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  • Tampa to Orlando High-Speed Rail: Keeping Promises to Taxpayers?

    Florida’s Tampa to Orlando high-speed rail project could be barreling down the tracks toward taxpayer obligations many times the $280 million currently advertised. That is the conclusion of my Reason Foundation report, The Tampa to Orlando High-Speed Rail Project: Florida Taxpayer Risk Assessment.

    The 84 mile, purportedly $2.7 billion project is administered by Florida Rail Enterprise (a part of the Florida Department of Transportation) and would be built by a private builder/operator selected through a competitive process. There are a number of reasons to believe that there is slim prospect of limiting the obligation of Florida taxpayer to the promised $280 million.

    Capital Cost Overruns: The International Experience

    The international experience indicates that Florida taxpayers will indeed be fortunate if the bill is only $280 million. A team led by Oxford University professor Bengt Flyvbjerg found that passenger rail systems typically have cost overruns of 45 percent. Such a cost overrun would increase the bill for Florida taxpayers to $1.5 billion.

    Capital Cost Comparison to California

    However, the capital cost overrun could be even greater. The Tampa to Orlando line cost per mile is less than half that of the first segment of the California high-speed rail line, despite factors that should make the Florida line more expensive..

    In California, there is a concern that the eventual $45 billion or more required to complete the 500 mile route may not be obtained. As a result, the first segment (Borden to Corcoran in the agricultural San Joaquin Valley) is being built so that it can be used by the existing Amtrak service should the high-speed rail line not be fully completed.

    Thus the shorter $4.2 billion California segment excludes various elements that will need to be upgraded later for high-speed rail trains to operate. The $4.2 billion does not include the funding for trains, electric power infrastructure, train yards, train maintenance facilities and administrative facilities. More of the construction will be in agricultural and rural areas than in Florida which will tend to make the California project less costly. There will be only two “Amtrak” quality stations, as opposed to the five far more expensive high-speed rail stations on the Tampa to Orlando line.

    For example, Florida Rail Enterprise characterizes the potential Tampa station as having the “potential to be one of the most visible, dominant and iconic architectural features of the city.” This hardly suggests a process driven by cost control.

    The Tampa to Orlando line does have two cost advantages relative to the California line, including that right-of-way has largely already been obtained and that there will be less construction on viaducts. These factors however, seem unlikely to compensate for the elements that are excluded from the California costs.

    The Tampa Orlando high-speed rail line would cost $3 billion more if its cost per mile equals that of the California segment. All of these additional costs would be the responsibility Florida taxpayers and would raise their bill to nearly $3.3 billion (Figure).

    International Research: Subsidizing Operating Losses

    There is reason to believe that the line will suffer day to day operating losses, despite claims of Florida Rail Enterprise to the contrary.

    Just as the international research indicates costs are often understated, ridership and revenue is often overstated. Flyvbjerg’s team found that projections were, on average, 65% higher than the eventual actual ridership. If the Tampa to Orlando line were to match this average, Florida taxpayers would have pay $300 million more just over the first 10 years of operation to make up for operating losses. This would raise the bill for Florida taxpayers to $3.6 billion ($3.3 billion plus $300 million) with more likely after 10 years.

    The Tampa to Orlando Market: Operating Losses

    The Tampa to Orlando high speed rail line may not achieve even the already discounted average ridership performance evident in the international research. This would mean an even greater revenue shortfall and more in bills for Florida taxpayers.

    The Tampa to Orlando line will provide virtually no intercity travel time advantage compared to the car. It will, in fact, cost more than driving. It will cost a lot more in the likely event that an expensive taxi ride or a car rental at is required the destination. Even so, the ridership projections can be characterized as stratospheric. Florida Rail Enterprise assumes two thirds of the ridership of Amtrak’s Acela Express on the Northeast Corridor, despite the fact that the Acela market has eight times the population of the Tampa to Orlando market.

    Moreover, the Tampa to Orlando line will operate at average speeds 34 to 70 percent below that of high-speed rail trains in China, Japan and France. This is because the train will operate as a local shuttle between the Orlando International Airport, International Drive and Walt Disney World.

