 99 and South Merced.

Castle Highway Project

The programmed RIP funding initiates a 10-year environmental process to realign the existing Highway 59 to connect 99 and 140. Delaying the environmental review will increase the cost of construction.

Freeway Planting Project

Is a very small project to beatify Highway 99 in Delhi and Livingston. This project is under construction at the present time.

Metropolitan Transportation Commission

(Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, Sonoma Counties)

Economic Loss Summary for the Bay Area

STIP

The MTC region has $0.56 billion in outstanding STIP fund allocations representing significant infrastructure enhancement projects such as Route 87 Freeway Corridor, Route 29/37 Interchange, and I-680 HOV Lanes. In addition, there is roughly $1.07 billion in committed STIP funding that has not yet been allocated. In total, this $1.64 billion in STIP funding would create roughly 27,250 construction jobs and 54,500 in related service jobs. The associated wage earnings – or potential loss should these projects be delayed – is $4.09 billion. The related state, local and federal tax income is $1.43 billion.

TCRP

The MTC region has $0.51 billion in outstanding funding allocations for TCRP projects, including funding for Muni Third Street Light Rail Extension and Caltrain Express. These projects sponsors have, in most cases, entered contracts for project work and any delays in fund availability will have immediate effects on construction jobs. The $0.51 billion in allocated funding creates 8,500 construction jobs and 17,000 in related service jobs. Somewhat less immediate but just as important for the economy in the long-term, the Bay Area has $0.94 billion in unallocated TCRP funding. Among the projects funded with these monies are BART to San Jose, Route 4 widening, and Caltrain expanded service to Gilroy. The unallocated TCRP funding commitments are associated with 48,000 total construction and service jobs. All jobs that could be created by the TCRP projects would generate roughly $3.63 billion in wage earnings and $1.27 billion in taxes income for federal, state and local governments.

Table A summarizes Bay Area STIP and TCRP job and economic losses and outlines MTC underlying assumptions. While the above factors have been taken into consideration to evaluate the Bay Area economic loss as a result of proposed transportation funding cuts, there are still more impacts, such as the sales and other tax revenue loss as well as the travel time loss, which could be significant but are difficult to quantify.

Orange County Transportation Authority

Identify potential dollar value of economic loss.

A 1999 Cost Benefit Analysis performed by the Los Angeles Economic Development Corporation estimates approximate $630 million of benefits from the total Orange County Gateway project to eliminate 11 at-grade railroad crossing. This is the sum of costs of traffic delays, accidents and fatalities, air quality benefits, quality of life and adjoining land use benefits, and job income and tax revenues.

The TCRP funded projects grade separate 3 of the 11 crossings. Assuming straight line benefits, the economic loss would be $172 million.

Identify number of potential jobs lost to the region.

The LAEDC study estimated 1,278 direct jobs and an additional 2,044 indirect jobs resulting during construction of the Orange County Gateway project for a total of $142 million in earnings. Assuming straight line relationships, the potential number of direct and indirect for the TCRP funded projects would be 349 and 557 respectively for a total of $39 million in earnings.

Note: STIP includes both STIP ($1.1 million) and ITIP ($2.2 million). State cash is required because of CEQA environmental clearance.

Placer County Transportation Planning Agency

Summary

If the projects on I-80, SR 49, and the Lincoln Bypass are delayed or eliminated, there will likely be a significant negative impact on the ability to move goods through the region. This will discourage businesses from locating in Placer County, which will in turn reduce the number of jobs available. Traffic congestion will increase, resulting in greater loses in productivity. Air quality will suffer as well, which could jeopardize federal funds for transportation projects.

If the rail station improvement projects are delayed or eliminated, current or potential new train riders will find taking the train an inconvenient, frustrating, and unsafe experience. They will continue to drive, causing additional traffic congestion and further reducing air quality.

Estimated Jobs and Tax Revenue Lost

The following assumptions were used to estimate the number of jobs and tax revenue lost if all programmed STIP funds for construction of projects in PCTPA’s jurisdiction are eliminated.

1. Projects funded with STIP $ in the construction phase are not built; therefore, all construction funds associated with that project are lost.

