THE ROLE OF STREETCARS IN SACRAMENTO: CAN STREETCARS BE A LOWER COST ALTERNATIVE TO LIGHT RAIL?

Clint T. Holtzen B.A., University of California, Santa Cruz, 2005

THESIS

Submitted in partial satisfaction of the requirements for the degree of

MASTER OF SCIENCE

in

URBAN LAND DEVELOPMENT

at

CALIFORNIA STATE UNIVERSITY, SACRAMENTO

SPRING 2011

© 2011

Clint T. Holtzen ALL RIGHTS RESERVED

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THE ROLE OF STREETCARS IN SACRAMENTO: CAN STREETCARS BE A LOWER COST ALTERNATIVE TO LIGHT RAIL?

A Thesis

by

Clint T. Holtzen

Approved by:

______, Committee Chair Su Jin Jez, Ph.D.

______, Second Reader David Booher

______Date

iii

Student: Clint T. Holtzen

I certify that this student has met the requirements for format contained in the University format manual, and that this thesis is suitable for shelving in the Library and credit is to be awarded for the thesis.

______, Department Chair ______Robert Wassmer, Ph.D. Date

Department of Public Policy Administration

iv

Abstract

of

THE ROLE OF STREETCARS IN SACRAMENTO: CAN STREETCARS BE A LOWER COST ALTERNATIVE TO LIGHT RAIL?

by

Clint T. Holtzen

This report examines the history and purpose of streetcars in the United States, provides a review of literature related to the functions, costs, and benefits of streetcar projects, and uses case study and cost-benefit analysis to examine the potential of a streetcar alternative for a planned light rail project in Sacramento, California. The cost- benefit analysis reveals some marginal savings for a streetcar alternative, but also found that the project’s benefits do not outweigh the initial investment over a 20-year life cycle.

Despite the negative results of the analysis, the paper concludes that additional study is needed to determine whether the addition of land use benefits may return more positive results.

______, Committee Chair Su Jin Jez, Ph.D.

______Date

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ACKNOWLEDGMENTS

I would like to thank my primary and secondary advisors, Dr. Su Jin Jez and

David Booher, for their thoughtful comments and guidance on this thesis. I would also like to thank my colleagues at the Sacramento Area Council of Governments for their willingness to share knowledge and insights throughout the process of drafting this paper.

Most of all, I am grateful for the love and patience offered by my wife, Lacey, during the past several years of graduate school and this final hurdle.

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TABLE OF CONTENTS

Acknowledgments...... vi

List of Tables ...... x

List of Figures ...... xi

Chapter

1. INTRODUCTION AND BACKGROUND ...... 1

Purpose of Report ...... 2

Media Attention for Streetcars ...... 3

Layout of Report ...... 4

2. LITERATURE REVIEW ...... 6

Streetcars: Historical Context ...... 6

Streetcars: A Review of Existing Systems...... 12

Streetcars and Light Rail Transit ...... 17

Bus Rapid Transit ...... 19

3. REPORT METHODOLOGY AND COSTS AND BENEFITS OF STREETCARS 21

Case Study Methodology ...... 22

Cost-Benefit Methodology...... 23

Streetcars: Costs and Benefits ...... 23

Costs: Initial Funding ...... 24

Costs: Ongoing Operations and Maintenance...... 26

Benefits: Rail versus Bus Transit ...... 28

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Benefits: Land Use ...... 30

Other Benefits ...... 32

Cost-Benefit Model: Cal-B/C ...... 33

4. CASE STUDY OF PORTLAND, OREGON ...... 35

Background and History ...... 35

Impacts of the Portland Streetcar ...... 39

Keys to Success...... 40

Lake Oswego Extension ...... 42

5. COSTS AND BENEFITS OF SACRAMENTO’S GREEN LINE ...... 48

Project Description...... 50

Upfront Capital Costs ...... 53

Light Rail ...... 54

Streetcar ...... 54

Enhanced Bus...... 57

Operations and Maintenance Costs ...... 58

Calculated Benefits ...... 60

Model Inputs ...... 61

Discounting Costs and Benefits ...... 66

Cost-Benefit Analysis Results ...... 66

Implications...... 69

6. SUMMARY AND RECOMMENDATIONS...... 72

viii

Report Summary ...... 72

Recommendations and Future Efforts ...... 76

Appendix A Cal-BC Parameters ...... 79

References ...... 81

ix

LIST OF TABLES

Page

1. Table 2.1: Review of Current U.S. Streetcar System Characteristics ...... 13

2. Table 2.2: Capital Costs of Streetcar Projects ...... 24

3. Table 5.1: Itemized Capital Costs for Green Line Alternatives ...... 53

4. Table 5.2: Annual Operating Costs for Green Line Alternatives ...... 59

5. Table 5.3: Interstate 5 Design and Travel Characteristics ...... 62

6. Table 5.4: Average Annual Daily Traffic on the Impacted Segment of Interstate 5 ...... 63

7. Table 5.5: Green Line Alternative Cal-B/C Model Inputs ...... 64

8. Table 5.6: Life-Cycle Costs, Benefits, and Net Present Value of Green Line Alternatives ...... 66

x

LIST OF FIGURES

Page

1. Figure 1.1: Map of Sacramento’s Light Rail Network ...... 10

2. Figure 1.2: Map of Planned Blue Line Extension...... 11

3. Figure 4.1: Map of Portland Streetcar ...... 37

4. Figure 5.1: Map of the Green Line Light Rail Project ...... 52

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1

Chapter 1

INTRODUCTION AND BACKGROUND

Following World War II, the structure of America’s land use patterns underwent a major shift from previous decades. The introduction of the automobile at the turn of the century, government programs to increase home ownership among returning soldiers, and a desire to flee, what were perceived as dirty, crime ridden cities caused American communities to expand at a more rapid and greater extent than any other time in previous history. However, over time, this new suburban lifestyle created its own set of challenges including dependence on unstable parts of the world for oil, air pollution, and traffic jams.

The 1970’s gave rise to growing concerns over environmental quality and congestion resulting in a movement toward more sustainable forms of transportation and development in the United States. Public transportation, as an alternative to automobiles, started to gain more widespread attention from city planners, environmental and social equality advocates, and elected officials. Between 1997 and 2007, federal transportation funding for transit increased by 135% from roughly $4 billion to nearly $10 billion

(Federal Transit Administration, 2011a). One mode of public transit that has gained attention in recent years is the streetcar. Streetcars were once a vital part of American infrastructure, but gave way to buses and cars in the first half of the previous century.

Today, they are beginning to make a comeback.

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Purpose of Report

The purpose of this report is to provide a primer on the use and function of

streetcars and evaluate their potential as a lower cost alternative to light rail in

Sacramento. To accomplish this, this report examines the history and purpose of

streetcars in the United States and Sacramento, provides a review of academic and

professional literature related to the implementation of streetcar projects, presents a case

study of two streetcar projects in Portland, Oregon and includes a cost-benefit analysis of

a potential streetcar project in Sacramento, California.

Specifically, this report will evaluate a streetcar alternative for a planned light rail project connecting downtown Sacramento to the Sacramento International Airport. The project, called the Green Line, is currently in the early planning and analysis phase. As with many large public works investments, the benefits associated with infrastructure projects such as light rail and streetcars are typically diffuse and long-term. It is important that decision makers have a thorough understanding of the potential costs of these projects and their potential to generate a stream of future benefits that can justify their expense. This report’s primary aim is to unravel the differences between light rail and streetcar technologies and how these differences affect the costs, function, and future benefits of each mode. However, a comparison of rail and bus transit, and the inclusion of an enhanced bus option for the Sacramento project analysis, provides additional context for decision makers attempting to review the merits of various transit projects.

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Media Attention for Streetcars

National and local news outlets have recently begun to pay more attention to streetcars. In 2008, the New York Times reported on the allure of the streetcar for

American cities. The article “Downtowns Across the U.S. See Streetcars in Their

Future” by Bob Driehaus (2008) describes the motivations for planning streetcar systems; easing traffic congestion, attracting private investment, and drawing residents out of the suburbs and back into downtowns. The USA Today article “Portland line sparks desire for streetcars” illustrates how the success of the first modern streetcar in the U.S. contributed to renewed federal interest in helping cities fund streetcar projects. In 2010, the U.S. Department of Transportation made over $250 million available for streetcar projects and changed long standing rules to make streetcar projects more competitive for federal money (Keen, 2010).