    The Bottom Line

    These risks combine to threaten Florida taxpayers with many times the claimed $280 million cost, like Massachusetts taxpayers, who were forced to pay much of the $16 billion in cost overruns on the “Big Dig” highway project. The risk to Florida taxpayers would be in contrast to the billions Governor Christie is saving New Jersey taxpayers by cancelling the “Access to the Regional Core” Hudson River tunnel for which costs were spiraling, consistent with the international research.

    Choices

    This would seem to be no time to saddle already overburdened taxpayers with additional and predictable obligations. Obviously, Florida taxpayers could be spared these risks by canceling the project.

    However, the lure federal funding could prove to be irresistible. If so, the state should provide ironclad provisions to limit taxpayer subsidies to the promised $280 million. The builder/operator should assume all financial risks and there should be no state financial guarantees. Further, megaprojects like the Tampa to Orlando line can be “too big to fail,” and it could be nearly impossible to stop construction once it is started, even as costs balloon. Thus, only the independently operable Orlando tourist shuttle segment (Orlando International Airport to International Drive and Walt Disney World) should be initially built. The extension to Tampa could be built later in the unlikely event that there is enough left of the $2.7 billion.

    Keeping Promises

    These decisions will soon be made by newly elected Governor Rick Scott, whose has stated that his evaluation will be driven by the impact on Florida taxpayers.

    Doc Dockery, former chairman of the now-defunct Florida High Speed Rail Authority and financier of a now repealed constitutional amendment that required building high speed rail has “pooh-poohed” the risk of cost overruns, noting that the Florida Department of Transportation “has said repeatedly” that any bidder must “give a fixed price. This means no cost overruns.” He continues, “how can this be more plainly stated?” Regrettably, the experience reveals the rhetoric to fall far short of what is required to protect taxpayers.

    If construction proceeds, the Governor and state will be exposed to an over-whelming challenge to keep the $280 million promise to taxpayers. If they succeed, it will be a first. Chances are they won’t.

    Photo: Concept for “iconic” Tampa station. Available at floridahighspeedrail.org.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

  • Presidential Travel: Around the World in Eighteen Hours

    As a corrective for the struggles of American diplomacy, I am surprised that no one has proposed mothballing Air Force One. The jet of state is almost the perfect symbol of modern presidents, who fly around the world as if on a magic carpet, but come home with little more than passport stamps. In recent months, President Obama has flown to Indonesia, India, South Korea, Japan, Portugal, Iraq, and Hawaii, but, other than for his Christmas vacation, the reasons for any of these trips are a blur.

    The hope is that presidential frequent flyer miles can be redeemed for peace, prosperity, and global harmony. Instead, we seem to have traded the miles for undeclared wars, ballooning national debt, and diplomatic unease. Do the WikiLeaks sing songs of success?

    Not every president has felt the need to adopt the persona of an international courier. Until Teddy Roosevelt visited the Panama Canal, no sitting president ever left the country. (It just wasn’t “done.”) The designation “Air Force One” dates to the Eisenhower administration. In the last thirty years of his life, Thomas Jefferson never visited a northern city. When he traveled in Europe, it was with one servant and his notebooks. But some presidents were more eager to wander.

    During his entire lifetime Abraham Lincoln never left the United States, although twice as a young man he journeyed down the Ohio and Mississippi rivers, from Kentucky to New Orleans — the future president as Huckleberry Finn.

    To negotiate the Peace of Paris after World War I, Woodrow Wilson spent almost six months in France, where he was greeted by rapturous crowds. On location, he only muddled the disastrous peace at Versailles. (“Making the Hun pay…”) On his return to the U.S., however, he failed to persuade the Senate to ratify the treaty.

    Other presidents have traveled to escape the clouds of scandal. With his popularity ebbing, Warren Harding went on a tour of the Pacific Northwest (avoiding Teapot Dome, Wyoming), and Richard Nixon clogged the streets of Egypt and Romania during the depths of the Watergate scandal.