2. Every $60,000 in construction funding creates one job per year; $50,000 of that goes to labor cost.

3. For every construction job lost, 2 other jobs are lost in the economy.

4. The marginal Federal tax rate on earnings is 27%.

5. The marginal State tax rate on earnings is 8%.

All dollars shown in thousands.

Total construction $ lost due to loss of STIP $:------- $216,410

Construction jobs lost:----------------------------------- 3,607

Other jobs lost:------------------------------------------ 7,214

Federal tax revenue lost:-------------------------------- $2,423

State tax revenue lost: $718

Sacramento Area Council of Governments

(El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba Counties)

TCRP Projects:

The total TCRP funds to the SACOG region is about $197M. Except for two minor TCRP projects that have been completed, the rest projects could be delayed for many years and in the extreme, probably eliminated if fundings from TCRP were to stop. If this happens, more than half a billion dollars in construction will be jeopardized, more than 10,000 jobs impacted, and assuming a 1.9 factor in terms of transportation dollars' contribution to the overall economy, a potential $1 billion economic loss to the region. However, this analysis is academic since the SACOG region is currently in a 'lock down'. Consequently, we are unable to amend our TIP, except for exempt projects. If the TCRP projects are eliminated, the whole projects in our TIP will be jeopardized.

STIP Projects:

The total RIP funds programmed in the SACOG region through FY 2004 is about $110M in projects with a total cost of more than half a billion dollars. The economic impacts to the region of delaying or eliminating these projects are similar, if not worse, to those stated under the TCRP portion of this survey. Also as stated in the TCRP portion, the SACOG region is currently in a 'lockdown' and any action requiring TIP amendments could jeopardize our entire projects.

San Diego Association of Governments

Potential impacts to region if STIP projects delayed or eliminated:

The region has approximately $400 million in unexpended TCRP funds, that are at risk of being lost to balance the budget. Using FHWA's estimate of 47,500 jobs per $1 Billion in investments in transportation, the region stands to lose approximately 19,000 jobs from potential cuts in TCRP alone. In addition, TCRP funds are leveraging $150M in federal funds for the Oceanside-Escondido rail project. Cutting TCRP funds at this time may cause delays to several projects that are ready to go to construction, including the Oceanside-Escondido rail project, the I-15 Managed Lanes and others. These delays may have a compounded effect due to environmental and right of way factors which may arise from the delay in the project's schedule. For more detailed information, please see NCTD's discussion on potential economic impacts.

Assuming the region's typical share of approximately 10% from the STIP, the region is at risk of losing approximately $400 million in currently programmed STIP projects. Using FHWA's estimate of 47,500 jobs per $1 Billion in investments in transportation, the region stands to lose approximately 19,000 jobs from potential cuts in STIP alone. Cutting STIP funds at this time is likely to cause delays to several projects that are ready to go to construction, including the I-15 Managed Lanes and others. These delays may have a compounded effect due to environmental and right of way factors which may arise from the delay in the project's schedule.

Ø Oceanside-to-Escondido Rail Project

TCRP funds: $80 million

STIP funds: $ 3 million

Lost Economic Opportunities

The region and the State would lose a major amount of Federal funding if the State funding is lost. The federal funding for the Oceanside-to-Escondido Rail Project comes from a very limited and extremely competitive source of funds, which can only be used for New Start transit projects. The process to obtain the federal funding which was very lengthy and arduous is now complete. The final step was a 60-day congressional review period that concluded on December 27, 2002. The federal agreement that commits the funding, called a Full Funding Grant Agreement, is on the Federal Transit Administrator’s desk. The Administrator is now waiting for a re-commitment by the State.

Potential Dollar Value of Economic Loss

If the State commitment is lost, the Federal commitment of $152.1 million would also be lost. The commitment of state funds for $83 million (TCRP $80 million, STIP $3 million) will automatically bring an 83% return of federal funds. This is the direct loss associated with the capital project expenditure, but this is not the only loss. Much of the development along the corridor has been based on the implementation of the rail project. If the project is lost, plans for the development might also be lost. The economic value to the region would be staggering.