A number of recent articles in The Sacramento Bee highlight the potential return of streetcars to Sacramento. These articles have focused primarily on the Riverfront

Streetcar Project that would connect Sacramento and West Sacramento via the Tower

Bridge. An editorial entitled “Streetcars stage a Sac comeback” explained how officials and planners on both sides of the river hope to emulate the success of the Portland,

Oregon example with a streetcar that would attract new development and connect historic

Old Town Sacramento and Raley Field, home of the Sacramento Rivercats minor league baseball team. The idea has already garnered support from some local developers who have promised $5 million to the project (Editorial, 2010).

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In the fall of 2010, the Sacramento Area Council of Governments hosted a series

of public workshops to discuss transportation strategies for the region’s new long-range transportation plan, the Metropolitan Transportation Plan (MTP). The MTP largely sets the agenda for discussing the future of transportation in the Sacramento region. The public workshops emphasized the importance that SACOG and its regional partners place on public transit as a way to address growing air quality and congestion concerns, foster economic development, and improve the region’s quality of life. Tony Bizjak’s article

(2010), “Time to downsize downtown airport light-rail plan?” highlighted one of the ideas coming out of the MTP: to create a streetcar alternative for the planned extension of light rail to Sacramento International Airport. The idea reflects the thinking among some regional planners that streetcars may be a more affordable option for rail transit in the region compared to larger light rail projects. Chapter 5 takes a closer look at this idea and the costs and benefits associated with an airport to downtown streetcar option.

Layout of Report

Chapter 1 describes the goals and purpose of this report. The chapter also highlights the recent focus streetcars have received in both the national and local media that provides evidence of their widespread attention among cities as an affordable and valuable form of public transportation.

Chapter 2 reviews the current state of professional and academic literature related to the use, function, and planning implications of streetcars. This chapter also examines the efforts that other cities in the United States are making to bring streetcars back into

5 mainstream transportation and land use planning. The background research in this chapter is used to inform the cost-benefit analysis contained in Chapter 5 of the report.

Chapter 3 outlines the methodologies of case study and cost-benefit analysis and their usefulness for looking at transit options in Sacramento. This chapter also examines the costs and benefits of streetcars compared to light rail and bus transit options. The chapter concludes with a brief discussion of the California Department of

Transportation’s Cal-B/C model used in the cost-benefit analysis contained in Chapter 5.

Chapter 4 contains an in-depth case study of two streetcar projects in Portland,

Oregon. This chapter discusses the lessons learned in Portland that can inform decision makers about the potential for a Green Line streetcar alternative.

Chapter 5 includes a cost-benefit analysis of the Green Line with consideration of light rail, streetcar, and enhanced bus alternatives. This chapter concludes with findings and implications for future efforts on the project.

Chapter 6 summarizes the findings of this report for consideration by

Sacramento’s decision-makers, provides a set of final recommendations for future work on the Green Line project, and identifies needs for future research.

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Chapter 2

LITERATURE REVIEW

This chapter includes information compiled from a review of current professional

and academic literature dealing with streetcars. The chapter begins with a general

discussion of the historical form and function of streetcars in the United States and in

Sacramento. The chapter goes on to describe the purpose and operating characteristics of

streetcars as they exist today, through a review of a number of existing systems. A

comparison of streetcars, light rail transit, and bus rapid transit concludes the chapter.

Streetcars: Historical Context

Streetcars were once a common feature of the transportation system in cities across the United States. Beginning in the last decade of the 19th century and continuing

through the first 20 years of the 20th century, streetcar lines were built in most American

cities. In fact, by the 1920s, every city in the U.S. with a population over 5,000 had at

least one streetcar line (Reconnecting America, 2008). During this time, streetcars were

typically built and operated by private companies and developers. While streetcar lines

were frequently not profitable, they served to attract people to new developments and

developers would often build the infrastructure to support streetcars in advance of

beginning construction on new homes. Streetcar companies were also responsible for

maintaining the streets on which they operated and paid for some of first paved streets in

American cities (Reconnecting America, 2008; Burg, 2006).

Prior to the widespread adoption of streetcars in the 1880s onward, public

transportation was dependent on various horse-drawn vehicles such as stagecoaches,

7

omnibuses, and horse trams. Stagecoaches and their larger siblings, omnibuses, both ran on wheels with no defined guideways, while horse trams were essentially omnibuses on rails. The lower rolling resistance and higher efficiency of rails provided advantages including expanded range, passenger capacity, and comfort. However, the cost of feeding, stabling, and otherwise caring for the horses to power these forms of transportation was expensive and greatly limited the scope of horse-drawn transportation.

Several attempts to employ mechanized power, including steam engines, compressed air, and cable hauling were introduced throughout mid- to late-1800s, but each had its own set of problems. The Siemens & Halske firm first popularized the application of the electric motor and dynamo to a rail-guided vehicle in 1879, sparking a revolution in public transportation (Vuchic, 2007).

Streetcars gained popularity and widespread use throughout Europe and the

United States between 1880 and World War I. Sacramento got its first horse-drawn streetcar line in 1858. The first electric streetcars made their appearance in 1890. As

Sacramento grew, so did the streetcar lines, expanding service into the newly built suburbs of Oak Park, East Sacramento, Curtis Park, and Land Park (Burg, 2006).

However, ridership on streetcar lines across the country began to decline in the

1920’s as public and government support shifted from streetcars and densely populated cities, to automobiles and the increased freedom and mobility they promised. While cars were still a prohibitively expensive option for most of the American population, entities such as the General Motors Acceptance Corporation made access to credit readily available for automobile purchases. At the same time, fare revenues were declining for

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streetcar companies and the costs of building tracks and maintaining roads continued to

increase (Reconnecting America, 2008).

Gas-powered buses introduced in the 1930s were an affordable and flexible public

transportation option and began to replace streetcars as the primary form of intra-city

public transportation, particularly in the United States. Public transportation remained a

largely private enterprise, and companies interested in getting in on the latest technology,

the largest of which was National City Lines, started acquiring streetcar systems

throughout the country and converting them to gas-powered bus routes. As American

suburbs expanded further away from dense city centers, particularly following World

War II, expanding streetcar service became prohibitively expensive. Buses offered a

low-cost alternative that did not require additional costly infrastructure such as track and

power distribution. Buses could also quickly modify or add routes to serve new markets

(Vuchic, 2007; Reconnecting America, 2008). The same suburban, car-oriented

development that swept the rest of the nation following World War II, also changed

Sacramento’s development patterns. The downtown became a place where people would

come to work for the day, and then drive home to their quiet residential neighborhoods in

the suburbs (Burg, 2006).

Streetcar ridership experienced a short-lived comeback during World War II, but automobile purchases continued to rise and cars began competing for space on city roads.

By the mid-1940s, more and more streetcar companies folded, abandoning or removing

their tracks and retiring their streetcars (Reconnecting America, 2008). Today, only a

handful of the original systems remain, including the oldest continuously-run electric

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streetcar system in the world, the Saint Charles Line, in New Orleans, Louisiana

(Smatlak, 2010).

Beginning in the 1970s, American cities began looking to the past as a way to

address worsening congestion on the interstate and local road systems and worsening air

quality. Rail transit saw a revival beginning in the 1980s as American cities began

adding new light rail systems and reviving some of their old streetcar lines to enhance

their public transportation portfolios. Between 1980 and 2009, at least 27 light rail or

streetcar projects opened for operation in the United States. The San Diego Trolley, opened in 1981, and the Buffalo Metro Rail light rail system in 1984, were the first major new surface rail projects built in the United States since the 1930s (Metropolitan Transit

System, 2011; Niagara Frontier Transportation Authority, 2010).

A number of heritage streetcar systems, such as the F-Line in San Francisco and

the Charlotte Trolley in North Carolina were restored to operate on segments of their

original right-of-ways. However, these systems were designed largely to attract tourists

and add character to their respective cities. Only recently have streetcars begun to foster

wider attention as contemporary pieces of a modern public transit system. In 2001,

Portland, Oregon opened service on the first truly modern streetcar system in the United

States. A modern streetcar, is similar to the tourist-based heritage systems, but contains

newer technology, a more streamlined look, larger capacity, higher speed, and generally

offers more bells and whistles to make it an attractive, but more utilitarian form of transit.

