Public Interest Transportation Forum - http://www.bettertransport.info/pitf

Selling a Transit Technology

Review of the Green Line Monorail Proposal Presented to Seattle Voters November,  2002

by

Dick Nelson

Co-Founder, Public Interest Transportation Forum

October, 2002

This essay looks briefly at promises that have been made, estimated costs and how they have changed, ridership predictions, congestion reduction and other real and perceived benefits, opportunities for alternative investments, and what it all says about the efficacy of transportation planning in this city and region. It is not meant to be a thorough critique (that would require gigabytes and probably will be the subject someday of a Ph.D. thesis), but simply to review and highlight key steps along the way that have brought us to the eve of a vote (November 5, 2002) to accept or reject the first phase of a Seattle citywide monorail system, the Green Line. The purpose is to provoke some serious thinking and discussion about our urban mobility predicament. One also can hope that this will inform the election debate.

Table of Contents and Highlights of Key Findings and Conclusions

Part 1: A Little History The voter's pamphlet for the first approved Monorail initiative, I-41, passed in November 1997, clearly established the monorail as an alternative to light rail. Proponents stated that the cost to build would be "low" and the cost to operate would be "very low". In the second voter-approved Monorail initiative, I-53,  proponents asserted that "monorail technology is Seattle's only viable option for rapid mass transit within the city."

Part 2: True Capital Costs In Year of Expenditure dollars, including some items that Elevated Transportation Company should have included but did not, the capital cost of the Green Line Monorail is $2 billion, not including interest.  Based on the per mile cost of the Green Line, the cost of the 53 mile citywide monorail system suggested by the Elevated Transportation Company is $6.5 billion, plus interest. 

Part 3: Operating Cost Accounting The Elevated Transportation Company has assumed that the Monorail fares it collects are its revenue. Yet 82% of monorail riders, according to the Ridership Forecast Documentation, will be former Metro bus riders. Most of the Monorail's fare revenues are Metro's fare revenue losses.

Part 4: Counting Riders  By reconfiguring bus routes to feed monorail stations, the monorail captures current bus riders. The Ridership Forecast Documentation notes: "In general, the neighborhoods served by the monorail already enjoy relatively good bus coverage."  The "new riders" are due in part to somewhat reduced total travel times that result from monorail speed and shorter feeder bus headways.  Major bus route restructuring is assumed to feed riders to monorail stations. City of Seattle growth policies, to the extent they are realized, will direct growth to Green Line station areas and will account for a part of the growth in transit ridership. 

Part 5: Accounting for Benefits   During the 1990s, annual northbound vehicle volume across the Ballard Bridge remained essentially constant. The Monorail ridership models compared to official vehicle counts indicate that the Monorail would remove about 7 of every 100 northbound vehicles from the Ballard Bridge in the afternoon peak period.  Some current bus riders in the Monorail corridor will experience a faster trip, and others a longer trip because their bus routes are reconfigured to feed the Monorail. No overall time saving estimates have been provided for those who transfer from a feeder bus. Each Monorail rider who walks to a station will save 111 seconds compared to her previous bus trip.

Part 6: Alternatives  Using data from the City of Seattle's Intermediate Capacity Transit study, we calculate that the net social cost of the proposed Monorail is between three and four times greater than the same cost calculated for Bus Rapid Transit (BRT) in the same corridor. BRT would be a Metro bus improvement created by deploying low-floor articulated buses, curbside HOV lane operation, peak headways of five minutes, quarter mile minimum station spacing, and having higher speeds than buses now by installing signal preemption and other technologies. Capital costs for Monorail are higher than for BRT by a factor of six, and annual operating and maintenance costs are higher by a factor of nearly two. Monorail is more than twice as expensive as BRT for each passenger boarded.

Part 7: A "Soft" Alternative  A Transportation Demand Management approach called "parking cash-out" provides an alternative to the two billion dollar Monorail capital investment. It would be aimed at taking the same 5,940 SOV commuter cars off the roads in the same corridor through Seattle's downtown as the Monorail is forecast to achieve. Forty-eight percent of all commuters to downtown Seattle report the availability of either free or partially subsidized parking, which provides a strong incentive to drive. Parking cash out would offer a new package of employers' incentives to use Metro bus combined with an offer by transportation authorities to pay cash to employees as a replacement for the parking subsidies.

Part 8: Using Economic Analysis to Compare Alternatives The Elevated Transportation Company had ample time and resources to do an informative least-cost, full-cost comparison of alternative transit and other transportation improvements in the Phase 1 corridor. It could have utilized the results of the Intermediate Capacity Transit study completed in December 2001. Unfortunately, the board and staff ignored repeated requests to undertake the effort.

Part 9: Summary of Findings  Covering capital costs, operating costs and revenues, ridership benefits, alternatives, cost-effectiveness and other economic comparisons, and the implications for a citywide monorail system.

[Dick Nelson previously posted much of this material as a series of messages in the pstransit listserv. Those messages have been compiled here with his approval.]

All official analyses of the proposed Phase I monorail that will be done are now available, allowing one to get a clearer perspective of likely costs and benefits to Seattle citizens. A reading of these documents, combined with a review of previous statements made in support of the monorail, paints an interesting picture of how a transit technology can capture the imagination of a small dedicated group and the interest of a sizable portion of the public, whether or not it positively impacts transportation problems.

 

Part 1: A Little History

The first monorail initiative, I-41 (Seattle Proposition 1), passed in November 1997. The voter's pamphlet statements for and against the ballot measure (no campaign material was reviewed) clearly established the monorail as an alternative to light rail. Indeed, as the opponents pointed out in their statement, the system would duplicate service to be provided by the RTA (Sound Transit). For proponents, the monorail would by far be the cheaper alternative. They stated that the cost to build would be "low" and the cost to operate would be "very low". Construction would be $20 million per mile for the 40-mile citywide system. Presumably this is in 1997 dollars. No figures are given for operating costs. Interestingly, the opponents did not dispute the construction cost figure, although they described the proposal as "a $1 billion monorail".

Costs to build and operate, according to proponents, would be recouped from rent collected from commercial centers at stations, from private sector investments in the system itself (presumably repaid from the fare box), and, only "if necessary", tax funds from local, state, and federal sources. The possibility that taxes might be needed was made clear: "No one wants more taxes, but if we want a transit system that really works, we're going to have to pay for it." However, the only tax mentioned was a doubling of the B & O tax.

The 28 stations would provide amenities -- places "where you could get a cup of coffee, a meal, groceries, drop off or pick up dry cleaning, check out a library book, or pick up a child from day care."  These centers, presumably on property owned by the public development authority, would "produce a profit." The initiative did not indicate what the public cost might be to buy land for these 28 centers or how their establishment would be funded.

Congestion relief was clearly identified as a benefit: "We can do more than fight traffic. We can reduce it." The opponent's statement echoes this by indicating "we are all frustrated with congestion." Another stated benefit was that buses on existing north-south routes would be freed-up to provide service to "undeserved (sic) east-west commuters". Also mentioned were the monorail's "pollution-free" and quiet operation, and, because of its elevation above traffic, its speed and reliability.

The second initiative, I-53 (Seattle Proposition No. 2), responding to the City Council's attempt to kill the ETC, passed in November 2000. The voter's pamphlet statement for the measure repeated many of the earlier reasons for building a citywide monorail, and added a few new wrinkles. Rather than going head-to-head with Sound Transit and light rail, proponents argued that the "monorail will play a significant part in conjunction with other modes of transportation" as provided by Metro and Sound Transit to "fight the traffic congestion that threatens our quality of life in Seattle." But they also made it clear that "monorail technology is Seattle's only viable option for rapid mass transit within the city." "Rapid" was underlined.

The statement also implied that the city's councilmanic borrowing authority could be tapped without the need for "new taxes."  The measure requires the City to reserve up to $200 million in bonding capacity to be used for construction. No indication was given as to how debt service (principal plus roughly an equal amount of interest) would be paid. It's possible proponents believed that the local economy, which was still expanding in 1999, would generate enough revenues under existing taxes to pay the borrowing costs.

The opponent's statement raised the specter of much higher construction costs for the 40-mile system - "$2 billion to $3 billion or more" - and that the only "identifiable" funding source is Seattle taxpayers.

