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This page contains a single entry from the blog posted on July 8, 2011 6:52 AM. The previous post in this blog was Lister on Hales for mayor. The next post in this blog is Juicy Rumor of the Month. Many more can be found on the main index page or by looking through the archives.



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Friday, July 8, 2011

On liars' budgets

A fellow who has studied major transportation projects worldwide for years finds depressing new statistics all the time:

On average, urban and intercity rail projects run over budget by 45 percent, roads by 20 percent, and bridges and tunnels by 34 percent.

And the averages tell only part of the story. Rail projects are especially prone to cost underestimation. Seventy-five percent run at least 24 percent over projections, while 25 percent go over budget by at least 60 percent, Flyvbjerg finds.

By comparison, 75 percent of roads exceed cost estimates by at least 5 percent, and 25 percent do so by at least 32 percent....

Promoters of rail and toll-road projects also tend to substantially overstate future use, making those projects look more appealing to whoever is footing the bill. Rail projects attract only about half the expected passengers, on average, while in new research still in progress, Flyvbjerg finds that toll roads (including road bridges and tunnels) fall 20 percent short. (Non-toll roads also miss their traffic projections, but their errors go in both directions.)

The most recent story, here, is worth looking at. Then again, it's nothing new to Portlanders, who are taken to the cleaners time and again. All aboard for Milwaukie!

Comments (16)

A good book that has similar information in it is "Last Exit" by Clifford Winston and published by the Brookings Institution.

It is a good read if people are interested in this topic.

If you're in govt trying to shove this frippery thru, why would you let on any more than the absolute min expected cost.

Honesty would kill the project.

It continues to amaze me that TRI MET can go unchallenged in the local media when it asks for publication data that a shallow investigation and a little common sense would show to be false.

Speaking of liars.

Neil McFarlane told the Clackamas County
BCC that MLR was fully funded. Not even the TriMet pals at buy that whopper.
"It remains to be seen whether Milwaukie will be a success. It has a high pricetag, an as-of-yet incomplete funding arrangement"

Then there is this scoundrel who Jack exposed last month.

Did ya'll catch this? I wonder if Clackamas County's Dan Johnson is telling these UR lies as he has been going around to the CPO’s giving UR presentations?

UR does NOT pay for itself.
And Clackamas County can easily default on their MLR comittment. in June

"Whether or not you like Milwaukie light rail, there is no reason to throw out urban renewal, which, if done right is one of the few tools available to stimulate development. It pays for itself through increased property values, and the money goes to the private sector to get things built like roads. Clackamas County has to to pay its 1.66% share of Milwaukie Light Rail with or without urban renewal."
Posted by Dan | June 24, 2011 1:18 PM

Busted by Bojack
Too funny -- "Dan's" posting from a county computer:
IP Information for
IP Location: United States United States Oregon City Clackamas County
ASN: AS18995
IP Address:
NetRange: -
NetHandle: NET-198-245-128-0-1
Parent: NET-198-0-0-0-0
NetType: Direct Assignment
RegDate: 1994-06-21
Updated: 2005-10-11
OrgName: Clackamas County
Address: 121 Library Ct.
City: Oregon City
StateProv: OR
PostalCode: 97045
Country: US
RegDate: 1994-06-21
Updated: 2008-12-17
Yeah, "Dan." "Urban renewal" is swell.
Posted by Jack Bog | June 24, 2011 6:03 PM

And if you dare to quote any of the above studies or others with similar findings, that have been around for years, at a meeting for "public input" for "stake holders", you are told to sit down and shut up in NO uncertain terms as your comments are "not relevant".
Whitewash, rinse, repeat after me, "cars are evil, cars are evil"; "trains are good, trains are good".
I just wish I knew who the real controllers are for this stuff. I do believe there is a world wide "train mafia".

I thought there were studies that showed we needed all the rail (and condos) for the millions and millions of people who will flock to the area from all parts of the world to escape the effects of climate change?

(Presumably because the indulgences paid by the local population have pleased the climate gods and they've promised they'll spare the Portland area).

This is typical.
County administrator Steve Wheeler
(who was at last Thursday's 10:00 AM MLR bridge ground breaking with a Portland-Milwaukie sticker on his lapel)

cancelled a meeting at the last minute.

"Meanwhile, a meeting on urban renewal scheduled for 2:30 this afternoon was cancelled.

"There was some confusion about the purpose of the meting and also confusion about the type of meeting (e.g. planning mtg., study session, business mtg.)," County Administrator Steve Wheeler wrote in an e-mail this afternoon. "Because the type of meeting controls public aspects of the meeting such as audience participation, recording of it, record management, etc., it seemed proper to step back and properly clarify the purpose and type of meeting before trying to actually have the meeting."

I don't know who was "confused". Word had circulated that staff was going to give a refresher on Urban Renewal to county commissioners. As this county e-mail below states.
Citizens were planning on attending to witness and video what staff was saying.

Staff was going to lie and get caught.