The Portland streetcar’s ability to serve as an efficient and popular form of public

transportation, as well as its ability to trigger private investment along its route has made

10 the streetcar appealing to a number of cities trying to renew life in their urban cores

(Reconnecting America, 2008).

Sacramento joined the rail revival in 1987 when the Sacramento Regional Transit

District (Regional Transit) opened it’s first light rail line connecting downtown

Sacramento with the suburbs along Interstate 80. Sacramento’s light rail system evolved over the following two decades into its current form with two lines serving primarily residential communities along Interstate 80 and Highways 50 and 99 (see Figure 1.1).

Figure 1.1: Map of Sacramento’s Light Rail Network

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Source: Sacramento Regional Transit District, 2011

Regional Transit is currently planning two major extensions of the light rail system: an extension of the Blue Line to the City of Elk Grove and the addition of the

Green Line from downtown, through Natomas, to the Sacramento International Airport.

Figure 1.2 provides a map of the planned Blue Line extension, referred to as the South

Sacramento Corridor, Phase 2 Project. The Green Line extension is the focus of the analysis contained in Chapter 5.

Figure 1.2: Map of Planned Blue Line Extension

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Source: Sacramento Regional Transit District, N.D.

Recently, successful streetcar projects in other cities across the U.S., including

Portland, Oregon, have sparked a renewed interest in streetcars from Sacramento

residents and planners as an effective way to add character and attract development in the

city’s downtown and midtown neighborhoods. Currently, two streetcar projects are in

various stages of planning in Sacramento County and neighboring Yolo County. In the

city of Rancho Cordova, city planners and Regional Transit are considering a streetcar

loop to serve the 227,000 square feet of retail and adjacent neighborhoods in the Rancho

Cordova Town Center. In the city of Sacramento, city planners in both Sacramento and

adjacent West Sacramento, in Yolo County, are in the early stages of planning a streetcar

network that would connect the two cities; this connection would serve new and existing

development on either side of the American River (Sacramento Area Council of

Governments, 2008).

Streetcars: A Review of Existing Systems

Streetcars traditionally serve shorter distance, local trips, often providing last-mile

service from commuter transit to final destinations. Streetcars are an effective solution

for dense urban environments because of their ability to operate in mixed traffic without

significant alterations to existing right of way. A review of streetcar systems in the

United States confirms the relative short-distance nature of streetcar service. Table 2.1 includes summary statistics for a number of new and proposed streetcar systems.

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Table 2.1: Review of Current U.S. Streetcar System Characteristics

-

Seattle Tampa Tucson Tacoma Portland Kenosha Charlotte Little Rock Little Sacramento W. Sacramento

2001 2007 2003 2004 2003 2000 TBD TBD 2013 Open Service

ty / ty / City City Lead City / City / City / City / Ci City / City / Transit Transit Transit Transit Transit Transit Transit Transit Transit Transit Operator Operator Operator Operator Operator Operator Operator Agencies

Length 8 miles System System 10 miles 2.2 miles 3.9 miles 2.6 miles 2.4 miles 3.5 miles 2.4 miles 1.9 miles

Rate Rate Rate Rate Rate Rate ------Fare Free Zonal Free on Flat Flat Flat Flat Flat Flat Collection starter line starter Discounted Discounted Discounted Discounted

6 4 - Trip N/A N/A Avg. Avg. TBD 1 mile blocks Length <1 mile <1 0.6 miles 0.7 miles 1.1 miles

Stop 1200 - 4 blocks 4 blocks 4 blocks 4 blocks Spacing 1/4 mile 1/4 mile 1/4 1/4 mile 1/4 2 blocks 1400 feet 3 - 2 - 2 - 3 - Source: Fehr & Peers, 2010; Fort Worth Planning and Development Department, 2008;

HDR, 2007; Reconnecting America, 2008

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Table 2.1: Review of Current U.S. Streetcar System Characteristics Continued…

-

of Flow Flow Flow Flow Flow Flow Flow Flow Flow ------Way xed Right / Separated / Separated Mixed Mixed Mixed Mixed Mi Mixed Mixed Mixed Mixed

Type Vehicle Modern Modern Modern Modern Modern Heritage Heritage Heritage Heritage

15 17 12 - 15 - minutes minutes 15 minutes Frequency 10 minutes 10 minutes 15 minutes 10 minutes 25 minutes 15 minutes 7 - Source: Fehr & Peers, 2010; Fort Worth Planning and Development Department, 2008;

HDR, 2007; Reconnecting America, 2008

In addition to providing an effective transportation option, streetcars can attract significant private investment making them appealing to cities looking to redevelop downtowns. In Tacoma, Washington, a planned streetcar extension has garnered stakeholder support as a way of attracting new businesses and residents to neighborhoods, enhancing the use of existing assets, increasing public transit use, and bringing in new visitors to the downtown core (Fehr and Peers, 2010). A feasibility study for a new streetcar in Denver, Colorado, cites enhanced mobility and economic investment as the primary motivations for the project (Fehr & Peers, 2010). This mentality is mirrored in other streetcar projects across the country from Portland, Oregon to Miami, Florida (Fehr & Peers, 2010; Reconnecting America, 2008).

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Streetcars, particularly restored heritage vehicles, are also a popular feature for tourist-based downtowns and can serve to lure additional tourist traffic to existing businesses. The F-Line in San Francisco is one of the most well known tourist-based streetcar systems in the United States with more than 50 historic streetcar vehicles, each with its own unique styling and history (Market Street Railway, 2011). The streetcars of

Kenosha, Wisconsin are that city’s top tourist attraction, visiting a number of museums, historic and modern neighborhoods, shopping centers, and shoreline attractions along

Lake Michigan (Kenosha Streetcar Society, N.D). Similar systems operate in Tampa,

Florida, Little Rock, Arkansas, and New Orleans, Louisiana. The Sacramento to West

Sacramento planned streetcar system will also run heritage streetcars through historic Old

Town Sacramento and visit other points of interest including Raley Field in West

Sacramento (HDR, 2007).

The operating characteristics of streetcars describe the manner in which they perform their functions as public transportation. These characteristics include spatial components such as distance between stops and integration or separation from other traffic as well as logistical components such as fare collection, service frequency, speed, single or multiple cars, and distribution of operational responsibilities. The operating characteristics of streetcars provide context to their function as a public transportation option and the type of travel they are designed to facilitate.

The streetcar systems reviewed in Table 2.1 are representative of typical streetcar systems in the United States. The system lengths are between one and ten miles with stops every several blocks to quarter mile. The vehicles run in mixed-flow traffic or a

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combination of mixed-flow and separated right-of-way. Trip lengths are short, one mile or less, indicative of the “pedestrian accelerator” nature of streetcars. The time between pick-up and arrival of the next vehicle at each stop (referred to as service frequency) is less than 15 minutes on average, but varies depending on the system. In contrast, many commuter bus or light rail systems have frequencies of 30 minutes or more, though this varies tremendously across systems and can change to meet demand throughout the day.

Fare structures vary from free and discounted fares to zone-based and flat rate

fares. Streetcar fares are often cheaper than other types of transit service because the

distances traveled are so short and the purpose of the streetcar goes beyond public

transportation. For example, the planned Riverfront Streetcar connecting the cities of

Sacramento and West Sacramento will charge a flat rate of 50 cents per trip, significantly

cheaper than the $2.50 base fares charged for light rail and bus trips on Regional

Transit’s system. This likely has a lot to do with the purpose of the streetcar as more than just another public transportation option. According to the Riverfront Streetcar

Feasibility Study, the streetcar “…is an urban circulator and a pedestrian accelerator, intended to support the “walkable urbanism” of both Downtowns and their shared riverfront. Further, the streetcar reinforces the expansion of a truly urban environment through redevelopment” (HDR, 2007).