    John F. Kennedy, before his election, traveled like a foreign correspondent. In 1951 he journeyed, often by car, for twelve weeks, first from England to Yugoslavia, and later from Israel to Pakistan, India, Indochina, and Korea.

    Without a doubt, FDR was the most courageous presidential traveler. He spent countless days at sea, crossing the Atlantic during World War II, when there was the high chance of a U-boat attack. Unable to walk, Roosevelt was often winched from one rocking destroyer to another, in the middle of the rough ocean. He persevered to attend conferences in Casablanca, Argentina, Tehran, Malta, and Cairo.

    Although Harry Truman is remembered for giving entrenched interests “hell” off the rear platform of a private railroad car, what he liked most were road trips. Matthew Algeo’s Harry Truman’s Excellent Adventure is an account of how, after his presidency ended, Harry loaded Bess into the family Chrysler and drove her from Independence, Missouri, to New York and Washington, DC. They stayed in motels along the way, and he paid for his own gas.

    George W. Bush always looked like a reluctant traveler, only comfortable shuttling to Camp David or his ranch in Texas. By contrast, Teddy Roosevelt was not just a traveler, but an explorer. After his presidency he embarked on epic journeys across Africa and South America, nearly killing himself up the Amazon River.

    How does Barack Obama fare as a traveler? I read somewhere that he is gracious in his encounters with troops stationed abroad, and that speaks well for his compassion. On his diplomatic missions, though, he seems to travel in circles, and to be impatient with a world not always so adoring.

    In November 2010, he flew from Washington to India, and then to summit meetings in South Korea (which went nowhere). No sooner was he back in Washington than he flew to Lisbon for a NATO summit. A week later he went back to Asia, in the dead of night, this time to Afghanistan. He spent all of four hours there on the ground. Why fly thirteen hours to Afghanistan and miss seeing President Karzai, only to head directly back to Washington?

    Couldn’t his schedulers have doubled up on some of these excursions? After all, it costs $181,000 an hour to fly Air Force One, and millions more for the cavalcade.

    As an international traveler, Obama strikes me as being like many American executives who zip in and out of Europe as though it were St. Louis, and who always need to be back in Washington by Friday afternoon. Obama has made more foreign trips, for his time in office, than any other president. To what end?

    In 2009, Obama went twice to Copenhagen, in the space of about ninety days, first to lobby for Chicago’s chances at Olympic swag, and then to lecture the developing world about carbon emissions. (This from someone who travels with an entourage of about seven hundred, chaser jets, and a motorcade caravan worthy of a sheikh.)

    On his first trip to Copenhagen (for less than a day), the Olympic committee was indifferent to the presidential fly-by, which no doubt disappointed the Daley brothers, who were hoping for some Olympic-sized contracts in Chicago. Some weeks later at the climate change conference, an obviously jet-lagged Obama burst in on the Chinese, jawboned for a while (in the manner of Basil Fawlty), and went back to the airport with little to show for the carbon emitted.

    If global warming is such an important issue, maybe he could have stayed the weekend in Copenhagen? A week earlier he had flown in and out of Oslo. He was there for twenty-six hours, to collect the Nobel Prize, but in his rush he snubbed the Norwegian king.

    Last November, when the president went to India for three days, he took with him six armored cars and about forty planes, not to mention a naval fleet stationed off Mumbai. That’s along with the four chefs, food tasters, helicopter pilots, schedulers, stewards, generals, spin doctors, secret service officers, fifteen dogs, and Washington officials that numbered in the hundreds. The travel costs were estimated at $200 million. You tell me what was accomplished. Maybe he needed the miles to get to Hawaii?

    Photo by http2007 Thierry of Air Force One at the Prima Air & Space Museum in Tucson, Arizona.

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland and travels under the motto that, “A good hotel is never good enough, but a bad hotel is a joy forever.”

  • Self-Employment Key to Expanding Rural America’s Revival

    In many ways, these are the best of times for rural America. Rising commodity prices for food, fiber and energy have revived the economy in much of the nation’s heartland. But still, many rural communities still are losing population, particularly among the young, and suffering unacceptably high rates of poverty. What accounts for this “best of times, worst of times” scenario?