Potential Jobs Lost to the Region

The region would lose major employment opportunities if the Oceanside-to-Escondido Rail Project is not implemented. Not only would the project employ many individuals during the construction of the project, a long term employment base to run the operations and maintenance of the railroad, the vehicles and all of the associated systems would be realized.

The Environmental Assessment/Environmental Impact Report (using RIMSII) estimated that the Oceanside-to-Escondido project would generate approximately 4,884 direct FTE (full time equivalent jobs) and 6,667 additional secondary or indirect jobs resulting form the project. The EA/EIR, prepared in October 1996, estimated this number based on a lower capital cost therefore the number would be even higher. The operation and maintenance of the project is expected to generate approximately 170 on-site jobs in the transportation industry and about 53 direct of-site supporting jobs. The multiplier effect would provide an additional 304 indirect jobs.

Other Comments

The financial plan, as reported on the schedule and previous TCRP progress reports, for the Oceanside-to-Escondido Rail project has assumed using much of the State TCRP funds early in the project construction. This was to accommodate the federal process. The FFGA includes a schedule of federal funding based on cash flow needs, but the actual appropriations are subject to the annual Federal appropriation process. There are other mechanisms, however, to manage the cash flow, such as borrowing against the FFGA, if the State funds were delayed a few years.

Ø San Diego Bus Acquisition

(TCRP $7.7 million remaining to be allocated for NCTD)

Lost Economic Opportunities

The ability to use the State TCRP funds to purchase buses provides the ability to leverage other formula funding for use on other vitally needed projects. Some of the projects include construction projects and other service oriented programs. There is a finite amount of formula funds that are allocated to regions, which are then allocated to transit agencies. Decisions would have to be made prioritizing how the funds are spent. Either the purchase of buses would be delayed, or the construction and/or service program would be postponed or even cancelled.

Potential Dollar Value of Economic Loss

The direct economic loss is the $7.7 million that were to be used for the purchase of compressed natural gas buses. Without these funds, the purchase of the associated buses will likely be delayed for a few years. The loss of the procurement to the bus manufacturer would cause a domino effect, effecting employees, and eventually services used by the employees.

Potential Jobs Lost to the Region

As discussed above, if capital projects are canceled, contracts can not proceed and jobs would eventually be affected. There also could potentially be a loss to the employees at our transit agency. Receipt of discretionary funding, such as from the TCRP funding program, provides the ability to stretch scarce operating dollars, through the federal mechanism called preventive maintenance. Should funding become more and more limited, operating budgets are likely to be affected, thereby directly affecting employees of the transit agency and eventually services used by the employees.

Ø Double Track Projects

(TCRP: $21.6 million unallocated)

The December CTC meeting had included three allocation requests all in the city of Encinitas:

Encinitas Passing Track: $3.288 million

Leucadia Grade Separations PSR: $200,000

Pedestrian Crossings Along Railroad Corridor: $1.248 million

The Commissioners postponed all TCRP/STIP allocation requests until February.

The Encinitas Passing Track Project has $3 million in Proposition 116 funds for a total project of $6.288 million. This project was anticipated to begin construction in July 2003. The TCRP funding is needed to fully fund a project. A contract could not be awarded without the funding thereby the region would lose the project benefit and the economic benefit of the contract award. The loss of this contract would not in itself cause loss of jobs, but this along with reduced construction contracts would have an eventual effect and the associated service jobs.

The funding for Leucadia Grade Separation Project would be used to prepare the Project Study Report (PSR). There would be an eventual construction project that would provide an economic opportunity. The contract to prepare the PSR would have a slight economic impact.

The funding for Pedestrian Crossings in Encinitas would be used for preliminary engineering and environmental work. There would be an eventual construction project that would also provide an economic opportunity.

The balance of the TCRP funding slated to be used for Double Track projects would provide tremendous economic construction opportunities in addition to the project benefits that will be realized including reduced travel times, increased reliability and flexibility.

Large construction projects employ hundreds directly and indirectly. The cumulative effect of losing these large construction projects to the region would ultimately have an effect on the job market.