The feasibility study goes on to describe the nature of anticipated trips on the streetcar as primarily not “home-to-work” trips. HDR (2007) describes the type of trips expected to dominate the Riverfront Streetcar including:

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• Lunch or dinner trips by workers who have commuted downtown by transit or who “park once” and then walk or use the streetcar for other trips

• Downtown workers on both sides of the River crossing to go to retail, restaurant, office, and other inviting destinations

• Trips between business locations for mid-day meetings

• Visitors circulating between the hotel and convention center core in Downtown and destinations in Old Sacramento, along the waterfront, Midtown and the Crocker Art Museum

• Lunch or dinner trips by downtown residents

• Residents, employees and visitors visiting Raley Field

• Employees and visitors connecting to the larger regional transit network, and - in the next stage of the project - to the Capitol Corridor at the Amtrak station (p. 3-4)

As “pedestrian accelerators” and “urban circulators” streetcars are attractive to cities as revitalization tools. While streetcars do enhance mobility, a primary goal of most transit operators, they typically do little in terms of overall travel time savings, a key component in the decision making process for many transit projects. However, the secondary benefits of streetcars, in terms of private investment attraction and enhancement of the urban environment, cause many cities to become involved as champions of the projects. In seven of the nine cases illustrated in Table 2.2, the cities have a vested interest as owners and/or operators in the streetcar systems.

Streetcars and Light Rail Transit

Streetcars share a number of operational similarities with light rail transit. In fact, many of the first light rail transit systems in the United States were upgraded former

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streetcar lines. The primary differences between the two modes include exclusivity of

right of way, signal controls at intersections (most light rail systems utilize priority signal

controls and crossing arms at major intersections), station design, stop spacing, vehicle

size and capacity, and maximum speeds (Vuchic, 2007).

Much of the difference between traditional streetcar and light rail transit comes

down to purpose. Streetcars are typically best suited for local transportation needs where

the travel distances are measured in blocks or sub-mile increments. Light rail transit

often extends ten miles or more from a downtown or central business district into

surrounding suburban development and travels at high speeds, picking up and dropping

off passengers every mile or so. Streetcars can provide useful complementary service to

light rail transit by providing “last-mile” service for commuters exiting the light rail vehicle a short distance away from their final destination (Weyrich and Lind, 2002).

The differences between light rail and streetcar are not necessarily so clear. Some modern streetcars are capable of reaching higher speeds than their traditional cousins, albeit not the 55-plus miles per hour (MPH) of light rail. This has lead some planners to view streetcars as a potentially lower cost alternative to light rail for short to medium distance commutes of less than ten miles (Reconnecting America, 2008). Rather than restricting streetcars to shared right-of-way, these “rapid-streetcar”, or hybrid-streetcar systems would run vehicles in a mix of shared and exclusive right-of-way. These vehicles could reach speeds of 40 to 45 MPH on separated sections of track and provide adequate service for shorter distance commutes in relatively low-traffic corridors. The systems would still achieve a “higher quality” service compared to bus transit, but at

19 potential cost savings over large light rail systems meant for high-speed and high-volume corridors (Henry, 2007).

Bus Rapid Transit

Another option available to modern public transportation systems is bus rapid transit (BRT) or enhanced bus. BRT is to the standard bus as light rail transit is to streetcars. BRT vehicles are typically larger than standard buses and designed with more attention to passenger comfort and ride quality, but do not rely on tracks like light rail or streetcars. They stop less frequently than standard buses and often operate within dedicated right-of-way or receive preferential treatment in mixed-flow traffic. BRT systems typically employ more technology such as signal priority and GPS vehicle tracking linked to passenger information signs to improve service. Stations for BRT are typically larger and contain more passenger amenities than standard bus stops. All of these traits combine to give BRT an image of greater reliability and higher quality service than standard bus service (Vuchic, 2007). However, as with hybrid-streetcar and light rail transit, the line between BRT and standard bus service is not always clear. Vehicles can be used interchangeably and various technologies can be used to improve the service of either mode.

Also similar to streetcar and light rail service, the difference between BRT and standard bus service boils down to purpose. BRT performs much the same function as light rail transit, facilitating travel between destinations typically more than ten miles apart, with limited stops to increase speed. The lower upfront capital costs of BRT make it a less expensive alternative to light rail, and in some instances a first step for future

20 light rail service. In King County, Seattle, the RapidRide project along State Route 99 is utilizing BRT along what is planned to become a future light rail corridor. The operator,

King County Metro Transit, intends to build a base of transit ridership along the corridor before investing in a capital-intensive rail project (Henry and Dobbs, 2009).

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Chapter 3

REPORT METHODOLOGY AND COSTS AND BENEFITS OF STREETCARS

This report examines the potential for a streetcar alternative on the proposed

Green Line light rail extension in Sacramento, CA. The Green Line is a 12.8-mile addition to Regional Transit’s light rail transit system. The corridor travels from downtown Sacramento, through South and North Natomas, to the Sacramento

International Airport. Regional Transit has studied the Green Line corridor a number of times since the 1980s. Thus far, Regional Transit has completed administrative and programmatic environmental analyses and an alternatives analysis on the project. In

November 2010, Regional Transit completed a Transitional Analysis Report (Transitional

Report) intended to identify the most cost effective options for the project, make recommendations for a preferred option, and develop a timeline and action plan for obtaining federal funds for the project (Sacramento Regional Transit District, 2010).

SACOG is responsible for updating the region’s long-range Metropolitan

Transportation Plan (MTP) every four years. The MTP is a federal and state required planning document that must meet certain financial constraint requirements with a plan for investing transportation revenues over at least a 20-year period. SACOG is currently working on an update to the MTP, which reflects a less optimistic view of transportation funding in the future than previous MTPs. In response to these more conservative financial assumptions, SACOG is seeking out ways to meet the region’s transportation needs with strategic and often scaled back road and transit investments. Regional

Transit’s Transitional Report studied a number of issues related to primarily traditional

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light rail transit for the Green Line project. However, SACOG is interested in

determining if a streetcar alternative could achieve the goals and objectives outlined for

the Green Line, and at the same time realize cost savings over traditional light rail.

This report utilizes both case study and cost-benefit analysis to examine whether a streetcar is a workable solution for the Green Line. Additionally, in the case that streetcar is a feasible option, the report seeks to uncover potential cost savings and other ancillary benefits of a streetcar alternative compared to light rail.

Case Study Methodology

Case study analysis can be a useful tool for uncovering potential, and sometimes hidden, challenges and opportunities based on the experiences of others. According to

Babbie (2007), a case study typically examines a single instance or event with the intention of producing explanatory insights that contain valuable lessons for practitioners in the future. In this case, the lack of much empirical research in current literature makes a case study an appropriate method for investigating the advantages, challenges, and opportunities for a streetcar project in Sacramento.

This report will utilize information on two streetcar projects in Portland, Oregon.

The case studies will incorporate information from various reports, websites, and public meetings. The research will focus on the physical, technical, financial, and political conditions that have contributed to the success of streetcars in Portland. This report uses the existing Portland streetcar as a case study because of its wide recognition across the

United States as an extremely successful modern streetcar project. The planned Lake

Oswego extension is attempting to apply streetcar technology to a commuter corridor,

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which would typically be served by bus or light rail. The motivations behind the cities of

Portland and Lake Oswego’s decision to choose streetcar for this corridor may provide

some insights useful for examining a streetcar alternative for the Green Line project.

Cost-Benefit Methodology

Cost-benefit analysis is a useful tool for determining the cost effectiveness of public works projects as well as comparing the merits of various alternatives. The

Federal Highway Administration (2007) explains that the purpose of cost-benefit analysis

is to “…capture all benefits and costs accruing to society from a project or course of action, regardless of which particular party realizes the benefits or costs, or the form these benefits and costs take.” Essentially, the goal of cost-benefit analysis is to measure the economic merit of various projects.

This report attempts to quantify a number of costs and benefits identified in the review of literature associated with a streetcar alternative compared to light rail for the

Green Line. Where quantitative measures cannot be calculated, a qualitative analysis provides a general summary of potential costs and benefits. The next section outlines the costs and benefits associated with streetcar projects.

Streetcars: Costs and Benefits

Planners and local officials need to be aware of the costs and potential benefits of

major infrastructure projects to facilitate informed decision-making. This section

describes the various costs and benefits of streetcars identified in applicable literature and

recent experiences from other cities. The major costs associated with any streetcar

project include the initial capital investment for right-of-way, track, power systems, and

24

vehicles as well as ongoing operations and maintenance costs. The potential benefits of

streetcars include improvements to system performance such as increased transit

ridership, reductions in vehicle operating costs and miles traveled, congestion relief,

travel time savings, system safety, and improved air quality. Other benefits include

positive changes to land use patterns and attraction of private investment.

