The Orange County Transportation Authority board of directors Monday postponed for two weeks action that would have provided Anaheim with access to OCTA funds for the city's streetcar project because several directors remain uncomfortable with the transit system's $100-million per mile price tag.
Although the board had previously allocated funds for the environmental study and conceptual engineering work, directors are struggling with the wording of an agreement between OCTA and the city that calls for the board to “concur” with the city's selection of the streetcar before city officials can access the funds.
Proponents of the planned 3.2-mile public transit project — which will connect a planned train station with key destinations such as the Disneyland Resort, the GardenWalk outdoor mall and the Anaheim convention center — said that the project will support city growth and increase the county's economic activity.
“We believe it's an enhancement to all the people of Orange County,” said Dennis Kuhl, chairman of the Los Angeles Angels of Anaheim.
But in recent months, some OCTA directors have challenged the cost of the planned streetcar system, questioning the financial sense of casting aside a bus alternative, which is projected to be $263.4 million cheaper to construct. That debate continued at Monday's board meeting, as directors Todd Spitzer, Jeff Lalloway and John Moorlach scoffed at the streetcar's projected $319-million total cost.
OCTA officials conducted a cost comparison among 11 streetcar projects across the country and found that Anaheim's planned system was by far the most expensive. The streetcar project in neighboring Santa Ana is estimated at $110 million less than Anaheim's, despite Santa Ana's project having a planned route nearly a mile longer.
“It is a stark contrast, when you look at Santa Ana,” said Spitzer, a county supervisor. A vote to endorse the project's price tag doesn't make sense, he said. “I don't know how you could explain that vote to anybody.”
There are several reasons that any California construction project can be more expensive than similar projects in places like Portland, Cincinnati and Tampa, including California's high labor costs and environmental regulations.
But it's also becoming increasingly clear that another reason for the steep price are demands placed upon it by Disneyland and the rest of the city's resort district.
Among the factors that Anaheim officials acknowledge have driven up the cost include: a power system that eliminates overhead electrical wires in certain areas so they won't harm the aesthetics of the resort; a higher number of train cars so the system can deliver tourists to Disneyland; and higher infrastructure costs because of increased traffic in the resort district.
And while Santa Ana would be purchasing little, if any, right of way, Anaheim would be spending millions of dollars on right of way, some of which will be expensive because it is in the resort area.
There is no doubt that Disneyland would benefit greatly from a streetcar system. Disney-backed Anaheim Councilwoman Kris Murray said as much at an OCTA board workshop in March. Murray acknowledged during the meeting that the streetcar would be essential in taking cars off the road, thus giving Disney the ability to expand the resort and open a third gate.
And while critics like Spitzer lauded Disneyland and other key destinations in Anaheim, such as the Honda Center and Angel Stadium, for producing billions of dollars in economic activity and thousands of jobs, they questioned the wisdom of using taxpayer funds to subsidize Anaheim's tourist industry at such a high cost.
Lalloway, a Republican Irvine city councilman, noted that most of the board members are Republican elected officials who almost certainly ran on platforms of fiscal responsibility. That they would support the expensive project when the cheaper buses are an option betrays Republican principles, he said.
“I just have to ask the question, when does the spending ever end?” Lalloway said, adding that federal money for the project would likely be borrowed money that future generations would have to repay or be printed from the Federal Reserve. “When do we look our kids in the eye and say, you know what, that's enough, we can do with buses.”
Among other things, Lalloway has issues with the number of additional riders that a streetcar project would attract over an enhanced bus system. While estimates state that a streetcar system would eventually attract 1,000 more boardings a day than a bus system, Lalloway asserted that it would only amount to 600 more people.
He questioned whether those 600 extra people are worth spending an additional $263.4 million, which amounts to $439,000 per additional daily rider.
Moorlach, also a county supervisor, challenged arguments from proponents that a streetcar will increase property values. Values in a tourism-heavy area would rise regardless of a streetcar, he said.
“Who cares? We don't own the land,” Moorlach said. “If it were my own money for streetcars, I'm out,” he added, quoting the network television show Shark Tank.
Lalloway and Moorlach were the only directors to vote against the continuance, presumably because they are against the project altogether.
Meanwhile, board Chairman Greg Winterbottom was upset with the prospect of a delay in approval for the project. "I'm really at a loss. … I'm trying to understand where we are in this cabal," he said. "Is another review going to help us any?"
Anaheim Public Works Director Natalie Meeks said city officials are looking at ways to pare down the cost of the project.
One big cost factor that will likely diminish is the more than 30-percent unexpected contingencies budget that the Federal Transit Authority requires of such projects, Meeks said. City officials hope the FTA will fund 50 percent of the project through a highly competitive federal grant program called New Starts. A typical city project would have a 20-percent contingencies budget, she said.
Officials would also look at ways to cut costs on the streetcar stations, right-of-way acquisition and relocation of utilities, according to an OCTA staff presentation given to the board.
Despite resistance from some directors, it remains unclear where the majority of the 17-member board stand on the project. Of the board's transit committee, Lori Donchak, Gail Eastman, Steve Jones, Janet Nguyen and Tim Shaw approved a concurrence action earlier this month. Other transit committee members were absent from that meeting.
Director Al Murray, a Tustin city councilman, expressed some concern about the cost and asked for briefings by staff. Other board directors offered little comment or were silent on the issue.
In the end, the board directed staff to return with an action that would allow Anaheim access to the funding but will not imply approval of the project's cost. City officials said the funds are necessary for a study to answer directors' questions.