Ø Coaster Commuter Rail Train Set

(TCRP-Balance $927,000)

There is currently $927,000 remaining in this project, much of which is due to the vendor upon receipt of the rail cars due in the next couple of months.

Oceanside Transit Center Parking Structure

TCRP: $ .6 Million (unallocated)

STIP: $1.3 Million

ITIP: $2.7 Million

Lost Economic Opportunities

The Oceanside Transit Center Parking Structure would construct a three-level 450 space facility. The Parking Structure is part of the downtown transit-oriented development located at the Oceanside Transit Center (OTC). OTC is a multi-modal facility which accommodates NCTD fixed-route bus service; Greyhound inter-regional bus service; Amtrak, providing intercity San Diegan rail service; Metrolink, providing inter-regional commuter rail service between Oceanside and Ventura County; and the Coaster, providing commuter rail service between Oceanside and San Diego.

The City of Oceanside and NCTD have worked together for years in the pursuit of completing a funding package. The project budget contains various sources of funding including TCRP and STIP funds. Following approval of the 2002 STIP the project was fully funded and work is underway. This structure is vitally needed for the transit public and by use for the general public during non-peak transit times. It is also critical that the structure be completed by the Spring of 2004 as a lease for surface parking with a developer ends at that time.

The project funding also includes $3.2 million in federal funds. Of this amount, $2 million was obtained from the competitive and discretionary Federal Bus Program. The matching State funds are required before the federal funds could be used. Much of the TCRP funds have been already expended on engineering and environmental work. Should the STIP dollars be lost, other funding would have to be identified to match the federal dollars.

There would be a direct lost economic opportunity for the loss of the construction contract. There is would also be a loss of fare revenues generated from the transit systems, as well as the economic loss to the downtown business community due to the current and future parking constraints. The downtown business community includes restaurants, a movie theatre, various tourist shops, clubs etc. Transit riders and business customers are discouraged from using transit and the downtown businesses when there isn’t reliable parking available.

Potential Dollar Value of Economic Loss

The direct dollar value of the lost of the construction contract would be approximately $8 million. The lost long-term fare revenues and business opportunities would be significant to the region.

Potential Jobs Lost to the Region

With the loss of the construction opportunity, the associated direct and indirect jobs would be in jeopardy. The downtown businesses for the most part are very small in nature and with any business loss, jobs are certainly at risk.

Ø CNG Fuel Station

(STIP-$40,000 unexpended, under contract)

There is only $40,000 remaining unexpended from this allocation. The funds will be expended by June 2003.

Ø Coaster Maintenance Facility

(STIP- $9,000 unexpended)

The remaining $9,000 will be expended by June 2003.

Ø Del Mar Bluffs Stabilization-Project 1

(STIP remaining -$3.536 M unexpended, under contract)

The construction contract for this project has been awarded, work is underway, and slated for completion mid-summer.

Ø Del Mar Bluffs Stabilization- Project 2

(STIP-unallocated $754,000, $246,000 unexpended)

Lost Economic Opportunities

This State funding provides a 20% match to Federal Discretionary funding. The Federal funding comes from the competitive New Start funding program that required a minimum 20% match. Without the matching funding of $754,000, which has been programmed with STIP dollars, the federal funds in the amount of $3.0 million could not be used. The construction contract could not proceed until the project was fully funded.

This project will help to preserve intercity and commuter passenger rail service, as well as critical freight service by enhancing both safety and operational reliability of the rail corridor. The Del Mar Bluffs Stabilization Project 2 - Preserving Track Bed Support would focus on alternatives that stabilize the track bed and would be located at the toe of the Bluffs. The project will replace track bed support that has eroded, protect the bluff face and reinforce the bluff toe to prevent continuing erosion from storm wave action in risk to priority areas.

Potential Dollar Value of Economic Loss

The direct dollar value of the economic loss, unless other local funds were identified, would be the entire budget of $4.0 million

Potential Jobs Lost to the Region

A loss of this construction contract in the region, combined with the loss of other construction contracts could result in the loss of jobs.

Ø Encinitas Coaster Station Parking Extension

(STIP: $49,000 unexpended)

There is a very small amount of STIP dollars remaining on this project, however there is a federal match that is attached to this funds. Work on improvements to the parking surrounding the Encinitas Coaster Station is under development.