Costs: Initial Funding

In comparison to bus transit, electrified rail transit involves a high amount of initial investment in infrastructure including tracks, power distribution wires, and power substations. In addition, both rail and bus services require supportive infrastructure such as maintenance facilities and storage yards. The cost of streetcar projects can vary greatly among cities. Table 2.3 describes the total capital costs of the streetcar systems introduced in Chapter 2.

Table 2.2: Capital Costs of Streetcar Projects (in millions)

Seattle Tampa Tucson Tacoma Portland Kenosha Charlotte Little Rock Little Sacramento - West Sacramento

Cost $103 Total Total $5.20 TBD $52.10 $78.20 $27.10 $48.30 $53.10 Capital Capital $198.00

Mile $7.80 $2.60 TBD $27.5 $12.90 $20.10 $ 32.60 $20.10 $14.90 Capital Capital Cost per Cost per Fehr & Peers, 2010

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Even among the nine cities listed above, the cost of streetcar projects range

between $2 million and $33 million per mile. The variation is less when systems are

divided between heritage and modern. The modern systems range between $12 and $33

million per mile, while the heritage systems range between $2 and $20 million per mile.

A number of factors, including the need for new right-of way, alterations to existing infrastructure, and design standards all play an important role in determining a project’s final cost. The high cost of the system in Tacoma, Washington, is likely due to the fact that it was built to light rail standards to facilitate interoperability between streetcar and light rail systems (Fehr & Peers, 2010). Light rail infrastructure tends to be more expensive because of the need for heavier tracks and more robust power systems

(Reconnecting America, 2008).

Some cities are beginning to explore the idea of blending the characteristics of both light rail and streetcar into a hybrid form of small-scale commuter rail transit. This

“rapid streetcar” concept discussed briefly in Chapter 2 incorporates some of the more affordable elements of streetcars with the commuter style service of light rail. These systems may operate on a combination of mixed-flow and exclusive right-of-way, incorporate less expensive stations similar to standard bus stops, and may use smaller vehicles with less capacity than standard light rail. This concept is the basis for the Lake

Oswego extension in Portland and helps to inform streetcar alternative for the cost- benefit analysis of the Green Line project.

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Costs: Ongoing Operations and Maintenance

Operating and maintenance costs for a streetcar system can be broken down into a number of categories including wages and benefits, power costs, maintenance and repair of vehicles and infrastructure, fare collection expenses, and vehicle licensing and registration (Vuchic, 2005). Streetcar operating costs vary widely among systems due to various institutional arrangements and system characteristics. Some systems use volunteer labor or receive private subsidies; the number and size of vehicles affect demand for power; and the type of fare collection system, if fares are collected, influence the maintenance and upkeep costs of the collection technology (Reconnecting America,

2008; Weyrich and Lind, 2002).

A common way to measure operating costs is cost per vehicle revenue hour

(VRH). According to the Federal Transit Administration (2011b), a vehicle revenue hour includes “the hours that vehicles travel while in revenue service.” This excludes any time vehicles spend changing routes, traveling to maintenance facilities, or any other time the vehicle is not available to pick up passengers. Operating costs for streetcar systems can have a wide variance from $60 to nearly $300 per VRH (Fehr and Peers, 2010).

Evidence on the operating costs of rail transit suggests that light rail and streetcar can be more cost effective than bus service on a per passenger basis. Based on data available through the National Transit Database (Federal Transit Administration, 2009a), nationwide, light rail, including streetcar, is a little more than double the cost of bus on a per VRH basis, roughly $116 per hour for bus and $237 for light rail. However, rail transit is capable of carrying more passengers in a single trip than bus service.

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Additionally, trains can be coupled together to expand capacity when passenger demand

is high, a trait that buses cannot replicate. Nationally, the average cost per passenger for

light rail transit is 13% less than bus service (Federal Transit Administration, 2009a).

The implication of the difference in cost per VRH and cost per passenger between bus

and light rail is that rail can be a more cost effective option, in terms of operations, if

passenger demand along the alignment is high enough to require more capacity than

standard bus service can afford.

Differences in the operating cost between light rail and streetcar are not as easily measured. The National Transit Database does not currently differentiate between the two modes, and only a limited number of cities currently operate both light rail and streetcar. Theoretically, streetcars should be less expensive to operate and maintain than light rail for several reasons. Streetcars can achieve savings by sharing in the costs of maintaining shared right-of-way in contrast to the exclusive right-of-way used by most light rail systems. Stations are typically simpler and easier to maintain, as are fare collection systems. On average, streetcars draw less power than light rail vehicles due to their slower speeds and lighter weight. Additionally, where streetcars utilize trolley wire rather than catenary distribution systems, the cost of maintaining the power system can be less than typical light rail (Reconnecting America, 2008; Weyrich and Lind, 2002).

Among the top 50 transit agencies, in terms of total passenger trips, reported by the National Transit Database, the cost for operating light rail varies between $109 and

$441 per VRH (Federal Transit Administration, 2010). As mentioned above, operating costs for streetcars range from $60 to $300 per VRH. With so much overlap between the

28 range of costs for streetcar and light rail systems and the limited number of streetcar systems currently operating in the U.S., it is difficult to say definitively that streetcars are less costly to operate than light rail. However, in Portland, Oregon, the cost per VRH for the light rail system is $197 while the modern streetcar system operates for about $153 per hour or 22% less (Reconnecting America, 2008; Federal Transit Administration,

2010). While more study is warranted on the difference in operating costs among streetcars and light rail, the Portland example provides one instance in which streetcar can achieve some operational savings over light rail.

Benefits: Rail versus Bus Transit

Streetcars, and rail transit in general, offer a number of economic, social, and environmental benefits that should be of interest to planners and local government officials. A recent study for the Victoria Transport Policy Institute by Todd Litman

(2011) took a comprehensive look at the benefits of rail transit to transportation system performance in American cities. The study found that rail transit has the potential to improve performance over systems with bus transit alone. In cities such as New York,

Washington DC, Boston, San Francisco, Chicago, Philadelphia, Baltimore, and

Pittsburgh where rail is a major component of the transportation systems, vehicle ownership and miles traveled by vehicles were significantly reduced and transit ridership significantly increased compared to cities with no rail transit. The benefits of these changes included fewer traffic fatalities, household savings on transportation expenditures, lower transit operating costs per passenger, improved fitness and health of residents, more efficient land uses, and higher property values. The study found that

29 these benefits were also experienced by cities with much smaller rail transit systems

(Litman, 2011).

The magnitude of the benefits experienced in a given city depend largely on the scale of the rail system in that city, however Litman (2011) found that when compared to cities with bus transit only, cities incorporating rail service experienced:

• An increase in transit ridership of 50% to 100%

• An increase in transit mode share of 90% to 400%

• A decrease in vehicle miles traveled of 9% to 20%

• A decrease in traffic related deaths of 15% to 36%

• A decrease of up to 14% in annual consumer spending on transportation

• An increase in the share of operating costs recovered by fare revenues of

up to 58%

A commonly referenced benefit of rail transit is that it attracts more choice riders than standard bus service. Choice riders include the group of people that have the option to drive for regular trips to work or errands, but choose to take transit instead. Choices may be based on environmental, economic, or personal preferences, but are largely influenced by the perceived quality of transit service. Schumann (2005) conducted a comparative study to examine the affect the introduction of light rail had on transit ridership in Sacramento compared to Columbus, Ohio, a city of similar size that did not introduce light rail. In 1985, Sacramento began building its light rail system. By 2002, the number of trips taken on transit per capita had increased 15%. During the same time,

30 the number of transit trips per capita in Columbus fell by 47%. The author argues that difference between the performances of the two transit systems are directly related to the perceived higher quality service light rail provides to choice riders.

Benefits: Land Use

Suburban development contributes to higher congestion and auto emissions; it stretches the ability of local governments to provide essential services such as fire and police by expanding urban service boundaries; and, particularly in California, encroaches on valuable agricultural and open space lands. However, as noted in Weyrich and Lind’s

(2002) study “Bring Back the Streetcars! A Conservative Vision of Tomorrow’s Urban

Transportation,” the suburbs are desirable because their many qualities including lower crime rates, less traffic, and larger homes. However, the authors note a growing trend across the U.S. of revitalized downtowns and city centers that provide a concentration of entertainment, shopping, and even jobs for suburban dwellers. Additionally, a growing number of Americans, particularly those without children, are moving to denser, urban neighborhoods for the convenience of walking, biking, or taking transit to a number of destinations close to home (Weyrich and Lind, 2002).