 

. Part 2: True Capital Costs

In 1997, monorail proponents said the cost to construct a 40-mile citywide system would be "low", an average of $20 million per mile. They also said that the cost to operate the system, although not specified, would be "very low." We now have better figures developed by the ETC, the City, and others suggesting that both costs likely will be considerably higher than initially promised. Yet the full and true costs to build Phase 1, as we show here, continue to be seriously misstated and understated. Operating costs will be addressed separately.

The following cost summary and analysis is drawn from several official documents listed in the table:.

(1) Seattle Popular Monorail Plan, ETC, August 5, 2002 Green Line Monorail Route MapClick to see Monorail Green Line route map from www.elevated.org
(2) Capital Cost Plan, Davis Langdon Adamson
(3) Transportation Risk and Uncertainty Evaluation Review of the Seattle Monorail Project (TRUE), July 26,2002
(4) Results of Revenue Risk Analysis for 1.4% MVET in Seattle to Support Monorail Project, DJM Consulting, July 30, 2002
(5) Financing Model, DJM Consulting

 

 Capital Costs as Estimated by the Elevated Transportation Company

Capital costs are tricky because they have been expressed both in current (2002) dollars and year of expenditure (YOE) dollars. Because of anticipated inflation, YOE costs are always higher. Also, some construction-related costs may not be included in the accounting of "project" costs, but placed in separate categories such as "project reserves" and "agency costs". The ETC has used this accounting device to understate actual construction costs. And some costs, such as the cost of borrowing, are not stated at all.

Shown below are the ETC's current dollar cost estimates of project costs taken from the Plan (1, page 43). Shown in parenthesis is the contingency that is included in the cost for each item expressed in both dollars and percent. The contingency is supposed to cover any unanticipated cost escalation. It differs from item to item because some costs are more certain than others at this stage of the project.  

All costs are expressed in millions (M) of dollars:

Cost Element Cost (Contingency)
Trains and Control Systems  $255M ($30, 12 %)
Stations $115M ($20M, 17 %)
Supports $260M ($40M, 15%)
Water Crossings $100M ($20M, 20%)
Maintenance Facility $20M ($10M, 50%)
Power Supply $80M ($15M, 19%)
Utility Relocation $60M ($20M, 33%)
Rights of Way $25M ($5M, 20%)
Hazard Materials Removal $5M ($5M, 100%)
Design and Administration $190M ($45M, 24%)
Total  $1,290M ($210M, 16%)

 

The ETC's Phase 1 budget has four more categories: Project Reserves, Agency Costs, Operating Subsidy, and Second Line Planning. Our focus here is on the first and second categories.


Under Project Reserves are listed three costs items:

Cost Escalation to YOE -$199M

Sales Tax - $80M

Agency Reserve - $76M

All of these costs are expressed in YOE dollars.

Cost Escalation is the inflation adjustment to translate all costs from 2002 dollars to YOE dollars. Sales Tax reflects the current state and local tax that must be paid on construction materials (construction labor is exempt). And, Agency Reserve is intended to cover any change in the scope of the plan that results in increased costs.  

Under Agency Costs are two items:

Pre-construction Planning/Design $32M

Program Management $41M

The ETC's budget implies that these are YOE costs. Let's assume they are.

The four costs after the inflation factor listed above are all clearly construction-related. The only cost adjustments that are problematic are the Sales Tax and Agency Reserve. The ETC's plan suggests that the legislature could defer sales tax payments, and they would be made later out of operating funds. Whether or not this happens (In the author's opinion it's highly unlikely given the current fiscal crisis in Olympia, and given the fact that other transit agencies such as Sound Transit would have a similar claim.), the taxes will be due at some later time. The monorail authority will realize some savings since deferral amounts to an interest-free loan. 

Agency Reserve expresses one risk factor (more about risks later) that may increase costs. It differs from a contingency factor that reflects a possible currently unknown increase in a specific budget item. Scope creep is within the control of the agency management. When it happens, the agency makes a considered decision to expand project scope, such as adding a station or park & ride facilities. The ETC is obviously anticipating some scope creep.

A strong argument can be made that all four items are necessary costs, and should be included in (shifted to) the total capital cost. We first do this by using the total cost inflation factor (15.4%) to reduce each to 2002 dollars. This is a rough estimate since we don't know exactly when each of the cost items will be spent. The ETC's accountants should run more precise numbers.

In 2002 dollars:

Sales Tax  $69M

Agency Reserve $66M

Pre-construction Planning/Design $28M

Program Management $36M

 

Total Adjustment $199M

We can now restate the ETC's total Phase 1 capital (construction) cost in both 2002$ (1, p. 43, Sub Total) and YOE$. The total YOE project costs remain the same ($1,749M).

$1,489M (2002 $)

$1,718M (YOE $)

"True" Cost Analysis

But this is not the end of the story. The City commissioned a risk analysis of Phase 1 costs, the so-called TRUE analysis (3). A similar risk analysis of MVET and bond revenue was also done (4). For the cost analysis, a Delphi procedure (an "expert" panel) was used to identify all risk factors (reasons that estimated costs might increase) and all opportunities (reasons that costs might decrease), and then statistical methods were used to assign a monetary value and a probability of occurrence. Approximately 30 risk and opportunity factors were found. The process was similar to one used to estimate the true costs of the Viaduct repair/replacement. It was a test of whether the more arbitrary contingency and scope creep factors used by the ETC captured all significant possibilities for higher costs to be realized.

The results of TRUE were statements of cost and associated probability, all in YOE dollars:

10% chance project will cost less than $1,550M

50% chance project will cost less than $1,720M

60% chance project will cost less than $1,760M

80% chance project will cost less than $1,910M

90% chance project will cost less than $2,050M

The ETC plan references this analysis but did not adopt the same probability approach when it stated its YOE costs. It appears that the ETC's estimates fall between the 50th and 60th percentiles of the TRUE analysis but closer to the 60th. If the 90th percentile is used as the "working" cost number, the TRUE analysis suggests that approximately an additional $300 should be added to the ETC YOE estimate (and $87 to current dollar estimate). The readjusted construction cost totals are:

$1,750M (2002$)

$2,018M (YOE$)

Expressed in cost per mile for the 14-mile corridor:

$125M (2002$)

$144M (YOE$)

Interest Costs   

There is one more adjustment to make before we can state the full and true cost of construction in 2002 and YOE dollars, and calculate a per mile cost. That adjustment is to add the cost of borrowing, a cost that is largely interest payments on bonds. Neither the ETC's cost/financing analysis section of its plan nor the TRUE analysis mention interest costs.

Some accountants who have advised the ETC argue that interest costs should not be included, or that they should only be included to the extent that early borrowing is needed and up to the point that ridership is generated. Then interest, a substantial cost item, should be paid and accounted for out of operating funds. This may make sense to students of the Arthur Andersen school of accounting, and to project managers who wish to reassure the public that costs are "low", but it makes no sense in the real world of serious competition for tax dollars. Taxpayers just might want to weigh alternative investments, even non-transportation investments. If so, they need to know the full costs of construction. In the context of funding a monorail system, a dollar paid in interest to bondholders who finance the concrete and metal is no different than a dollar paid directly for the concrete and metal. And, as a matter of fact, new federal accounting standards require that local governments state borrowing costs in their capital budgets.

Interest costs computed from data in the ETC's Financing Model, are posted below as an addendum to Part 2.

Citywide System Costs

The ETC's plan describes a 5-line, 58-mile, citywide system. The November ballot measure will be, in addition to authorizing taxes and a budget for Phase 1, a vote on this conceptual plan. Monies, $6 million, would be made available for initial planning of the second monorail line. The plan provides no estimate of the cost of the system. A rough estimate in current dollars (minus interest costs) can be derived by using the per mile cost of Phase 1, and by assuming that it will be at least the same for the larger system given that it will have at least three additional water crossings which tend to be high cost segments.

Estimated total system cost (2002$) = $7.25 billion, plus interest on borrowing

Comment

This analysis accepted as valid some cost items that have been questioned by others. These include the adequacy of contingencies (i.e., risk levels) at this early pre-design stage, costs associated with water crossings (see page 44 of the Plan where even the ETC seems to be raising a red flag regarding West Seattle bridge retrofit), and mitigation costs stemming from environmental and esthetic impacts. Even so, it indicates that capital costs have grown enormously from the initial estimates, and that they continue to be significantly understated in official documents.