False Bay Passing Track

(STIP: $2.6 million unexpended, under contract)

The False Bay Passing Track Project is under contract and anticipated for completion June 2003.

Ø San Dieguito River Bridge

(STIP-$855,000)

This phase of the project is for preliminary engineering and environmental work. The future phase, which is not yet funded would have a much greater effect on the economic opportunities.

The economic loss would be to the design firm. The loss of this work alone would likely not result in any job loss. Of course the cumulative affect of lost professional service opportunities

would result in the loss of jobs.

An allocation request for the STIP funding had been request for the January CTC meeting.

Ø Santa Margarita River Bridge

(STIP: $2.46 million unexpended)

An engineering contract has been awarded for this work which is anticipated for completion by December 2003.

Ø Sorrento-to-Miramar 2nd Track and Curve Realignment

(STIP- unallocated $27.990 million)

Lost Economic Opportunities

The Sorrento-to-Miramar 2nd Track and Curve Realignment Project currently has $27.990 million of unallocated STIP dollars. Total funding was for the project was $31.717 million. Expenditures have previously been made on engineering, environmental review. The remaining funds would be used for right-of-way acquisition and constructions costs. The lost economic opportunity would be related to the both of these activities as they would be bringing dollars back into the economy.

The purpose of this project, located on the San Diego portion of the LOSSAN corridor, is to improve the railroad right-of-way for all of the users: the Coaster, Amtrak, and Burlington Northern and Santa Fe (BNSF). The project would reduce travel time, increase reliability, and add flexibility. These benefits would increase ridership for Amtrak and the Coaster and thereby generate more revenue. BNSF operates all freight service on this portion of the railroad with 4 to 12 trips per day. The railroad is the only viable rail link between San Diego and the rest of the nation, and the Port of San Diego is one of the major customers of BNSF freight service. Making improvements to the railroad allows reliable transport of freight, which is vital to the economy in San Diego.

Implementation of this project, accumulated with other double track projects, would eventually provide the mechanism to add more trips in the corridor, both passenger and freight, thereby providing another increase to the economy.

Potential Dollar Value of Economic Loss

There would be a direct dollar loss associated with the loss of the construction contract, which is currently estimated at over $27 million. There would also be a loss associated with the purchase of the right of way. The long term economic loss is unknown, but would be quite significant.

Potential Jobs Lost to the Region

This is a sizable contract, which would provide employment to 90 employees for a period of two and one half years. The indirect jobs associated with this job using a 1.4 multiplier would be 124. If these jobs were instead lost to the region, there could potentially be an associated loss of jobs in the service and goods industry.

Ø Track Structure Rehabilitation

(STIP: $115,000 unexpended)

The NCTD Board will be taking action to award a contract to repair a railroad bridge over the Agua Hedionda Lagoon in the next month or two. This work would be completed by June 2003.

San Joaquin Council of Governments

More than $235 million STIP money and $32 million TCRP money are allocated to San Joaquin County. Potential cutbacks on these transportation fundings will be devastating both for the transportation system and for the economy.

STIP and TCRP are crucial in funding vital transportation projects in San Joaquin County, such as:

I-205: This is the major inter-regional corridor connecting to the Altamont Pass leading to the San Francisco Bay Area. The traffic volume on I-205 is approaching the designed capacity and immediate improvement is imperative to maintain the well-being for the San Joaquin and San Francisco Bay Area regions.

I-5 Mossdale: This is the bottleneck segment where I-5, I-205 and SR-120 merge. It is projected that the traffic volume will approach its designed capacity in the very near future. Congestion at this “bottleneck” will certainly cast significant negative impacts on I-5, I-205 and SR-120.

SR-99: SR-99 is the single main corridor connecting all major Central Valley metropolises, which is also currently one of the most congested freeways within San Joaquin County. The improvement on SR-99 will benefit not only San Joaquin County but also the entire Central Valley.