One of the more common benefits cited by planners and decision makers when discussing light rail and streetcar transit is their ability to stimulate positive changes in the built environment of urban cores. According to Reconnecting America (2008) streetcars do not necessarily cause development to happen, but rather create a set of conditions that are conducive to high density, walkable, transit-oriented development.

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While streetcar and light rail transit both stimulate changes to land use patterns, the type

of development they inspire can look quite different.

The changes to the built environment that accompany light rail transit typically

occur in a nodal pattern within a half-mile radius of major stops and stations

(Reconnecting America, 2008). The existence of park-and-ride lots diminishes the densification and transit-oriented development impacts of light rail stations by taking up valuable space adjacent to stations and catering to suburban, car-oriented lifestyles.

However, light rail projects are frequently intended to serve suburban communities and reduce the number of car trips from major residential developments into suburban employment centers and central business districts. Park-and-ride lots adjacent to stations tend to increase ridership on this type of transit and are consistent with the goal of reducing vehicle miles traveled on major arterials and highways. Kuby et. al. (2004) found that park-and-ride facilities had a significant positive impact on boardings at suburban rail stations adding one to two passengers for every two parking spots available.

The land use changes associated with streetcar projects support a different type of goal from light rail projects. As interurban circulators, or pedestrian accelerators, streetcars are smaller, slower, and less obtrusive than light rail transit. They are much better suited for compact, mixed use, pedestrian-oriented development and are often used to help encourage this type of environment. Rather than the nodal style development associated with light rail transit, streetcars encourage linear, “ribbons” of dense development. Many cities are eager to attract this kind of development for its ability to

32 reduce congestion and emissions, as well as its ability to attract private investment

(Reconnecting America, 2008).

Little research exists beyond case studies that can help to quantify the land use impacts and development benefits of streetcars. Golem and Smith-Heimer (2010) examined 14 streetcar systems operating in the U.S. to determine how the systems influence the neighborhoods they serve. Based on interviews with representatives of the systems evaluated, most of the representatives expressed experiencing positive effects on the built environment through new development and enhanced revitalization efforts.

However, the authors note that interviewees rated the impacts in a wide range of mild to strong. A significant lack of data as well as a weak economy made demonstrating positive impacts very difficult (Golem and Smith-Heimer, 2010).

Other Benefits

The literature related to streetcars is still young and has much room for growth.

Little data is available beyond ridership to measure the impacts of streetcars. However, the Federal Highway Administration (2007) describes a number of additional benefits that should be part of any analysis for transportation projects. These benefits include:

• Travel time savings

• Congestion relief

• Emission reductions

• Safety improvements

• Vehicle operating cost savings

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Other benefits may not be as tangible, such as those related to quality of life and

happiness. Weyrich and Lind (2002) describe the streetcar of America’s past as a

“virtually perfect integration of a highly attractive, widely desirable means of public

transit…with the environment in which it operates.” These less tangible benefits of

streetcars are beyond the scope of this paper’s analysis, but are nonetheless an important

component that should be considered by decision makers through active public

participation processes and stakeholder outreach.

Cost-Benefit Model: Cal-B/C

The analysis presented in Chapter 5 uses a cost-benefit model maintained by the

California Department of Transportation. The Cal-B/C model is a spreadsheet-based tool designed to conduct cost-benefit analyses of highway, transit, and passenger rail projects.

Based on user inputs, the model calculates life-cycle costs, net present values, benefit-

cost ratios, internal rates of return, payback periods, annual benefits, and life-cycle

benefits. The benefits calculated by the model are as follows:

• Travel time savings (reduced travel time and new trips)

• Vehicle operating cost savings (fuel and non-fuel operating cost reductions)

• Accident cost savings (safety benefits)

• Emission reductions (air quality and greenhouse gas benefits)

(System Metrics Group Inc., 2009).

The model is useful for projects that provide parallel transportation to the existing

highway system. The benefits of each project are based in large part on improvements to

travel conditions on the impacted highway segment and, for transit projects, shifts in

34 volumes from the highway facility to the new or improved transit service. The model is not capable of measuring positive or negative impacts to surrounding local roads, which limits its use to projects that are primarily intended to provide complementary service to or improve travel along a specific highway segment. The Cal-B/C model is useful for an analysis of the Green Line because the project runs roughly parallel to Interstate 5 and travel between the airport and other destinations along the planned alignment are currently accessed, at least in part, by cars traveling along the interstate. However, some impacts of the project will not be captured in the analysis. The implications and recommendations based on the model outputs consider this fact.

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Chapter 4

CASE STUDY OF PORTLAND, OREGON

This chapter presents a case study of the Portland, Oregon streetcar and one of its planned extensions. The Portland streetcar was the first modern streetcar system built in the United States. In its first four years in service, the project helped to attract nearly 100 redevelopment projects worth in excess of two billion dollars (Reconnecting America,

2008). The success of Portland is cited in numerous planning documents, studies, and reports as a benchmark for streetcar projects in cities across the United States hoping to replicate the Portland experience. The purpose of this case study is to examine the keys to the success of the Portland project and the impacts the streetcar have had on the city.

The lessons learned in Portland can provide important insights for Sacramento and other cities hoping to create successful streetcar projects in their own jurisdictions. This chapter will provide background on the Portland project, discuss the political, social, and practical elements that lead to its completion and ultimate success, and highlight the benefits that have emerged in the years since its initial startup.

Background and History

Like most U.S. cities, Portland once had a robust streetcar network that helped to shape the city in its formative years. The City of Portland began discussing the idea of reintroducing streetcars as part of the 1988 Central City Plan with a primary goal of catalyzing redevelopment and infill in the city’s aging industrial centers (City of Portland

Bureau of Transportation, 2009).

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Planning for Portland’s streetcar began in 1990 when the city initiated a feasibility study to examine the potential for a streetcar to serve downtown and bring a spark to redevelopment efforts in the central city. The city began operating its streetcar service in

2001 on a 4.8-mile loop connecting the campus of Portland State University, south of downtown, to the Legacy Good Samaritan Hospital in the northwest edge of the city.

Subsequent extensions of the service between 2005 and 2007 brought the total length of the system to eight miles. Portland’s system picks up and drops off passengers every three to four blocks at simple stations consisting of extensions of the sidewalk into the parking lane with basic signs, shelters, and leaning rails (City of Portland Bureau of

Transportation, 2009). The map in Figure 4.1 shows the current alignment of the streetcar route.

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Figure 4.1: Map of Portland Streetcar

Source: Portland Streetcar Inc., 2011.

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According to a report prepared by the Portland Office of Transportation and

Portland Streetcar Inc. (2006), the goals for Portland’s streetcar have remained consistent

and clear since it’s inception:

• Use a commitment to a high quality transit service as an incentive for

high-density mixed-use development within the Central City.

• Link neighborhoods with a convenient and attractive transportation

alternative and attract new transit ridership.

• Connect major attractions in the Central City with high quality transit.

• Build and operate in mixed traffic and on existing right-of-way at

lower cost than other fixed rail options.

• Fit the scale and traffic patterns of existing neighborhoods.

• Reduce short inner-city auto trips, parking demand, traffic congestion

and air pollution. (p. 1-2)

Since its opening date, the Portland Streetcar has met and exceeded it

original goals, garnering the project nationwide interest and publicity. It its first

two years of operations, the starter line from Portland State University to the

Legacy Good Samaritan Hospital experienced ridership levels 60% higher than

initial projections (Cooper and Furmaniak, 2003). Successive expansions of

service experienced similar success. Between July 2005, when service opened on

the Southwest RiverPlace line and June 2009, 22 months after service opened on the South Waterfront line, annual ridership grew from 2.2 million per year to over

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4 million per year. In total, on the Portland streetcar has grown by an average of

22% per year since 2001 (Portland Streetcar Inc., 2011).