From: Ferrucci, Terry []
Sent: Tuesday, July 05, 2011 8:56 AM
To: Subject: FW: 06 - NOTICE of UR-TIF BCC Discussion Part 2

Just an FYI: this is not a Study Session so will not be recorded. DTD staff put together an urban renewal “refresher” for the “new” Board and invited any of them who could attend.

Terry Ferrucci
Office of Administration and Board of Commissioners
Clackamas County

Well this is the Rosy city, so less than honest project estimates is just putting a rosy face on it...

The planners ought to pass out rose colored glasses for the meetings, kinda like they do at the 3d movies these days.

I encountered an interesting tactic to use for these sorts of projects, IF you have some money, and can get in the door early enough in the process. (And, it would help to have some able supportive lawyer around as well.) Request all of the documentation that comprises the cost estimates, perhaps the environmental studies - it will cost a bundle for the mountain of copies, and one might need the lawyer for pushing for a timely response - just the process of photocopying everything in some situations slows down the process, to the point where delays can be achieved. Also, the actual possession of documents allows for better outside analysis by those whose paycheck is not tied to the project proceeding.

In the world of private development and construction, a full set of engineered, permitted construction drawings is required, project costs must be fully outlined with sources and uses of funding, and a construction contract with a guaranteed maximum price must be executed before the money starts to flow.

Not so in the world of legacy projects for our beloved politicians. They float an estimate based on non-engineered drawings, then hire a no-bid contractor who'll gleefully build at "cost plus"...and away they go. When engineering issues inevitably surface during construction, costs spiral uncontrollably because said "cost-plus" arrangement becomes "cost-plus a change order fee". The public gets stuck with the tab while politicians continue to have fancy "lunch meetings" with the contractor...which are charged to the job as "overhead", also subject to markup.

Just as Sam and Randy were out-foxed by the Wall Street "Goldman" crowd to get their way with PGE Park, the "Goldman" crowd has nothing on your big-time general contractor. Contractors are the cleverest of the bunch, and while they say their jobs are subject to only a small contractor fee, that's after they charge fat salaries, meals and other "management costs" to the job. Oh, and the change orders (and steep mark-up) are inevitable when working on a public job.

Here's the dysfunction: No contractor on the face of the earth would provide a guaranteed maximum price to build a public project without being able to bid on a fully engineered set of drawings. If politicians had to go through the brain damage of providing fully engineered drawings and thus the true cost to build a project, the true cost would be exposed to the public prior to construction (and they'd be outraged). That's why these contracts are always "no-bid" arrangements...there's nothing to bid on.

So contractor and politician, hand-in-hand, begin construction with the mutual understanding the costs are not understood, and when they spiral out of's too late to stop.

This is why we see the MLR bridge construction has begun so hastily...sure, they always say it is because of the weather or water level or some other, they need to get moving before actual costs are discovered.

By the time that bridge is done, the $1.34mm costs will be $2.0mm. The contractor will admit that the drawings weren't fully engineered, and Sam Adams will say he wanted to start in the summer to save time and money...but it will be too late. Just add it to the tab.

Why is it ever too late to stop?
Just leave the unfunded, useless project as a reminder us all that enough is enough.

How many times has TriMet (or any other transit agency) ordered a bus with a price tag, only to be told prior to delivery that the cost went up?

WES only was 200% above the original price estimate, and $40 million (35%) over the official project budget - and the capital cost is STILL climbing to this day thanks to having to buy those Budd RDC cars, installing quiet zones, and other projects.

"Just leave the unfunded, useless project as a reminder us all that enough is enough."

The actual cost will be announced when the MLR bridge consists of a few suspension towers and partially-built deck. Adams and Tri-Met will proclaim the budget shortfall to be a "regional transit emergency" and shakedown taxpayers at every possible level.

This is when I would most certainly vote to "put a bird on it and call it art".

To be polite, there is a whole string of "misinformation" just in only the past month on many local transit issues.

The projected ridership numbers on the proposed LO Trolley were trumped higher than feasible. Bureaucrats and pols were caught.

The congestion numbers on Hwy 43 in regards to LO Trolley were actually proven to be over 37% higher than actual.

The Sellwood Bridge numbers has had numerous inflation or deflation numbers that have been proven to be false. Like trip origination numbers from which county; cost savings to move bridge during construction; cost savings of westend approach; elimination of trolley tracks from bridge design; funding sources; continues.

"Liars' budgets" have conditioned knowing and even not-knowing citizens to mistrust our local government. Having admittance to this phenomenon would go a long ways in having a sensible discourse. And media reporting the true facts would help. Thanks, Jack, for continuing this limited discourse.

In reviewing recent discussions at Oregonlive and BlueOregon, they think MLR and its bridge is a forgone conclusion. It is not.

Most weren't around when the Mt.Hood freeway and the Marquam Bridge were planned. They even put in all the structure, engineering, land acquisition, etc. for the ramps down into the eastside and beyond. But it was stopped, and mostly by the blue oregon types. The same can happen for MLR. Clackamas Co. with their recent fee vote, now urban renewal petition and probable vote and maybe LO's voting on similar measures will tell the bureaucrats and pols to stop.


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