 

Addendum to Part 2: Capital Costs: Interest Cost and Total Capital Costs

Debt Financing Costs

The ETC's financing plan sets out three possible scenarios developed by using a financing model that correlates the project's anticipated construction schedule and payout with MVET and bond sale revenues. Each scenario is based on a different set of key assumptions: bond interest rate, timing and amount of each bond issuance, MVET revenue growth rate, and rate of interest earned on bond reserves. The year-by-year spreadsheets that are generated allow estimates of a possible range of debt financing costs (bond interest plus cost of issuance) over the period from the date of first bond issue to the date when bonds are fully paid after 30 years. These figures are then adjusted by subtracting interest earned on bond reserves to give a total net debt financing (borrowing) cost. Here are the numbers (in millions of YOE$) obtained from the spread sheets that are posted at  http://www.elevated.org/project/resources.shtm


Scenario A  $1,629  
Scenario B  $1,649
Scenario C  $1,477

Without a good basis for selecting one scenario over the others, we calculated the average of the three:

Average net debt financing cost  $1,585

This is year of expenditure (YOE) dollars. A current dollar (2002) figure could be derived if we recalculated the interest cost after backing out the assumed annual inflation rates. However, the financing model doesn't provide annual inflation rate assumptions.


Final Adjusted Capital (Construction) Cost

In Part 2 we indicated that the capital cost should include all necessary construction-related costs (pre-construction planning/design, program management, and agency reserves for possible scope creep).

Adjusted construction cost $2,018 (YOE)
Cost per route mile $144 (YOE)
Adding the average debt financing cost:

Final adjusted total construction cost  $3,633 (YOE)

Cost per route mile $260 (YOE)


"True" Cost Analysis (Amended)

But this is not the end of the story. The City commissioned a risk analysis of Phase 1 costs, the so-called TRUE analysis (3). A similar risk analysis of MVET and bond revenue was also done (4). For the cost analysis, a Delphi procedure (an "expert" panel) was used to identify all risk factors (reasons that estimated costs might increase) and all opportunities (reasons that costs might decrease), and then statistical methods were used to assign a monetary value and a probability of occurrence. Approximately 30 risk and opportunity factors were found. The process was similar to one used to estimate the true costs of the Viaduct repair/replacement. It was a test of whether the more arbitrary contingency and scope creep factors used by the ETC captured all significant possibilities for higher costs to be realized.

The results of TRUE were statements of cost and associated probability, all in YOE dollars:

10% chance project will cost less than $1,550

50% chance project will cost less than $1,720

60% chance project will cost less than $1,760

80% chance project will cost less than $1,910

90% chance project will cost less than $2,050

The ETC plan references this analysis but did not adopt the same probability approach when it stated its YOE costs. It appears that the ETC's estimates fall between the 50th and 60th percentiles of the TRUE analysis, but closer to the 60th. If the 90th percentile is used as the "working" cost number, the TRUE analysis suggests that approximately an additional $300 should be added to the ETC YOE estimate (and $260 to current dollar estimate). The readjusted construction cost totals are:

$1,750 (2002$)
$2,018 (YOE$)

Expressed in cost per mile for the 14-mile corridor:

$125 (2002$)
$144 (YOE$) 

 

Part 3: Operating Cost Accounting

Early estimates pegged the monorail's operating costs as "very low." It was also suggested the monorail would be "profitable", meaning revenues from rental of commercial space at stations would supplement fare revenue, and both combined would more than pay the costs of operation. We now have new cost and revenue estimates that allow us to test these promises and similar statements in the Plan that will be voted on in November.

Financing Monorail Operations

According to the ETC's Plan (August 5, 2002), Phase 1 annual operating costs and revenues will play out in one of three possible scenarios based on three assumed operation and maintenance cost levels paired with three levels of assumed fare schedules (taking into account negative fare-ridership elasticity) and advertising revenues, projected to the year 2020 (all figures in 2002$):

Low:

Fares $1.50 peak, $1.25 off-peak, 50% bus-to-monorail transfer discount
Advertising $100 k per station

Total O&M Cost  $24.5M
Total Revenue $24.2M


Medium:

Fares $2.00 peak, $1.75 off-peak, 50% bus-to-monorail transfer discount
Advertising $250 k per station

Total O&M Cost $27.0M
Total Revenue $32.8M


High:

 Fares $2.50 peak, $2.25 off-peak, 50% bus-to-monorail transfer discount
Advertising $500 k per station

Total O&M Cost $32.9M
Total Revenue $41.9M

What is immediately apparent from this construction is that revenues from fares and advertising are assumed to go up to more than match higher O&M costs. After nine years of "startup" subsidy ($25 m provided in project budget), the ETC "anticipates" that the Phase 1 line "may be able to" operate without a subsidy, and even produce an operating surplus. In the Plan's words, the Green Line "may be able to be self-sufficient". If not, the Plan suggests several contingencies: lowering costs, raising fares, seeking outside (state, federal?) funding, and asking for continued tax subsidy. No analysis is provided of the likelihood (risk) of any of these sources.

Now it is possible that higher O&M costs will not be matched with higher revenues. In accounting parlance, a complete fiscal risk analysis would acknowledge other pairings of costs and revenues in addition to low-low, medium-medium, and high-high are possible. Costs could be high and revenues low, or some other combination. (A more complete analysis would need to consider at least a 3 x 3 cost vs. revenue matrix, and not a 3 x 1 matrix. Since ad revenues and fares are independent, the actual matrix might even be larger.)

Fare Structure Issues

In particular, it may be politically difficult to realize fare levels above those that are presently in place in the larger Metro bus system. Although the Plan talks about value-based pricing -- meaning that monorail riders might be willing to pay more for rides in peak periods, to special events, or that are longer in length - it doesn't assess even the practical difficulty of instituting these special fares. For example, the latter apparently assumes a different zone structure than that now in place for Metro.

Then there is the interesting matter of bus transfer charges. A 50% transfer charge would increase low-range peak fares from $1.50 to $2.25, and off-peak fares from $1.25 to around $1.85. This assumes, for the 50% of all riders who transfer from a Metro bus, a willingness to pay a premium fare. Bus route realignment (more about this later) will make these extra charges mandatory because there will be no (or not as convenient) parallel and lower-cost bus service. This is especially the case in West Seattle where bus routes to downtown will be cut back to feed monorail stations.

The Plan does not provide any information about fare integration with Metro. This is a significant financial issue that has been briefly discussed in the press (see July 19 Seattle Post Intelligencer article "Metro questions monorail's revenue potential") and apparently has not been resolved. It is actually a set of issues:

- What is Metro's cost to provide the quality of feeder service that the ETC anticipates to be needed? Is a "revenue neutral service plan", as mentioned in the technical document entitled Ridership Forecast Documentation, possible?

- How do transfers work in the reverse direction, from monorail to Metro bus? Will Metro charge a partial fare?

-  Will the monorail offer fare discounts to seniors, students, and monthly pass buyers equal to those offered by Metro? How will this impact estimated revenue?

But perhaps the most interesting fare issue is how the financial balance sheet for the new transit system should be portrayed. The public's balance sheet for tax and fare revenue purposes doesn't care whether the monorail is a separate system or integrated with Metro. The ETC has assumed that the fares it collects are its revenue. Yet 82% of monorail riders, according to the Ridership Forecast Documentation, will be former Metro bus riders. For this large majority of transit customers, no net new fare revenues are generated accept to the extent there is a value-added fare structure. So the new transit system, whether integrated or separate, has added significant service with costs that aren't covered by fares. In other words, the monorail's fare revenue gains are Metro's fare revenue losses.

Question: Is it then appropriate to call the monorail a self-sufficient system?


Other Operating Cost Issues


Several other issues arise from a reading of the Operating Costs and Revenue section of the Plan. All bear further scrutiny that is beyond the scope of this cursory review:

- Is the spread of advertising revenue from $100 k (low) to $500 k (high) realistic?

