Busway costly but no budget breaker

first_imgMTA officials say the Metro Orange Line is on track to be finished within agreed spending limits, but upgrades to the Canoga Avenue Park-and-Ride lot could push spending slightly beyond the 14-mile busway’s original $330 million budget. Despite tricky construction setbacks, including a court-ordered shutdown and one of the rainiest winters in 100 years, officials of the Metropolitan Transportation Authority believe the line will be finished with money to spare. That would be a marked improvement from the financially disastrous days of subway building in the 1990s. “I think we’re going to finish within the budget and have some money left over,” said Roger Dames, the MTA’s project manager. “How much? It’s too early to say. I think overall it’s going to be a financial success.” But the wild card remains the $26 million Park-and-Ride lot and the busway extension on Canoga Avenue, which now includes a revised route and station and could come in over budget because of rising construction costs. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWalnut’s Malik Khouzam voted Southern California Boys Athlete of the Week A contractor for the project has not even been hired yet. In 2003, when the MTA approved the Orange Line’s original $330 million budget, $16 million was set aside for the Park-and-Ride lot. But an additional $10 million was earmarked this summer when officials decided to expand the original scope to include a station and a new route. In addition to the Park-and-Ride expansion, MTA officials face unresolved change orders and claims for the Orange Line, although they are confident they can cover those costs. As construction wraps up in advance of Saturday’s opening, $14 million is left in contingency funds to handle more than 40 outstanding change orders, valued at $4.2 million, and an undisclosed number of outstanding claims, according to reports and interviews. If all spending is tallied – for example, costs for 20 years of planning, a $10 million bikeway and the $89.6 million spent in 1991 to buy the Southern Pacific right-of-way that has become the busway route – the Orange Line’s price tag would exceed $440 million. Still, the Orange Line turned out cheaper than the Metro Gold Line, which travels the same distance but cost twice as much. And it’s a far cry from the more than $4.5 billion taxpayers paid for less than 17 miles of subway on which cost overruns were so severe the MTA was ultimately forced to shut down all subway construction. Officials in the Federal Transit Authority, which monitors MTA’s rail construction spending but has only informal monthly reviews of the Orange Line project, appear satisfied with the MTA’s handling of this busway construction. “Based on our oversight, we’re pleased with what we see now,” said the FTA’s Ray Tellis, project manager in Los Angeles. The Orange Line started as a simpler project than MTA’s past rail lines, but quickly ran into trouble after construction started in late 2003. First there was contaminated soil underneath the old rail line that had to be tested and hauled away. Then, in the summer of 2004, the agency started losing $70,000 a day under a court order to shut the project down for nearly a month after a residents’ group filed a lawsuit claiming environmental review had been inadequate. No sooner did construction resume after the court lifted the ban than the rains started in what would become the second rainiest season on record in Los Angeles. The MTA paid for such unforeseen costs from the $32 million contingency fund that was part of the original budget, drawing down $10.8 million for change orders so far and $7.5 million to get the work back on schedule. As a general rule, even if a project exhausts its contingency fund and closes out 5 percent higher than the original budget, that is considered acceptable, analysts say. That’s the standard used in Los Angeles Unified’s current school building program. Tom Rubin, a former Los Angeles transit official who advised the residents in their lawsuit and now works with the school district’s bond oversight committee, said the MTA benefited from getting a great deal on the contract before construction costs skyrocketed with global demand for building materials and the Gulf Coast hurricanes. “In some ways they were very, very fortunate. There have been huge cost increases… It is a huge, huge problem affecting everybody now,” he said. “Timing is everything.” In fact, MTA officials were so intent on securing the $150 million contract with the joint-venture Shimmick/Obayashi, $45 million less than the next-lowest and about to expire – that CEO Roger Snoble signed the contract as soon as he stepped off a plane from Sacramento, where he had won funding. The contractor utilized the design-build method being debated this year in Sacramento as a way to speed up road work, but opposed by unions. That main busway contract has now grown to about half the total Orange Line budget. Of the remainder, $15 million is for new buses; $36 million for environmental documents and new traffic signals, $17 million for business relocation; and $48 million for professional services, as well as other costs. The Orange Line was funded almost equally from the 1 cent sales tax that Los Angeles County shoppers pay and from state funds, with some federal funds. However, when the state budget crisis halted transit spending a few years ago, the MTA decided to take out a $98 million loan to get the project started, with the promise the state would repay. Lisa Mascaro, (818) 713-3761 [email protected] 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img read more