Impacts of the Portland Streetcar

Portland has received a lot of national attention for the positive impacts the streetcar has had on the city. According to a study by E.D. Hovee and

Company (2005), the streetcar has changed the pattern of development in

Portland’s central business district. Since the alignment for the streetcar was announced in 1997, more than half of all new development in the central business district has taken place within one block of the streetcar line. Historically, the same land accounted for less than 20% of new development. The streetcar has also allowed the city to realize densities closer to the zoned densities along the streetcar alignment. Densities within one block of the streetcar line have consistently achieved 90% of the zoned potential, whereas prior to the streetcar, the average was less than half the zoned density (E.D. Hovee and Company,

2005).

The neighborhoods and districts along the streetcar alignment have experienced tremendous growth, at least in part due to the streetcar and other pedestrian focused amenities compared to the rest of the city. As of 2008, over

$3.5 billion in private investment had occurred within two blocks of the streetcar line including over 10,000 new residences and more than 5 million square feet of retail, office, institutional, and hotel uses. The size and scope of development has gradually increased as developers have built one successful project after another.

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Some of the first projects along the streetcar line included six-story developments at 131 units per acre. A development project currently under construction along the South Waterfront extension of the streetcar includes 21 to 35 story condominium towers and will eventually add a projected 5,000 new housing units and 10,000 new jobs to the Central City (Office of Transportation and Portland

Streetcar Inc., 2006).

Keys to Success

Much of the success of the Portland Streetcar is due to the close integration of the city’s land use and transportation goals and alignment between public and private interests. The city has chosen alignments for each segment of the network with close attention to connecting major destinations and ridership generators through corridors targeted for infill and redevelopment. The initial streetcar loop was selected specifically to serve the University and Hospital because of their potential to generate riders for the line. The city strategically chose to run the alignment through the Pearl District, which was just beginning to transform from a former warehouse and industrial center into a mixed-use, walkable urban neighborhood (City of Portland Bureau of Transportation,

2009).

The city chose to integrate streetcars into their planned developments, in part, because of their ability to fit seamlessly into the urban environment. Streetcars, which are smaller than traditional light rail vehicles, are less obtrusive and blend in with the walkable, urban neighborhoods Portland was trying to create. Additionally, Portland paid close attention to minimizing costs by limiting special treatments such as exclusive right-

41 of-way and non-essential amenities at stations, thus increasing the project’s cost effectiveness and appeal. The final cost of the project was roughly $103 million or slightly less than $13 million per track mile (Portland Streetcar Inc., 2008). For comparison, the cost of constructing the MAX light rail project to Portland’s airport was roughly $63 million per mile (Federal Transit Administration, 2009b).

The city also credits a great deal of the project’s accomplishments to creative partnerships between the public and private sectors. The city was able to attract private attention by committing to build and operate high quality transit service serving properties owned by developers and business interests. Agreements drafted between developers and the city pegged housing densities along the alignment to publicly financed improvements and created a partnership in which both public and private institutions could count on each other to follow through on obligations. A substantial piece of the project cost was raised through the establishment of a Local Improvement District that included business owners along the line that would benefit from the improved accessibility to their locations (Office of Transportation and Portland Streetcar Inc.,

2006).

Portland Streetcar Inc., a private non-profit corporation handled the design and construction of the streetcar and is responsible for its daily operations. The corporation maintains a lean staff of fewer than 30 employees and is governed by a Board of

Directors made up of members from the public and private sector constituents along the streetcar’s alignment. The diverse make-up of this group was important in garnering public support and stakeholder involvement in the project and played a critical role in

42

allowing the public portion of the project to progress in sync with private development

(Office of Transportation and Portland Streetcar Inc., 2006).

A final key piece of the puzzle was the reduced parking requirements along the

line. The accessibility offered by frequent and reliable transit service facilitated

development at much higher densities with less parking than other parts of the city.

Providing parking, particularly in a downtown environment, can significantly increase the

cost of a development project in proportion to potential profits. Allowing less space to be

dedicated to parking created more financially attractive projects for developers in close

proximity to the streetcar line (Office of Transportation and Portland Streetcar Inc.,

2006).

Lake Oswego Extension

In February 2011, the cities of Portland and Lake Oswego, along with a number of other partners, recommended an extension of Portland’s streetcar system that would provide a connection between the two cities. The project will add a roughly 6-mile extension from the current end of the streetcar line in South Waterfront, south along the

Willamette River to the City of Lake Oswego (Lake Oswego to Portland Transit Project

Steering Committee, 2011). The Lake Oswego extension is considered a hybrid of the modern streetcar design operated in Portland’s city center and more traditional light rail service. The rapid-streetcar design blends the lessons learned during the construction and operation of the Portland streetcar with a faster, commuter style service more often associated with light rail, in a more affordable package. The Lake Oswego streetcar will

43

use the same vehicles currently used in Portland, incorporate lower cost infrastructure,

simple stations, and run in a mix of shared and exclusive right-of-way.

The streetcar recommendation for the Portland to Lake Oswego transit corridor is

based on a Draft Environmental Impact Statement (DEIS) released in December 2010,

which considered a number of improvements to Highway 43 (running between the two

cities) and various forms of river transit, bus rapid transit, commuter rail, light rail, and

streetcar. Compared to other alternatives, the streetcar most thoroughly satisfied the

project purpose identified in the DEIS alternatives analysis. The purpose statement from

the DEIS states that the project should “…optimize the regional transit system by

improving transit within the Lake Oswego to Portland transit corridor, while being

fiscally responsive and by supporting regional and local land use goals. The project

should maximize, to the extent possible, regional resources, economic development and

garner broad public support” (Federal Transit Administration et. al., 2010).

While bus rapid transit, light rail, and streetcar all met the project purpose; the per passenger operating cost of both light rail and streetcar was more than 20% less than comparable bus rapid transit service. Despite this, the significantly lower capital costs,

87% lower than streetcar and 89% lower than light rail, of bus rapid transit made this a viable alternative. The DEIS dismissed light rail as a viable alternative due to its high initial capital costs, 17% higher than streetcar, and impacts on the surrounding

communities (Federal Transit Administration et. al., 2010).

The Steering Committee’s recommendation for a rail alternative over bus rapid

transit was primarily based on rail transit’s ability to attract more riders, accommodate

44 future transit needs, support land use and development goals, and foster a greater reduction in automobile dependence. The Committee determined that streetcar would sufficiently meet the demand along the corridor and that the greater capacity and speed of traditional light rail did not justify its higher upfront costs (Lake Oswego to Portland

Transit Project Steering Committee, 2011).

The DEIS forecasts that the streetcar alternative will increase the number of new annual transit trips by 70% to 75% more than bus rapid transit by the year 2035.

Additionally, compared to bus, the streetcar option provides more flexibility to add capacity by increasing service frequencies or adding double tracking without negatively impacting traffic on the parallel freeway facility (Federal Transit Administration et. al.,

2010).

Regarding support for land use and development goals, according to the DEIS

“the Streetcar Alternative would be more likely to facilitate development and redevelopment in the corridor, because of the major capital investment that would be made in the corridor’s transportation infrastructure and because of improved transit travel times, reliability and visibility linking the corridor’s major activity centers. This conclusion is consistent with the region’s experience with its existing light rail and streetcar corridors” (Federal Transit Administration et. al., 2010). The alternatives analysis projected an increase in the number of new households and jobs within ½ mile of each station of approximately 12 thousand and 25 thousand, respectively, by providing residents and employees with access to more reliable and faster transit service within the corridor (Federal Transit Administration et. al., 2010).

45

The Steering Committee recommendation is also based on the streetcar’s ability

to reduce congestion and automobile dependency more than the bus rapid transit

alternative. As described in the costs and benefits discussion contained in Chapter 3, streetcars, and rail transit in general, attract more choice riders out of their cars and tend

to increase transit ridership more than bus transit. In the case of the Lake Oswego to

Portland connection, the streetcar alternative decreases the number of miles traveled in

automobiles by 66% more than comparable bus service and cuts congestion, measured as

hours of delay, by twice that of bus rapid transit (Federal Transit Administration et. al.,

2010).

Another important decision factor described in the DEIS is public support for the

project. The project Steering Committee is comprised of locally elected and appointed

officials who are vested in identifying public support for their decisions. The Steering

Committee based its recommendation to pursue the streetcar alternative on positive support from the project’s Community Advisory Committee made up of local residents, business leaders, and representatives from public institutions and community groups and input received during the public comment period for the DEIS.