    Part of the problem lies with the highly productive nature of industries like agriculture, which now require less and less human input. In addition, the U.S. economy has undergone, and continues to undergo, structural changes beginning with the 2001 recession and continuing today. Permanent employment growth among America’s largest employers began stagnating before the 9-11 (2001) recession. During the recovery, the share of U.S. employment by America’s largest employers declined from 34% to 26% (or by -24%) of all employment (youreconomy.org). This trend coincided with the movement among large corporations to outsource work. Jobs that in the past would have been filled by permanent, salaried-with-benefits employees are today contracted out, allowing firms to lower legacy worker costs and increase workforce flexibility.

    This slower rate of job creation may be structural and permanent, not just part of the recession and recovery cycle. Coping with these changes will most likely require an expansion of small-scale entrepreneurship, enabling rural residents to enjoy the quality of life benefits of “rural living” and also to tap economic opportunities. Some of these opportunities are even created by the outsourcing of work by larger employers. Our work with the RUPRI Center for Rural Entrepreneurship over the past 10 years suggests that the rise in self-employment – small-scale entrepreneurship – and slow job creation are related and could present a development “silver lining” opportunity for many communities in the United States.

    The potential behind this phenomenon can best be observed in the rise of necessity entrepreneurship. Necessity entrepreneurs are driven into business by the lack of jobs in their region – many clearly would prefer to take a job if those opportunities were available. But, once in business, these entrepreneurs could help create the foundation of a whole new generation of ventures that will help re-invent and renew the rural American economy.

    Fortunately, the trend towards small, “microenterprise” has been evolving for a generation. Over the past decade, the number of Americans who are self-employed has risen by 4.3 million. The percentage of the American workforce that is self-employed has risen from 2.5% of all workers in 1993 to 7% in 2008 based on research from the Edward Lowe Foundation (www.youreconomy.org).

    Why is this important for rural places and how might this shape rural development strategies?

    Freedom to Choose. For one thing, entrepreneurs have far greater freedom to live where they want, including in rural towns and the countryside, and still make a living in our outsourced economy. Our work, particularly across the heartland, suggests that communities can stimulate development and growth by acting upon this emerging trend. The key to success appears to be rooted in an integrated strategy that emphasizes and preserves rural quality of life and values while at the same time creating a strong and supportive entrepreneurial environment.

    Rooted Economic Opportunity. Self-employment – creating your own job – represents an opportunity for rural places to intentionally connect strategies to improve “quality of place” and “economic development”. We are seeing rising interest in designing community development strategies that include targeted “people attraction” in combination with efforts to create jobs and career pathways brough on by transplanted entrepreneurial ventures.

    Social & Economic Renewal. The lament in rural communities and in rural policy circles has been the “brain drain” or the perceived loss of the “best and brightest.” Based on our field research throughout North America we would argue that the dominate group leaving rural areas are not necessarily the best and brightest, but those with a greater capacity for taking risk. This distinction is strategically important in that losing risk takers erodes a community’s fundamental capacity for innovating and embracing necessary change. Attracting entrepreneurs introduces “change agents” back into declining rural communities. This introduction enhances social and economic renewal.

    There are rural communities across the Heartland that illustrate this transformation including larger communities like Dickinson, North Dakota, Kearney, Nebraska and Salina, Kansas. But the emerging success stories are not restricted to the larger of the rural communities and include very small communities like Rawlins County, Kansas (population 2,425), Chase County, Nebraska (population 3,625), Valley County Nebraska (population 4,108) and Linn County, Missouri (population 12,606). Rawlins County is a particularly important example in that this community has over the last 15 years embraced a development strategy focusing on both entrepreneurship and people attraction with impressive emergent results. Rawlins County has begun to rebuild a more dynamic and competitive economy via area entrepreneurs, dramatically improved its migration balance and stabilized the decline in student enrollment through the attraction and retention of younger families. (Read more about the Rawlins County story.)