-  Are comparisons with the purported self-sufficiency of Vancouver's Skytrain and the expected self-sufficiency of the Las Vegas monorail appropriate? Skytrain ridership (and fare revenue) benefits from high-density station areas that seem difficult to accomplish in Seattle. The Las Vegas system will have a captive ridership base (tourists) that may be more willing to pay for novelty than residents.

- Can just 8 persons manage a monorail line?

 

Part 4: Counting Riders


Predicted 2020 Ridership

The ETC Plan contains the following ridership estimates for the average seven-day week in the year 2020 by trip category, expressed in number of boardings:

Weekday 57,000
Weekend 21,000
Holidays 21,000
Tourists 4,000
Events 8,000

These numbers were produced by modeling (weekday) and estimating (weekend, holiday, tourism/events). The tourist and event categories are weekday numbers, and holidays are not considered weekdays, so the total number of boardings on the average weekday is 69,000.

Modeled weekday numbers are based on route and service assumptions: 14-mile "most promising (as to cost) route"; 19 stations; 33 minute end-to-end travel time; 19 hour, 7 day, 4 minute peak and 8 minute off-peak headway operation; fares "similar to" Metro bus fares plus a 50% transfer charge, but no downtown free zone.

Modeling was also used to predict other key numbers including mode shift and mode used to access the monorail. These numbers for 2020 are:

Monorail riders who were former bus riders - 82%

(The Ridership Documentation indicates that the remaining 18% are new transit riders and represent "primarily trips diverted from autos." No analysis is provided to support this assertion. In contrast, actual rider surveys have indicated that new transit service causes riders to divert from other modes, including walking and biking, and that it induces trips that would have otherwise not been taken. Also, trips are diverted from carpools as well as SOVs.) 

Monorail access mode:

Bus/rail transfer*   51%
Walk 45%
Car park & ride   4%
Bike Not indicated
Car drop-off/pick-up Not indicated

*Assumes LINK is operating

One might first ask: How accurate are these estimates?


Ridership Modeling Problematic, but Necessary

Since weekday travel is the major trip category, and both weekend and holiday travel are derived from it, the focus of this discussion is on the accuracy of modeling.

There is no way to fully describe the factors that determine the accuracy of models used to predict transit ridership in this essay or even a short book. Travel models have evolved to become exceedingly complex statistical estimation tools - black boxes -- that only the model owners/operators/consultants fully understand. Yet their structures do not, and in my opinion can not, mirror the complexity of the real world and real travel behavior. For example:

1.  Actual personal trip patterns, which involve multiple stops along the way, are not taken into account. Even half of all commute trips involve at least one stop on the return-to-home leg.

2.  Weather and topography, which effect mode choice, are not variables.

3.  Models are based on the gravity principle - people travel to the site of a desired activity that is closest. But people often choose quality or novelty over proximity.

4.  Many assumptions must be introduced as inputs, some of which, like future land use, are highly uncertain. A property that is zoned commercial can have a large range of trip generation rates depending on its actual use.

Further, the model is not transparent, i.e. the assumptions, estimates, and other inputs that determine future ridership are not easily discernible to even a technically trained eye. Here are a few key ones:

1. Relationship (elasticity) of ridership and fare level.
2. Monetary value of travel time.
3. Parameters of the new transit system and supporting (feeder) bus system.
4. Changes expected to occur in the rest of the transportation system, including roadway and separate transit improvements.
5. Economic changes: numbers of jobs by type and their distribution.
6. Growth and land use changes, especially in the corridor served by the new system.
7. Changes in society producing new and different travel demands.

Since all of these factors are highly uncertain when one looks out 20 or more years, one would expect the results of modeling also to reflect a high level of uncertainty. Indeed, models that were employed 20-30 years ago grossly under-predicted the growth of personal travel. The modeling missed some of the most significant societal changes that occurred over the decades from 1970 to 1990, including single parent household growth, women and teenagers entering the workforce, and the explosion of nonwork activities and travel. Recent studies indicate that ridership predictions for most new transit systems have been overstated.

Now, arguably, models have improved over the last three decades, and the sharp changes in the American household have moderated. Yet even model developers and practitioners caution that today's more sophisticated model must rely on uncertain assumptions about future patterns. The modelers of monorail ridership state that the accuracy of ridership estimates "may be of the order of plus or minus 10 percent", but they also include quite specific caveats that would get them off the hook should their ridership estimates prove more inaccurate (see Ref. 5, p. 14-15).

Ridership predictions are needed to gage the cost-effectiveness of transit investments. However, they need to acknowledge the possibility of large uncertainties in both inputs and the model structure itself. And they need to reduce the introduction of inaccuracy. A good way to minimize introduced inaccuracy would be to involve a "neutral" technical panel to oversee the modeling. This was not done for the monorail plan.

A comparison of alternatives also can minimize the impact of modeling inaccuracy. We discuss this below.

For purposes of discussion, we assume that the ridership numbers are accurate. However, we look more closely at one key input assumption for which the modeling offers some transparency: bus feeders.

Bus Feeders

Although only briefly mentioned in the Plan, major restructuring of bus routes in the corridor is assumed. All West Seattle routes now serving the downtown are truncated to feed monorail stations. In Ballard, some routes are eliminated while others are converted to feeder loops. Some routes serving Queen Anne and Magnolia are apparently realigned to feed monorail stations, but the exact changes are not specified. In several cases, peak headways are reduced.

These are the routes that will change in some way, including the elimination of express service:

West Seattle routes: 20, 21, 22, 51, 54, 55, 56, 57, 128, 135
Ballard routes: 15, 18, 75, 86(new): 

By reconfiguring routes to feed monorail stations, the monorail captures current bus riders. The Ridership Forecast Documentation makes the point this way:

"In general, the neighborhoods served by the monorail already enjoy relatively good bus coverage."

This statement explains why most (82%) of monorail riders are already bus riders. The "new riders" are due in part to somewhat reduced total travel times that result from monorail speed and shorter feeder bus headways.

Summary

Monorail ridership predictions are subject to considerable uncertainties that are not easily estimated nor apparent. However, less uncertain is the proportion of monorail riders who are current bus riders and who will be forced to shift to the monorail when their bus service is reconfigured. Since there is good bus service in the monorail corridor now, relatively few new riders will be attracted by the monorail investment. Not all new riders will be former SOV drivers.

References

This analysis of rider projections is based on several official documents:

1.   ETC Seattle Popular Monorail Plan, August 5, 2002.
2.   Initial Ridership Estimates, URS Corp.
3.   Baseline Ridership Estimates, URS Corp.
4   Event and Tourist Ridership Estimates, TRANSPO.
5.  Ridership Forecast Documentation, URS Corp., July 2002.
6.   Ridership Forecast Technical Appendix, URS Corp., July 2002

 

Part 4. Counting Riders (Addendum: Station Area Population)

Estimates of the population (and households) served by the monorail have varied widely. The Monorail Plan does not provide an estimate, so others have made efforts to arrive at a number. We attempt here to get to a better understanding of the number and proportion of the city's residents that would have easy walk access to monorail stations.

Seattle Times' Estimate

The Seattle Times published a map (September 13, 2002) showing census block groups in the monorail corridor that had some portion of their area within three-eights of a mile as a crow flies from the 19 proposed stations. The accompanying article said that 99,000 people, or 1 of 6 city residents, live in these block groups bordering the Green Line. Three-eights of a radial mile is approximately equivalent to a 7-block walk on the rectilinear street grid.

Although it may be precise, this estimate has two problems that together produce a high number for the population with easy access to monorail stations. First, block groups are a coarse geographic unit compared to the walk distance. They are typically composed of 12 or so city blocks. So a circle drawn around a station will inevitably touch some block groups that will lie largely outside the radius. This leads to the inclusion in the estimate of areas up to a one mile from the station. Second, a circle with a three-eights mile radius is 2.25 times the area of a circle that is one-fourths mile in radius, the distance that has become the standard for estimating walk access to transit. Studies have indicated that transit utilization falls off greatly beyond one-fourth of a mile or a 5-7 minute walk. And it can fall off more quickly depending on terrain (hills) and physical impediments (busy streets with no safe pedestrian crossings).