Transportation improvement funding cutbacks can also significantly damage local and regional economic vitality. The total funding of STIP and TCRP projects will create over 11,000 to 15,000 total full-time equivalent jobs for San Joaquin based on FHWA’s estimate (42,100 total full-time equivalent jobs per $1 billion funding.) In addition, this will stimulate spending in local economy and create millions in potential earnings, federal, state and local tax. This is already a conservative outlook without regarding the broader economic stimulating effects by high employment and more spending.

Santa Cruz County Transportation Commission

Potential impacts to region if STIP projects delayed or eliminated

SC 1 Santa Cruz Multimodal Station - This project has already spent $2.1

million in STIP funds. The project has $3 million in Prop 12 funds will

be lost if a contract is not awarded by July 2003.

Metro Bus replacement - The buses purchased with TCRP funds will be

received by the Metro district in the next 2 weeks. A final invoice

needs to be submitted to expend the $3 million in TCRP funds. These

buses are necessary to replace aging buses in the Metro fleet.

Hwy 17 Bus Purchases - Buses are due to arrive later this month. $3.7

million in TCRP funds will needed in the next month. These buses will

serve to link Santa Cruz workers to the Silicon Valley employment

centers. Currently 19% of workers commute to areas outside Santa Cruz

County with a majority traveling to Silicon Valley and Bay Area.

Shasta County

Potential impacts to region if STIP projects delayed or eliminated:

These projects total $273,846,000 dollars over the next 10 years. These projects are essential to the following economic plans or areas: The Redding Downtown Revitalization Plan, ShastaTech Redevelopment Plan (Redding Airport area), Redding Industrial Park, Redding Convention Center, Turtle Bay Park and Museum, Cypress Avenue Retail Corridor, Goods Movement from Interstate 5 to the Northcoast.

These projects would result in direct and indirect economic effects totaling over $2 billion dollars over 10 years to both the state and region. These projects would create 12,500 full-time jobs (annual equivalents) or 1,250 full time jobs for 10 years.

Tehama County

We currently have $19 million programmed in the STIP with $4 million allocated. Including “other” funding, Tehama County’s programmed amount is $48 million. We currently have $4 million in STIP money allocated with another $6 million scheduled to be requested before July 2004. Our request for STIP money beyond July 2004 equals $10.5 million.

It should be noted that some projects are in progress even though the “allocated STIP amounts” portray a zero value. This is due to the fact that other funding sources, such as federal and local funds, have been utilized for preliminary project components. These projects include: PPNO #2148 Bowman Road @ Cottonwood Creek Bridge, PPNO #2378 Jelly’s Ferry Bridge Replacement, PPNO #2379 Evergreen Road Bridge Replacement, PPNO #2150 Rawson Road Bridge @ Thomes Creek and PPNO #2149 Rawson Road Bridge at Red Bank Creek.

Any reduction in STIP funding to Tehama County will result in job losses and economic hardships. Additionally, project delays or project elimination will only exacerbate the deteriorating condition of the under-funded transportation system in our region.

Tulare County Transportation Commission

SOCIO-ECONOMIC IMPACTS TO TULARE COUNTY WITH STATE PROPOSED BUDGET CUTS TO STATE FUNDED TRANSPORTATION PROGRAMS

Traffic Congestion Relief Program (TCRP)

Tulare/Kern SR 65 Widening- This project entails the widening of a two-lane State Route to four lanes in Tulare and Kern counties. It has the potential for a destination route alternative to SR 99, for goods movement, commuters and tourism from southern California. It is expected that the loss of $9,135,000 in funding will significantly impact Tulare County, a county already experiencing one of the highest poverty rates in the State. The creation of 152 jobs, an economic boom and dollars (in the millions) being able to be reinvested into the communities of Tulare and Kern counties will not commence due to the project’s loss of state funding.

State Route 198 Widening- This project entails the widening of SR 198 from SR 43 (Hanford) to SR 99 (Visalia). SR 198 will be a major east-west connector in the central valley to the two major north-south travel corridors (I-5 and SR 99). This is important to tourism, commuters and the goods movement. It is expected that the loss of $22,890,000 in funding will significantly impact Tulare County, a county already experiencing one of the highest poverty rates in the State. The creation of 381 jobs, an economic boom, and dollars (in the millions) being reinvested into the communities of Tulare and Kings counties will not commence due to the project’s loss of state funding.