    More work needs to be done to fully understand these trends. Further clarification on how communities can act on them to build brighter futures are suggested below:

    Necessity Entrepreneurs. There is a compelling need to learn more about the size and nature of rising numbers of self-employed and necessity entrepreneurs. This research needs to be national in scope, but with detail at regional and community levels as well. Deeper understanding can form the basis of better development strategies.

    Targeted People Attraction. More and more communities are exploring people attraction. There is considerable room to learn more and build more targeted and effective strategies. Current efforts need to be documented and evaluated. Promising practices need to be tested and developed.

    Necessity to Opportunity Entrepreneurs. Lack of job opportunities is driving more people to necessity entrepreneurship. But necessity entrepreneurship can become a personal trap and a dead end strategy for communities. We need to learn more on how the increasing pool of necessity entrepreneurs can grow into a new generation of opportunity entrepreneurs who can create greater long term, sustainable economic prosperity.

    Don Macke is Co-founder and Director of Strategic Engagement, RUPRI Center for Rural Entrepreneurship.

    Photo by Tom Haymes

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  • GIS and Online Mapping: Stretching the Truth Scale

    When I began my land planning career in 1968, one of the first things I learned about was the use of the Rubber Scale. What is it? Rubber Scale was a term used by civil engineers and land surveyors to describe an inaccurate plan that ignored the physical limitations of the existing terrain. To say that the planner or architect had used a Rubber Scale to create a beautifully rendered plan with pastel colors and soft shadows cast from tree stamps was a negative comment, since these plans were pretty much worthless to the engineer and surveyor that had to make the plans conform to regulations. Because the lines were hand drawn back then (and in many cases still are today), accuracy was, and remains, an issue.

    I was guilty of “stretching the scale” to maximize density, thus the term. The rubber scale was beloved by designers who wanted to look good to their developer clients. The developer expected a plan that maximized yield, and a plan that was of a higher density than they expected would surely be pleasing. Of course, these plans had no basis in reality. Ultimately, the land surveyors and civil engineers would lose the units we falsely claimed, and they would also get blamed for the density loss!

    Fast forward two decades to 1988, when GIS (Geographic Information Systems) began gaining market share. Government agencies (typically cities and counties) embarked on spending sprees with the promise of a new era in planning technology brought on by the advent and proliferation of the GIS technology, which blended graphic mapping information with a data base. You wanted to know property information, demographics, soil types? Just query the map. The sales teams of GIS mapping systems convinced those in charge of purchasing that “parcels” shown on the map could be traced quickly from a variety of sources, then later “rubber sheeted” into accurate surveyed section corners. As if by magic, inaccurate parcels would be made precise.

    So— early, existing hand drawn maps were traced into a computer, and the imprecise data was made even more imprecise. Even when the data came from aerial maps, created by flights several thousand feet above the surface, the accuracy was at best within three to five feet of actual location. What happens to curved boundary lines if the map is stretched to meet tens of thousands (or more) of lot corners, with all four section corners set accurately? The answer is, of course, a map that would be impractical to correct at a later date. Very few GIS maps exist today that were done using accurate land survey from the beginning.

    Fast forward another two decades and more to today, when Google Earth and its rivals, MapQuest and BingMaps, have unfortunately become the basis for site information. Call the data of these suppliers “on-line graphics”. There are a variety of software systems that boast that site layout can easily be done using on-line-graphics, or simply using the available on-line GIS mapping data.

    Here lies today’s problem: None of this information is likely to be accurate enough to be useful to an engineer or surveyor who ultimately must put their license on the drawing, guaranteeing its accuracy.

    GIS salesman make their sales commissions by convincing the world’s governments that data can be “adjusted” later to a more accurate data structure. This is true, but not economically feasible or practical. Since curved property lines are represented in a GIS system by a series of miniscule lines, it could be possible for the data to be corrected. This is like saying that it could be possible to temporarily build an approximate building and later on move walls to the locations shown on the plan. It would be possible, yes, but hardy cost (and time) effective.