The Weekly's (and The Stranger's) Number

The Seattle Weekly of September 25th quotes a monorail opponent, Tim Hatley: "The population of the areas surrounding the proposed line is only about 188,000." Presumably this number refers to the number of people living in a band around the line, but no basis for the number is indicated. The next week, The Stranger took the number at face value but argued that it will increase with growth out to 2020. 

Adding Station-Area Population Figures

A consultant's study for the ETC provides a somewhat more exact set of numbers on which to base an estimate of current (2000) station-area population (see Station Population and Employment Data, CDC) and its proportion of city population. Station-area population within a one-fourth mile radius was determined using data compiled by the Puget Sound Regional Council for transportation analysis zones (TAZs). A TAZ is an area somewhat larger than a census block group and may comprise roughly 20 city blocks. Seattle has been divided into about 340 TAZs. Apparently, estimation methods were used to determine the approximate population of TAZs split by the quarter mile circle. The results of simply adding individual station-area populations is as follows:

Population living within one-quarter mile of 19 stations:  25,231

City population: 563,375

Proportion of current city population living in proposed station areas: 4.5%

Now 5 of the 19 stations are within the downtown area and the free-ride zone. It's likely that people living in the downtown will find it more convenient to hop a bus or walk to work or to shop. Thus the actual effective population with walk access is less.

Population of 5 downtown station-areas: 7,435

Adjusted walk access population: 25,231 - 7,435 = 17,796 or 3.2% of city

A more accurate estimate could be done using 2000 Census population data on a block level. But the above estimates give an order-of-magnitude number that may be sufficient for the purpose of describing walk accessibility for half of the predicted ridership. Most of the other riders (45%) will access stations by feeder bus, so the total access area comprises at most approximately 6-10% of the city's current population.

Future Corridor Population

As the article in The Stranger points out, population in the corridor will grow over the next 20 years, as will population in the entire city. Growth will boost monorail ridership. The year 2020 ridership projections are based on anticipated growth in population and jobs. How much growth has been factored into the ridership numbers?

We can get a rough idea from the 2014 growth targets adopted in the 1994 City Comp Plan. The city's goal is a 60,000 increase in households. Here's how it breaks out for the Green Line corridor:

Downtown Urban Center:
CBD including harborfront 1,000
Regrade 4,060
Pioneer Square/Stadiums 780
Hub Urban Villages:
Ballard 1,600
West Seattle Junction 1,120
Residential Urban Villages:
Crown Hill 300-400
Admiral @ California 400-700
California @ Morgan 300-400
Total (max for ranges)

10,060

The total, assuming the max for the ranges, is 10,060, or 17% of the citywide goal. (This includes all downtown residents living within the ride-free zone.) So the city's growth policies, to the extent they are realized, will direct growth to the Green Line and will account for a part of the growth in transit ridership in that corridor. 

 

Part 5: Accounting for Benefits

Monorail proponents have suggested several possible benefits from Phase 1 and the 5-line citywide system (feel free to suggest any I may have missed). In this brief analysis we indicate benefits that are economic and those that are not. To the extent significant benefits can be quantified and monetized, they can used to derive a net social benefit value that then allows rational comparisons with alternative investments. Social benefits accrue to people that do not use the system (all citizens) as well as those who do. Alternatives are scrutinized in the next section, followed by a discussion of how they might be appropriately compared.

Three categories of economic benefits are used: those that can be quantified, those that are potentially (and possibly with some difficulty) quantifiable, and those that are accounted for in other benefits. Also some benefits, although potentially quantifiable, may be insignificant. All may not agree with the categorization. But that's okay, since the purpose of this exercise is to reach a higher level of understanding and consensus.

Faster Service

Some current bus transit riders will experience a faster trip. However, other riders will experience a longer trip because their bus routes are reconfigured to feed the monorail. If the net change is reduced door-to-door travel time, it is a monetary benefit. The Ridership Documentation report estimates that each boarding rider who accesses the monorail by walking will save 1.85 minutes compared to her previous bus trip. No numbers are given for the 51% access by transfer from bus/rail.

Reliable Service

Rider surveys suggest that when transit service is consistently on schedule it does tend to generate more new riders. Yet there is no easy way to estimate how many will be produced. So this is not a quantifiable benefit.

Total Riders

The total number of riders is in itself not a quantifiable benefit. As we have seen, 82% of monorail riders are former bus riders. Only 18% (maximum) are "new" riders. And from an operating cost perspective for the total system (monorail and feeder buses), the riders that switch from bus to bus/monorail may actually represent a net loss (disbenefit) because the feeder service is not fully paid for by fares.

New Transit Riders

New riders, assuming all are previous vehicle drivers and passengers, benefit from reduced vehicle operating and parking costs. Determination of vehicle operating cost and time benefits requires further modeling. So this is a potentially quantifiable benefit.

Spectacular Rider Views

Views from a monorail window are not an independently quantifiable benefit. Generally speaking, except for tourists, people ride day-after-day because they wish to access an activity, such as work, at the end of the trip. Any effect will be accounted for in new rider benefit calculations. 

Accident-Free Service

This is not an independently quantifiable benefit. It is a quantifiable benefit that shows up when elevated systems are compared to surface systems, since it represents costs avoided when damage claims are paid.

Better Access to Work, Shop, Play

This is not an independently quantifiable benefit. Any effect will be reflected in new rider estimates. Although it can be argued that city-wide access will improve if lines are added connecting with more major venues, no ridership modeling has been done to indicate the strength of the effect.

Downtown Transit Capacity

This is a potentially quantifiable benefit. But it is also a future benefit since available transit capacity on the streets and in the bus tunnel will not be exceeded for a number of years, perhaps as many as 20, depending on downtown growth rates. So a monorail investment to increase transit capacity now may be premature and actually should be considered an opportunity cost. Also, a decision to increase downtown transit capacity should be based on a comparison of alternatives, including building capacity into a rebuilt or new viaduct (or tunnel).

Arterial Congestion Reduction

If congestion is reduced, vehicle drivers/passengers benefit from reduced travel time. Impacts on road congestion produced by transit projects can be modeled. Vehicle hours of congestion delay can be translated to a monetary benefit by assuming a value(s) for travel time. This is a quantifiable benefit. However, the ETC chose not to analyze arterial vehicle volumes and vehicle travel times that provide a measure of congestion delay. A rough estimate of congestion delay is provided later.

Downtown Street Capacity/Congestion

This is a special congestion case and is a potentially quantifiable benefit. To the extent that the monorail removes buses from downtown streets, it will reduce interference between buses and cars. Producing smoother traffic flows. And to the extent the monorail, whether one line or a city-wide system, produces riders who formerly drove, congestion around the downtown and at major venues will be lessened. However, the Phase 1 rider estimates indicate that the production of new riders is small. Further, much of the congestion is caused by attractions, especially Seattle Center and stadium events, that draw attendees from the greater Puget Sound region. A monorail system would need numerous and very long regional extensions to intercept these vehicle trips. Again, this can be modeled.

Business Attraction

Monorail stations may be the loci for some commercial activity. Fast food, lattes, day care, and flower sellers have been mentioned. But this is a shift in the location of business activity and not a net gain. So it is not an economic benefit.

Civic Icon

This is not an easily quantifiable benefit. Obviously, a new monorail would be unique and would probably be used as a selling attraction on Chamber of Commerce brochures. What this translates to in terms of visitors and other economic benefits is anybody's guess.

Quantifying Monorail's Impact on Congestion

This analysis uses the final numbers in the Monorail Plan and in supporting documents, measured traffic volumes, and some back-of -the-envelope calculus.  And we use field tests since present levels of congestion are obviously discernible to drivers of the corridor at peak periods.

The starting point is the ridership predictions. The Plan says that average weekday ridership in 2020 will be 69,000. Assuming that most tourists are unlikely to drive the corridor, we reduce this number by 4,000, to 65,000. These are one-way trips, so the actual number of riders taking a round trip is approximately half or 33,000.

Now if all of these riders were formerly SOV drivers, then 33,000 cars would be removed from the roads in the monorail corridor. But modeling in support of the plan estimated that only 18% of the riders are "new" transit users. Presumably this is intended to mean that 18% of monorail riders will be former SOV drivers and 82% of monorail riders will switch from bus to monorail. Note that the 18% figure may include people who switch from carpools or who formerly walked or biked, and it may include induced trips, i.e., trips that would not have otherwise been taken. So the number of former SOV drivers may be less than 18%. But since the Draft Environmental Impact Statement doesn't provide more detailed numbers, let's use 18%.

