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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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
byS
erg
ioR
uiz
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
gtt
a
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
MORE FOR LESS 15
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
naly
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wit
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up
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eeA
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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.
Ph
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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
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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
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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
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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.
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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