Streetcar budget mostly spoken for

$140M locked up of $197M allotted for UA-downtown project
2012-01-22T00:00:00Z 2013-01-25T09:49:53Z Streetcar budget mostly spoken forRob O'Dell and Rhonda Bodfield Arizona Daily Star Arizona Daily Star

Before any streets are ripped up or any tracks are laid, Tucson has committed $84 million to preconstruction costs for the modern streetcar that will connect the University of Arizona to downtown.

Combined with a $56 million construction contract, which the City Council has yet to approve, that locks up $140 million of the project's $197 million budget. The remainder is slated for storage and maintenance facilities, financing and contingencies.

As of now the project is underfunded by about $13 million. But Jesse Gutierrez, the city's project manager, predicted projects will come in cheaper than anticipated - the construction bid, for example, is $6 million below the budget estimate.

"All of our projects are coming in a little under because contractors are hungry - they need the work," he said.

The biggest chunks committed so far are $30 million to design and build streetcars, $25 million for consulting and management oversight, and $11 million for engineering services.

So far there is little visible evidence of so much spending. But that will change once the city approves a construction contract and tracks start going in downtown, probably sometime this spring.

Problems in Portland

Oregon Iron Works is supposed to build and deliver streetcars to Tucson this fall.

The company is the only domestic manufacturer of streetcars in the United States. Its first contract is to build cars for an expansion of Portland, Ore.'s streetcar system - and it's not going well.

The opening of that streetcar line had to be delayed five months because Oregon Iron Works is behind on completing the cars.

In addition, because of cost overruns, Portland had to scrap one of its streetcars and buy five instead of six.

Portland now will pay almost the same amount for five cars as it had planned for six.

Gutierrez, Tucson's project manager, said the company has been forthright about its issues in Portland.

"I can't speak for what they've done in Portland, but for the city of Tucson, they're on track." he said. "What they've done for us, they've done well."

Gutierrez said a two-member team goes up to Portland every few weeks for progress reports. In addition, a subcontractor is tasked with staying on top of progress.

The first streetcars, which the company hasn't started building yet, are due in October.

Chandra Brown, president of United Streetcar, a subsidiary of Oregon Iron Works, blamed the delay on the Portland project to that city's inability to pick a propulsion system. She said Portland's budget issues led to cutting the number of cars.

"There's no doubt Tucson's cars will be delivered on time," she said.

Target date: 2013

The city hopes to complete the streetcar project by late 2013.

The original estimate was Nov. 11, 2011, but officials didn't even have a contractor in place by that date.

If construction is not finished by March 2013, to allow time for testing, Gutierrez said the construction company will be fined $14,000 a day until it is ready.

City officials estimated in 2010 that once the streetcar is running, it would cost about $2.9 million a year to operate and maintain. But early estimates show fares are expected to pull in only $300,000 annually, plus another $600,000 from fees prepaid by University of Arizona students.

Initially, city taxpayers will have to subsidize the project by about $1 million a year. But the city subsidy will be closer to $2 million once the $13 million set aside for operations by the Regional Transportation Authority, which is also funding the project, is used up in about 15 years.

Shellie Ginn of the city's Transportation Department said a working group has been formed to develop more solid estimates, which should be finalized by the end of 2012.

Clues from Phoenix

Questions about whether the streetcar will attract enough riders to justify the cost have sparked heated debate since voters approved the project as part of the Regional Transportation Plan in 2006.

In Phoenix, Metro Rail spokeswoman Hillary Foose said the light rail had more than 13.1 million riders last year, up 4 percent over the previous year.

"We're still growing, and that's really very interesting because we thought we'd see it start to level out by now," Foose said.

Riders there pay about a quarter of the costs of the operating budget, and taxpayers pick up the rest.

Tom Jenney, the executive director of Americans for Prosperity in Phoenix, said it doesn't matter that Phoenix is reporting enthusiastic ridership because the taxpayer subsidy is too big.

"The motto of, 'If we build it, they will ride' doesn't work at the levels of development we're talking about," Jenney said.

"If Tucson starts to get to a point where it has 30,000 to 40,000 people per square mile, then rail transit starts to look attractive. But that's also when Tucson starts to look like Manhattan."

Where money goes

Where preconstruction money for Tucson's streetcar is being spent.

Contracts awarded, by company headquarters

Oregon $29,862,463

Omaha, Neb. $25,058,232

San Francisco $11,052,199

Tucson $10,920,509

Atlanta $3,420,140

Seattle $1,817,562

Surprise, Ariz. $73,750

Roswell, N.M. $73,750

Phoenix $73,750

Colorado $73,750

Berkeley, Calif. $73,750

HOW WE GOT THE STORY

Tracking spending so far on the streetcar project is tricky because, although contract information is supposed to be available on a city website, postings are behind and incomplete.

Still, the Star was able to put together a database on the 21 contracts let so far, ranging from project design to program oversight to artwork, drawing from online data, a lengthy examination of city procurement documents and figures requested from the city Finance Department.

To build the database, the Star gathered the records available online and requested a number of missing records from the city's Procurement Office. Finally, the newspaper made a follow-up request to the city's Finance Department to find other contractors who have standing agreements with the city and were directed to do work on the streetcar.

The Star will update the database as the streetcar project continues.

On StarNet: Find the database at: http://azstarnet.com/streetcarspending

HOW STREETCAR MONEY IS COMMITTED

Program management consulting $25,058,232

Professional engineering design $11,052,199

Special track work $1,817,562

UniSource improvements $35,260

Artwork $553,563

Streetcar construction and delivery $29,862,463

Reclaimed water line - Cushing Street $1,283,181

Traction power substations $3,420,140

Cushing Street Bridge construction $6,615,046

Cushing Street Bridge design contract I $57,803

Cushing Street Bridge design contract II $2,001,788

Labor/salaries $1,194,925

Archaeological services $329,590

Engineering support $388,068

Historic signage $80,000

Legal consulting $24,960

Total $83,774,780

Contact reporter Rob O'Dell at rodell@azstarnet.com or 807-8465. Contact Rhonda Bodfield at rbodfield@azstarnet.com or 573-4243.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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