So we are really talking about 18% of 33,000 or about 5,940 cars removed from the corridor's roads.

To estimate the monorail's impact on congestion, the question then is how the number of cars removed compares to the number of cars using the roads in the corridor during peak periods. The 5,940 number doesn't tell us because it is the total for a service (19 hour) weekday. To gauge the impact we need the number of former drivers who use the monorail in the peak (AM and PM) periods. And then we need to locate these riders on the roads -- how many say use 15th Northwest and how many use the West Seattle Bridge. Finally, we need to compare these numbers with the numbers of cars on these roads in the same peak periods.

The ETC's modeling of transit ridership indicates that the 3-hour PM peak northbound ridership across the Ballard Bridge is approximately 3,300. If we assume that the 18% new rider figure for the system applies to the peak period in the North corridor, then a maximum of 594 of the 3,300 are former SOV drivers.

Seattle Transportation counts vehicles by 15-minute intervals through the 24-hour day. Its most recent data (May 2002) for the Ballard Bridge indicates that approximately 8,400 vehicles cross in the northbound direction in the 3-hour PM peak.

Dividing 594 by 8,400 is 7%. So the monorail removes about 7 of every 100 vehicles from the roadway. This, of course, assumes the monorail is currently operating.

Drivers currently experience very little congestion in the corridor. Development in the corridor may increase vehicle volumes and result in congestion over the next 20 years. However, in the 10-year period 1991-2000, annual northbound volume across the Ballard Bridge remained essentially constant. If future growth in vehicle volume is small, then the current congestion-free condition will be unlikely to change.

Downtown Congestion Reduction

"Traffic congestion getting in and out of downtown is appalling, all too many days of the year.  Pretty soon, our quality of life here is really going to start to suffer. We've got to do something, something that gets us out of our cars, gets us to and from downtown, and gets us around between neighborhoods."  - Daniel J. Evans and Kristina Hill, The Seattle Times Editorials & Opinion: Friday, September 20, 2002

We have estimated the monorail's impact on arterial congestion, but what is the potential impact of the monorail on regular weekday downtown congestion in peak periods? The modeling done for the ETC's Monorail Plan did not include estimates of the impact on downtown street congestion. However, it does provide numbers that allow a rough estimate of the magnitude.

The modeling of transit ridership indicates that the 3-hour PM peak northbound ridership across the Ballard Bridge is approximately 3,300. For the West Seattle Bridge, the equivalent number southbound is 5,100. The total is 8,400. If we assume that the 18% new rider figure for the system applies to the peak period in the North and South segments of the corridor, then a maximum of 1512 are former SOV drivers.

Journey-to-work numbers from the US Census allow a comparison with the number of SOV commuters who enter downtown on weekdays. Although the year 2000 census numbers are not yet available, we do have the 1990 numbers. They indicate that 56,000 commuters from around the region commuted by SOV to downtown jobs.

If we assume that all new transit riders who shift from SOVs and use the monorail in peak periods are commuters to downtown jobs, we can estimate the maximum percentage of cars removed from downtown streets in peak periods. It would be 1512 divided by 56,000 or 2.7%.

 

Part 6: Alternatives

 "Of course, not everyone is in favor of the monorail. But ask opponents for their solution for moving around Seattle in the new millennium and you will find that they just plain don't have one."  -   Daniel J. Evans and Kristina Hill, The Seattle Times, Editorials & Opinion: Friday, September 20, 2002

Challenge accepted.

Under the rules of federal new start transit funding, the responsibility is on the proponent to show that there aren't better, more cost-effective alternatives. Of course, in the real world the proponents of a transit technology try to avoid competition, so alternatives tend to be contrived in ways that make them noncompetitive. The ETC has taken this approach one step further. By not going after federal monies, monorail proponents are free to ignore all alternatives, even those in the very same corridor that have been given a reasonably close look. But this is not the place to critique the ETC's work. This section will objectively summarize the results of the Seattle Transit Study for Intermediate Capacity Transit (ICT), a part of the Seattle Transit Initiative to improve the city's transit strategy. At a later point, this author reserves the right to speak to the veracity of the ETC's work.


The Case of the Almost Disappeared Alternative.

Soon after his election, Mayor Schell announced that the City would embark on an ambitious effort to build an ICT system. A study was initiated in a "collaborative effort to plan a seamless public transportation system within Seattle." The City took the lead, aided by Metro, Sound Transit, WSDOT, and the ETC. The project was funded by a $350,000 grant from the USDOT. Parsons-Brinkerhoff was the consultant.

Completed in December 2001, the study compared monorail, bus rapid transit (BRT), and streetcars (trams) in several corridors, including the Ballard-Downtown-West Seattle corridor. With the change of administrations, the study and its results virtually disappeared from the city's radar (and web) screen. After some effort, study documents are now posted on the Seattle Department of Transportation's web site. A request under the Federal Freedom of Information Act may have helped nudge the key materials back into public view. These documents are:

Seattle Transit Study, Summary Report, Fall 2001.

Seattle Transit Study, Final Report, December 2001.

Seattle Transit Study, Stage 1 Deliverables.

Seattle Transit Project, Appendices

Key Results of ICT Study.

Cutting to the chase, here are what seem to this observer to be the most salient results in terms of the current monorail proposal. They compare BRT and Monorail in terms of costs (and benefits) and effectiveness indicators. These numbers, abstracted from the appendix, need careful explanation. Following this will be a technical description of each alternative, including assumed operating characteristics.

This comparison is of the two technologies in the Lake City - Ballard - Downtown - White Center corridor, which is longer than the Ballard - Downtown - West Seattle corridor chosen for Phase I. But the relative values should still be valid and instructive. Since the format available here is quite limited (a spread sheet would be much easier to read), only the key values are presented. All dollar amounts are in millions of 2001$ unless otherwise indicated.

Capital Cost:

  BRT  $301M
  Monorail $1,936M

Year 2020 O&M Cost:

  BRT $14.7M
  Monorail $21.9M

Total Annualized Cost:

  BRT $41.0M
  Monorail $179.5M

2020 Annual Boardings:

  BRT 12.8 million
  Monorail 25.4 million

Annualized Cost per Boarding (2001$):

  BRT $3.20
  Monorail $7.05

2020 System-wide (ITC and bus) New Riders:

  BRT 3.1 million
  Monorail 3.9 million

Incremental Cost per Incremental Rider (2001$):

  BRT  $13.10
  Monorail $45.70


What do these numbers show?

  1. Capital costs for Monorail are much higher than BRT, by a factor of 6. 

  2. Annual O&M costs are higher by a factor of almost 2. But Monorail boards more than twice the number of passengers (the reason for this is discussed below).

  3. When capital and O&M costs are added, total annualized costs of Monorail are almost 4.5 times that of BRT. On a per boarding basis, Monorail is more than twice as expensive as BRT.

  4.  Each system attracts new riders, but somewhat more are produced by the Monorail. For BRT new riders constitute approximately 24% of all riders. The number for Monorail is 15%.

  5. The USDOT cost-effectiveness index, "incremental cost per incremental rider," indicates that BRT is much more cost-effective than Monorail. In fact, only BRT would come close to qualifying for federal funds as a project receiving a "High" or "Medium" rating on this index scale. In 2000, projects receiving these ratings had to have a rating of $12.00 or less.

Bus Feeders to Monorail Produce More Boardings

Monorail produces more boardings than BRT because the modeling assumes that bus routes are realigned to feed Monorail stations. This can be seen from the numbers of buses crossing screen lines at the Ship Canal and Duwamish for both ICT systems compared to the base (bus) system.