Goshen Pedestrian Over-crossing- This project will provide a safe crossing of SR 99 for school children, while eliminating transporting the children with school buses thereby reducing traffic congestion in an already congested area. It is expected that the loss of $4,271,000 will significantly impact Tulare County, a County already experiencing one of the highest poverty rates in the State. The creation of 71 jobs, an increase in traffic safety, reduction of traffic congestion and air quality will not commence due to the project’s loss of state funding.

Cross-Valley Railroad Project- This project will improve railroad infrastructure allowing a more efficient movement of goods. It is expected that the loss of $5,115,000 will significantly impact Tulare County, a county already experiencing one of the highest poverty rates in the State. The creation of 85 jobs, an economic boom, and dollars (in the millions) being reinvested into the communities of Tulare, Kings, and Fresno counties will not commence due to the project’s loss of state funding.

Summary

Tulare County, with a population of 368,000, has the second highest poverty rate in the State. Any cuts in funding of the above mentioned transportation projects would have a significant effect on the county and its eight incorporated cities. An estimated 41 million dollars and 689 construction jobs (1378 jobs with a multiplier effect) will be lost to the region.

State Transportation Improvement Program (STIP)

Various road rehabilitation projects (9)- These projects maintain existing travel corridors. It is expected that the $6,849,000 loss in funding will significantly impact Tulare County, a county already experiencing one of the highest poverty rates in the State. It is estimated that 114 jobs will be created from the various projects, which in turn, stabilize the county economy.

Various road-widening projects (9)- These projects improve and make efficient movement of vehicles and goods on the existing travel corridors. It is expected that the $54,421,000 loss in funding will significantly impact Tulare County, a county already experiencing one of the highest poverty rates in the State. It is estimated that 907 jobs will be created from the various projects, which in turn, will stabilize the county economy.

Various safety/operations improvement projects (4)- These projects will provide safety improvements to the existing travel corridors, making a safer roadway. It is expected that the $2,437,000 loss in funding will significantly impact Tulare County, a county already experiencing one of the highest poverty rates in the State. It is estimated that 40 jobs will be created from the various projects, which in turn, will stabilize the county economy.

Intermodal facilities (3)- These facilities will provide a central point of location for various transportation modes to come together and then disperse, creating connectivity and efficient and organized travel. It is expected that the $9,219,000 loss in funding will significantly impact Tulare County, a county already experiencing one of the highest poverty rates in the State. It is estimated that 154 jobs will be created from the projects, which in turn, will stabilize the county economy.

Summary

Tulare County, with a population of 368,000, has the second highest poverty rate in the State. Any cuts in funding of the above mentioned transportation projects would have a significant effect on the county and its eight incorporated cities. An estimated 73 million dollars and 1215 construction jobs (2,430 jobs with a multiplier effect) will be lost to the region. With both programs cut, there would be the potential loss of federal and state income tax as high as 27 million dollars.

Assumptions:

1. Assumes every $60,000 creates a job per year, of which $50,000 goes to labor costs

2. Assumes the multiplier effect is two support/service job2 created per one construction job created

3. Marginal federal tax rate on earnings is 27%, which includes social security tax

4. Marginal state tax rate on earnings is 8%

5. Assume average salary and wage is $20,000

Ventura County Transportation Commission

Identify lost economic opportunities.

Goods Movement - loss of $6 million in improvements for access to Port of Huememe (the only deep-water port between L.A. and Bay Area), plus $15 million in projects improving freight railroads.

Education - loss of $44 million in work to provide adequate access to new Cal State Channel Islands University campus. This work is a prerequisite to completing campus.

Safety / Seismic - loss of $11 million to enhance safety of Metrolink and Amtrak, including crossings improvements and structure seismic retrofit.

Identify potential dollar value of economic loss.

Potential economic loss (include STIP, TCRP, and Statewide TEA projects) = $652 million

NOTE: Potential loss of STA funds would create $1 million hole in Ventura County's operational funding for Metrolink.

Identify number of potential jobs lost to the region.

Potential job loss = 15,000