    A lack of correct information is a huge problem when using GIS or on-line-graphics information. For example, it’s not possible to see contour lines that are accurate enough to determine flood plain, wetlands, or other information critical to the initial site design. Even when this information is shown on the city or county on-line map, what is the source of that data? Most of these maps are sourced to the lowest bidder. Was that wetland shown on the site just something that looked wet on an aerial map traced by a low-bidding draftsman, or was the wetland defined by an environmental expert who accurately surveyed it and somehow placed it precisely on the GIS map? This is the modern day version of using a rubber scale to measure the very data used to make decisions. Entire cities are stretched beyond practical use by surveyors and engineers.

    Many think that the on-line-graphics are taken from a satellite in space with some military camera that spy agencies use. Wrong! The images are derived from aerial mapping firms. These photographs might be several years old, which is why you might look at a newly developed suburban area, while the map still shows a farm field. You could be looking at a site to build residential units, not realizing a sewage treatment plant was recently built next door.

    Building Information Modeling (BIM) is a way for architects, engineers, contractors and owners to communicate and collaborate while designing a structure they are all involved in creating. The various parties can be instantly communicating worldwide on a single project located anywhere. Recently, I was participating in an on-line conference from one of the suppliers of BIM technology, who wanted to sell me on the idea of using BIM as an additional tool to use with our precision site design software. I require a developer to furnish us with an accurately surveyed boundary, topography, and any wetlands delineated precisely on the site before I begin my work. The BIM supplier took an office building from Florida (created accurately), and placed it on a site in South Dakota shown by Google Maps as if somehow that’s all there is to planning. Nowhere in the conversation did the salesman mention local regulations, site restrictions, where any easements might be (most often easements are not easily seen in photographs), etc. As soon as I was shown how a building from Florida could be placed on a site in a northern state using an on-line-graphics data base as the planning solution, the demonstration was over. Could BIM be used for site design? Absolutely, but only by using precision data from qualified engineers and surveyors, not on-line-graphics.

    The tax payers have financed billions of dollars worth of GIS systems with map data of questionable accuracy, with the understanding that the rough mapping data could be rectified accurately later. While true, the cost of converting existing maps would be prohibitive. The general public might think that these public data structures replace the need for land surveys and accurate civil engineering. But these vague images actually make it even more important to consult with a licensed professional to provide precision data before any design or development decisions are made.

    Over four decades ago I was guilty of using the rubber scale. New technology has promoted us into a new problem, and moved us from a rubber scale to a rubber sheeted world.

    Photo by edibleoffice: GIS of Hayes Valley, San Francisco.

    Rick Harrison is President of Rick Harrison Site Design Studio and Neighborhood Innovations, LLC. He is author of Prefurbia: Reinventing The Suburbs From Disdainable To Sustainable and creator of Performance Planning System. His websites are rhsdplanning.com and performanceplanningsystem.com.

  • A Train to Nowhere: Not A Train Through Nowhere

    In expressing its opposition to the California High Speed Rail line, Washington Post editorialists noted that critics of the now approved Borden to Corcoran segment have called the line a “train to nowhere” (“Hitting the breaks on California’s high speed rail experiment“). The Post call this:

    …a bit unfair, since some of the towns along the way have expensively redeveloped downtowns that may now suffer from the frequent noise and vibration of trains roaring through them.

    What the Post missed, however, is that a “train to nowhere” is not a “train through nowhere.” There is no doubt that the high viaducts and the noisy trains have potential to do great harm to the livability of the communities through which it passes. This is one of the reasons that the French have largely avoided operating their high speed rail trains through urban areas, except at relatively low speeds. Stations, except for in the largest urban areas, are generally beyond the urban fringe and towns are bypassed. Yet, one of the decisions not yet made in California, for example, is whether the town of Corcoran will be cut in half by the intrusive, noisy line.

    There would be nothing but grief for the towns through which the California high speed rail lines would pass, but not stop (this is not to discount the disruption the line will cause even where it would stop, such as in Fresno). It may be a train to nowhere, but it is a train through places that people care about.

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