2020 Forecast Bus Volumes, Peak Hour, Peak Direction:

Ballard Bridge:

  Base 16
  BRT 26
  Monorail 8

West Seattle High-Level Bridge:

  Base 30
  BRT 42
  Monorail 4

Consideration of Benefits in a Full-cost Economic Analysis

Since Monorail is faster than BRT, riders benefit more from reduced trip times. This travel time saving, when monetized, reduces the total annualized cost of Monorail relative to BRT. Further, Monorail reduces non-ICT system O&M costs to a greater degree. However, BRT still retains a large cost advantage. The numbers from the ICT appendix are:


Year 2020 Value of Travel Time Savings: 

  BRT $4.7M
  Monorail $54.8M

Year 2020 Savings in Non-ICT System Costs:

  BRT $2.9M
  Monorail $8.6M

When these values are added and the total subtracted from the Total Annualized Cost, the result is:

  Bus Rapid Transit in the Green Line Corridor $33.4M
  Green Line Monorail $116.1M

In other words, the net social cost of the proposed monorail is between three and four times greater than the same cost calculated for Bus Rapid Transit in the same corridor.   This calculations is a rough approximation to a full net social cost-benefit analysis.

Key Technical Specifications

  BRT:

        Low-floor articulated buses allowing wheel chairs to roll-on
        Curbside HOV (diamond) lane operation
        Peak headways 5 minutes; off-peak 7.5 minutes
        Station length accommodates two articulated buses
        Minimum station spacing 1/4 mile
        Operational speeds higher than for existing bus routes
        Signal preemption and transit priority using intelligent transportation technologies

  Monorail:

        Low-floor with accessible ramps
        Elevated right-of-ways
        Peak headways 3 minutes; off-peak 5 minutes
        Dedicated structure to cross Ship Canal
        Running speeds significantly better than those of adjacent arterials
        Platforms with passenger amenities
        Station length accommodates 2-car vehicle (minimum)
        Station spacing no more than 1/2 mile
        Fares equivalent to remainder of transit system; free transfers
        Fully-automated control

 

Part 7: A "Soft" Alternative

Managing transportation demand has long been an option of interest in response to high urban vehicle volumes and congestion delay. Unfortunately, "soft" transportation demand management (TDM) measures usually take a back seat to the various "hard or build" options. Under federal transit funding rules for "new starts", there is no requirement that TDM be considered a viable alternative to a transit investment. Consequently, various TDM opportunities languish in "tool boxes" and are seldom developed and tested sufficiently to determine their true potential. That is not to say that TDM works in the real world in every instance. But given the often meager performance of transit investments, that can be hugely more expensive, it would seem that TDM should be given a chance to show its mettle. Certainly this should be the case in an enlightened community such as Seattle.

It would appear that there is an available TDM alternative in the context of the monorail proposal. That alternative could involve incentives paid directly to workers for the purpose of encouraging alternative commute modes. It might also involve disincentives that reduce the attractiveness of driving solo to work.


The Monorail Provides a Benchmark for TDM

One benefit that has been cited for building a monorail system through Seattle's downtown is that will reduce traffic congestion in that area. Without challenging that assumption (we dealt with it above), let's acknowledge that the downtown traffic environment would be improved if more downtown workers used public transportation. Let's also use our estimate based on ETC data that a $1.75 billion (2002$) capital investment, plus interest on borrowing, and as much as $33 million per year in operating expenditures, will take approximately 5,940 cars off the roads in the Phase 1 corridor through the downtown. We can use this is our benchmark for determining the cost-effectiveness of alternatives, assuming that all of these cars represent solo commuters headed for downtown.

Downtown Commute Trips

Since the 2000 Census journey to work data is not yet in the form that it can be analyzed for journey-to-work trip origin/destination, we don't know the current volumes and mode split for commutes to the downtown. We have to rely on older data. In 1990, 110,000 workers commuted from destinations outside of downtown to jobs inside downtown. Of these, 51 % were by SOV, 15% by carpool/vanpool, and 34% by bus. 

We have some other data that bears directly on commute trips to downtown and the current level of incentives. This is taken from Metro's Rider/Nonrider Survey that has been done annually for a number of years. The 2000 survey provides data on employer incentives for alternative means of commuting and on subsidized parking available to commuters.

Employer Incentives

In 2000, just half, 52%, of downtown Seattle employees received one or more employer alternative transportation incentives: bus riding, carpooling, vanpooling, and emergency ride home service. Almost half, 48%, reported the availability of bus pass subsidies. About a third were offered incentives for carpooling and vanpooling. And a quarter of employees were guaranteed a ride home in case of an emergency.

The data is incomplete in one important respect. It doesn't indicate the level of use of these incentives. Employees are generally not forced to either accept or use the incentives.

Subsidized Parking

The other side of the coin is the availability of employer subsidized parking. More than half of downtown workers who commute to work are offered a parking subsidy. Forty-eight percent of all commuters to downtown Seattle report the availability of either free or partially subsidized parking. Another 6% say they receive free parking but not from their employer. Who is being so generous is not clear. And free parking can be a very generous fringe benefit. The most recent parking survey in downtown Seattle (Puget Sound Regional Council, 1999) found the average monthly parking rate to be $174.

Subsidized parking does seem to be a strong incentive to drive to work. Across the whole county, 89% of SOV commuters reported the availability of free or reduced-fee parking, while the comparable number for bus commuters was 36%. The survey did not report similar data for downtown. Outside of downtown, free parking is much more likely to include on-street parking. And the data did not distinguish among types of work. This effect could be a function of job status and level of perks.

A Soft (TDM) Alternative

It would seem that there is an opportunity in these numbers. The goal, based on the monorail's performance, would be to reduce SOV commutes to downtown by 5,940, or roughly 10% (5,940 divided by 51% of 110,000).

An approach called "parking cash-out" has been used and developed elsewhere, but apparently not yet in a major downtown center. It would require a collaborative effort involving the city, transit agencies, regional planners, and employer groups. In essence, it would combine in one program a set of employer incentives to use alternative modes with the offer to buy-out current parking subsidies. The monetary benefits provided by the incentives would equal or exceed the parking subsidy. Local governments and transit agencies would help pick up some of the cost.

One big advantage of this kind of alternative investment is that no monies are expended unless and until employees accept the deal. And new expenditures for all involved are small any way since current subsidies are replaced with incentives. Also, pay-as-you go financing is possible; no borrowing with its attendant interest costs is required.

There is an extensive body of literature on parking cash-out, including actual experience. The significant question is whether this city and its decision makers are up to it, since the end result probably won't be a civic icon and a ribbon cutting ceremony.

 

Part 8: Using Economic Analysis to Compare Alternatives

Economic analysis is occasionally employed to inform transportation decision-making. Significant benefits as well as costs are accounted for and a net benefit (or cost) figure is calculated. The single number encompasses multiple attributes that have been traditionally used to rate the benefits of a transportation investment. Benefits are both direct and indirect, and are experienced by both users and nonusers of the transportation investment. An example of a direct benefit is time saved by riders of a new transit system and drivers on a highway that has new lane capacity. An example of an indirect benefit is reduced health impacts of polluted air when new capacity, whether transit or roadway, reduces congestion. A substantial amount of literature now exists on the monetary value of transportation benefits.

ETC'S Benefit-Cost Study History

The ETC commissioned a consultant to do a benefit-cost study of the monorail's Phase 1. The results have gone through an interesting sequence of iterations.

        The initial results, reported in the weekly press (see The Stranger, August 1-7, 2002) compared Phase 1 monorail in the Ballard-Downtown-West Seattle corridor to the starter light rail segment from Downtown to Tukwila. According to the article, the comparison was in response to a request from the Downtown Seattle Association. Since the initial study is not available, the article's statement that the monorail was found to be far more cost-effective can't be confirmed.

        A new version of the study, sans the comparison, then focused on just the net benefits of building Phase 1. Again, reports indicated that the ratio of benefits to cost were positive, but marginally so. The benefit/cost ratio was slightly above 1.

        Next, ECONorthwest, a consulting firm with experience in economic analysis and the study author's former employer, reviewed the study. According to the author (email message to this writer), ECONorthwest's experts decided that the value given to time was too low and should be increased. This pushed up the benefit/cost ratio to 1.3. This version of the study is posted at http://www.elevated.org/docs/BCA_Report_Final_revised.pdf

        The author also invited interested parties to review and comment on his results. This led to some minor changes which are now included in the posted version.

ETC's Benefit-Cost Study Results


The ETC Benefit-Cost Study posted on the ETC web site provides a table that lists the significant benefits in the year 2020 expressed in millions of 2002$. The question marks represent this writer's interpretation of the results.

Travel time saving (to riders who switch from bus?)  $64.6
Parking saving  (to new riders?)  $21.9
Reduced auto operating/ownership costs (to new riders?) $8.5
Road capacity for private drivers  $3.6
Reliability (to all riders?)  $6.5

Total annual benefits in 2020:  $105.1

The study then calculates the net present value of the benefits over 30 years and compares this number to the costs to build and operate the line (expressed in millions of 2002$):

Benefits $1,744
Costs  $1,677
Net benefits  $67

Benefit-Cost ratio 1.04

Cost per rider  $4.92

These calculations are based on the following key assumptions:

.  Real discount rate 3%

.  Value of time  $10.10/hr

.  Commuter parking @ $8.68/hr

.  Other parking @ $14.39/hr

.  Reliability of transit service valued at 10% of travel time savings

.  2020 ridership  20.3 million

.  Ramp up in ridership (per URS ridership model) in first 3 years after monorail begins operation

.  Ridership growth of 2% after 2020

.  Most recent capital and operating costs

A benefit/cost ratio close to 1.0 would tend to indicate that there is no economic reason to proceed with the investment. But even then, one would like to know more about the key assumptions and the uncertainties associated with each. However, because of the limited length of this critique, it's not possible to probe the many questions this analysis raises. For example, is the value of in-vehicle and wait time (that produces the largest single benefit) realistic given that transit riders can use their time productively - to read, use a cell phone, use a portable computer, think?

Comparing Transportation Alternatives Using Economic Analysis


Economic analysis can be a valuable tool for transportation decision-making, but it needs to be used carefully and with due regard to the possible arbitrariness of assumptions. Here are some guidelines for its appropriate application:

        Compare feasible alternative improvements in the same corridor. This reduces the uncertainty and influence of input assumptions such as the value of time, since all alternatives will use the same value. Comparisons within the same corridor also minimize the effect of different circumstances that impact costs and benefits differentially.

        Compare soft (TDM) as well as hard (build) alternatives.

        Build on previous studies done in the same corridor.

        Utilize a technical panel comprised of disinterested (from out of town, with no record of choosing sides in debates over transit technology) experts to supervise the study and review key assumptions.

        Read and abide by state law (RCW 47.80.030) that requires the Metropolitan Planning Organization (read PSRC) to do an economic analysis of feasible alternatives based on least-cost, full-cost principles.

The ETC had ample time and resources to do an informative least-cost, full-cost comparison of alternative transit and other transportation improvements in the Phase 1 corridor. It could have utilized the results of the Intermediate Capacity Transit study completed in December 2001. Unfortunately, the board and staff ignored repeated requests to undertake the effort.

 

Part 9: Summary of Findings

Summarized below are the major findings by category derived from a review of the official documentation for Phase 1 of the Seattle Monorail Project.

Capital Costs

1)      Estimated YOE capital (construction) cost without debt service costs included is $2,018 billion, or $144 million per mile. Estimated YOE capital cost with debt service costs included is $3,633 billion, or $260 million per mile.

2)      Estimated 2002$ capital cost without debt service is $1,750 billion, or $125 million per mile. An equivalent figure with debt service could not be calculated for lack of documentation on assumed inflation rates.

3)      These full and true estimates of construction cost required several costs to be shifted within the ETC's project budget. These construction-related costs, totaling $229 (2002$) had been placed in "reserve" categories with the implication that they might not be spent. They were: pre-construction planning/design ($32 million), program management ($41 million), reserve for scope creep ($76 million), and sales tax on materials ($60 million).

4)      The ETC's construction cost estimates do not reflect the results of the cost risk and uncertainty (TRUE) study commissioned by the City of Seattle. The TRUE evaluation found that there is a 90% chance the project will cost as much as $2.05 billion (2002$). This figure should be used to communicate the likely cost. A high probability cost estimate is appropriate because of the large uncertainties inherent in identifying and estimating costs at the beginning stage of a project. This adjustment increased the construction cost by $260 million (2002$).

5)      The potential costs that may not have been completely captured by the ETC's budgeting process include: the level of contingencies (i.e., risk levels) at this early pre-design stage, costs associated with water crossings, and mitigation costs stemming from environmental and esthetic impacts.

6)      The estimated cost to build the monorail has increased substantially from an initial estimate in 1997 of $20 million per mile. The earlier estimate also indicated that private investment would fund construction. The current estimate assumes that capital costs will be totally funded by local (MVET) taxes.

Operating Costs and Revenues

7)      A major unresolved issue is fare integration with the Metro (and Sound Transit) bus systems. The Phase 1 line will operate without public subsidy only if it is assumed that revenues increase to match or exceed estimated costs that have a range of uncertainty. Since revenues are derived in major part from the fare box, operating "self sufficiency" may require that monorail fares substantially exceed Metro fares. While Metro bus-to-bus transfers are "free", even the low revenue estimate for monorail operation was based on the assumption that monorail riders will pay a 50% fare to transfer from buses. Not addressed is what they would pay for transferring from monorail to bus.

8)      The cost of the feeder bus system is another outstanding cost issue. Metro has indicated that bus restructuring to feed monorail stations may not be "revenue neutral", and that Metro may not be able to pick up the costs, which may include both capital and operating expenditures.

9)      From a total system perspective (monorail and bus), self-sufficiency may be an illusion. When a new transit technology and service is added to existing bus service that provides good coverage, most riders of the new service will be riders of the old service. In the case of the monorail, modeling indicates that 82% of monorail riders will be former bus riders. So, unless the new system introduces major efficiencies, the cost of operating the combined system will increase without a parallel increase in revenues.

Ridership

10)      Ridership estimates for 2020 that produce discrete numbers of riders do not reflect the uncertainty inherent in the modeling exercise. The model used by the ETC's consultant is based on the model used by the Puget Sound Regional Council. That model has predicted an approximate tripling of transit trips and a doubling of transit mode share in the Northwest King County subarea by 2030 (Destination 2020, Technical Appendix 8, May 2001). These appear to be very optimistic numbers.

11)      The ETC's ridership estimates are also based on the assumption that there will be a major restructuring of existing bus routes to feed monorail stations. As indicated above, there is no agreement as to the costs of restructuring and who will pay them.

Benefits

12)      Benefits should be quantified and monetized for purposes of accurate benefit-cost accounting. Benefits that are more subjective should be described as such. Double counting of benefits should be avoided.

13)      A major potential benefit is travel time saved, including in-vehicle, access, and wait time. This benefit needs to be carefully defined and its monetary value rationally selected.

Alternatives

14)      The ETC made no attempt to consider and compare feasible alternative transportation investments in the corridor or citywide. Alternatives that should have been compared with monorail include bus rapid transit (BRT) and transportation demand management (TDM).

15)      The City's Intermediate Capacity Transit (ICT) study, completed in December 2001, could have served as a starting point for comparisons with BRT. The ICT analysis found that BRT was more cost-effective than monorail on a number of performance indices, even though the monorail carried more riders. However, monorail ridership was largely determined by bus route restructuring, a change that was apparently not assumed for BRT.

Cost-Effectiveness and Other Economic Comparisons

16)      Although federal funding will not be sought for Phase 1, it is considered by the ETC as a potential source for future phases. However, had the cost-effectiveness index used by the US Department of Transportation to determine funding eligibility for new transit starts been applied to the Phase 1 project, according to the City's ICT study it probably would not have qualified for federal funding under the cost-effectiveness standard in place in 2000. In contrast, BRT in the corridor would have come close to meeting the qualifying standard.

17)      Least-cost, full-cost analysis, as required by Washington State law, was not applied to compare the monorail and feasible alternatives. Instead, much more problematic benefit-cost analysis was used, and it was applied to the monorail alone.

Citywide System

18)      The ETC's Plan describes a 5-line, interconnected citywide system with possible extensions to the greater central Puget Sound region. No cost is estimated, no adequate sources of funding are indicated, and no time line for completion is given.

19)      Based on the per mile cost of Phase 1, the 58-mile citywide system would cost $7.25 billion (2002$), not including interest on borrowing.

Follow up essay:  Rising Above Hype

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Last modified: October 2002

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