At their final meeting to discuss recommendations for a preferred alternative, 16 of the 20 Community Advisory Committee members expressed their support for the streetcar alternative based on the merits described above (Lake Oswego to Portland

Transit Project Community Advisory Committee, 2011). Broader public support for the project was illustrated through positive comments received during the public comment period. During the 60-day comment period, the project sponsors received over 140

46 comments in support of the streetcar alternative and only 45 in favor of the bus alternative. Comments in support of the streetcar project emphasized the potential travel time savings, environmental benefits, lower operating costs, redevelopment potential, and benefits to existing businesses and communities (METRO, 2011). One such comment regarding the streetcar from a resident of Lake Oswego stated:

Public transportation helps reduce greenhouse gases, reduces wear and

tear on roads, and the streetcar would be a more enjoyable alternative than

taking the bus. The community owes it to future generations to build an

infrastructure that allows those living in these already built-out suburban

hubs to get to downtown (METRO, 2011).

Despite general support for the project, and the streetcar alternative in particular, not all public input received on the project was positive. A number of individuals commented that, given the state of the economy, the timing was not right for a large public investment along the corridor, whether streetcar, bus, or otherwise. A total of 95 comments were received in direct opposition to the streetcar alternative. These comments were mainly concerned with the cost of the streetcar, believing that other priorities such as schools are a better use of local funds in the current fiscal climate.

During public testimony at a Steering Committee meeting held on January 24th one resident stressed “The primary problem for the proposed streetcar from Portland to Lake

Oswego is cost as you will hear over and over again. (METRO, 2011)”

In the Steering Committee’s decision to recommend that planning and study continue on a streetcar preferred alternative, they acknowledged the concerns over the

47 project’s cost, but viewed the long-term benefits from the investment to justify the upfront expense. While the enhanced bus alternative had the lowest upfront costs, the

Committee determined that the streetcar would provide a larger stream of ongoing benefits to the region and future generations. The private investment experienced around

Portland’s existing streetcar and light rail lines was an important contributing factor in the Committees final decision (Lake Oswego to Portland Transit Project Steering

Committee, 2011).

The Steering Committees choice to incorporate streetcar along a corridor that would typically receive bus or light rail service is an innovative and practical use of emerging streetcar technologies. The ability of modern streetcars to reach commute travel speeds of greater than 40 mph and operate in both mixed and exclusive right-of- way, as well as other cost saving design decisions, such as smaller stations, make them a realistic choice for some transit corridors that do not have the demand to require larger capacity light rail. The next Chapter utilizes a cost-benefit approach to take a closer look at whether a rapid streetcar solution may be an appropriate choice for Sacramento’s

Green Line light rail project.

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Chapter 5

COSTS AND BENEFITS OF SACRAMENTO’S GREEN LINE

This chapter presents a preliminary cost-benefit analysis of three alternatives for

Sacramento’s Green Line project; light rail, rapid streetcar, and enhanced bus. The Green

Line is currently a proposed extension of the Regional Transit’s light rail services to provide a connection between downtown Sacramento and the Sacramento International

Airport. In response to a request from the SACOG, the hybrid-streetcar option is

included to determine if a lower cost rail option is appropriate for the project. Because

both light rail and streetcar are capital intensive with large upfront costs, the analysis

includes enhanced bus, which, as indicated in the review of literature, has lower upfront

costs with the potential to maintain high quality transit service.

The cost-benefit analysis of the 12.8-mile transit line will give decision makers

valuable insights useful for deciding whether or not the project meets the city’s goals and

is a wise use of scarce resources. As with any analysis tool, cost-benefit analysis has

limitations that should be considered when reviewing the results. In addition to the cost-

benefit analysis itself, this chapter will include discussion of the implications of the

analysis results as well as other factors related to the project alternatives that decision

makers should understand.

In November, 2010 Regional Transit released their Transitional Analysis Report

(Transitional Report) detailing capital, operating, and maintenance costs, ridership

projections, and recommendations for next steps for the Green Line project. As stated in

the Transitional Report, the purpose of the Green Line project is to “provide an improved

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transit connection in a high-demand corridor between Downtown Sacramento, South and

North Natomas, and the Sacramento International Airport, as well as connect the corridor

to the regional transit system” (Sacramento Regional Transit District, 2010). The report

identifies six goals and objectives that are critical for the project’s ability to fulfill its

purpose; improved mobility in the corridor, support of land use patterns that minimize

automobile travel, efficient and cost effective use of limited financial resources,

minimized community and environmental impacts, consistency with other planning

documents, and broad community support (Sacramento Regional Transit District, 2010).

The Transitional Report considered a number of light rail alternatives to

determine their ability to meet the project goals including the full extension to the airport,

an airport express option with fewer stops, and three partial build options terminating at

various destinations short of the airport. The report utilized an enhanced bus alternative

as the baseline for measuring the performance of the light rail alternatives. The final

analysis in the report recommended that Regional Transit pursue the full extension based

on the project’s cost effectiveness, community support, and increase in transit ridership

compared to the baseline and other alternatives. However, the cost effectiveness measure

utilized in the Transitional Report is based on the federal index used to determine

eligibility for federal New Starts rail transit funds. This federal Cost Effectiveness Index

(CEI) is limited to total annualized project capital and operating costs divided by system- wide travel time savings resulting from the project. This approach to analyzing cost effectiveness excludes broader costs and benefits of the project and does not consider the time-value of money by including an appropriate discount rate. The analysis included in

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this paper attempts to consider a wider range of cost and benefits to reveal additional

information about the project’s economic merits. For consistency, the assumptions

contained in the Transitional Report provide the foundation for the cost-benefit analysis

presented in this chapter.

Project Description

The planned full alignment for the Green Line begins near the existing Amtrak

Sacramento Valley Station on H and 5th Streets in downtown Sacramento, crosses the

American River over a new bridge at Richards Boulevard, follows Truxel Road, East

Commerce Way, and Meister Way through South and North Natomas, and finally

terminates at the Sacramento International Airport. The enhanced bus option follows a

similar alignment, but utilizes the existing Interstate 5 crossing of the American River

before exiting to connect back with Truxel Road (Sacramento Regional Transit District,

2010). The segment of the Green Line south of the American River from the Sacramento

Valley Station to 7th Street and Richards Boulevard is currently under construction and

included in both the bus and rail alternatives. Figure 5.1 on the next page includes a map

of the Green Line Light Rail alignment.

All three alternatives include ten new stations north of the American River.

Seven of ten stations in the rail options include park-and-ride facilities, while six park- and-ride lots serve the bus alternative. South of the American River, the rail alternatives also include the necessary rail tracks, overhead catenary wire, power substations, and one maintenance and storage facility. Three bridges elevate the light rail alternatives over the

American River, Interstate 80, and State Route 99. The light rail would run in a

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combination of mixed-flow right-of-way through downtown and South Natomas and dedicated right-of-way through North Natomas (Sacramento Regional Transit District,

2010).

Regional Transit assumes daily service from 5:00 a.m. to 10:30 p.m. with weekday daytime frequencies of 15 minutes between vehicles, and evening, weekend, and holiday service at 30-minute frequencies. To ensure a fair comparison, these service assumptions are constant across all of the alternatives (Sacramento Regional Transit

District, 2010).

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Figure 5.1: Map of the Green Line Light Rail Project

Source: Sacramento Regional Transit District, 2010

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Upfront Capital Costs

This section discusses the upfront capital costs for the light rail, streetcar, and enhanced bus options for the Green Line. The costs for the light rail alternative are pulled directly from Regional Transit’s Transitional Report. The enhanced bus costs are somewhat increased over the baseline alternative in the Transitional Report to reflect a slightly higher quality service. Costs for the streetcar option are based on potential savings compared to light rail identified in both the literature review and the Portland case study. Table 5.1 below provides an itemized listing of the capital costs for each of the Green Line options.

Table 5.1: Itemized Capital Costs for Green Line Alternatives (in thousands of fiscal year

2010 dollars)

Element Light Rail Streetcar Enhanced Bus Guideway & Track Elements $118,847 $112,748 $0 Stations, Stops, Terminals $28,644 $24,142 $8,400 Support Facilities (heavy maintenance facility) $34,800 $34,800 $7,140 Sitework & Special Conditions $102,312 $102,312 $51,156 Systems (traction, power supply, traffic signals, communications, fare collection systems, train control, etc.) $126,235 $100,988 $ 63,117 Right-of-way $2,450 $2,450 $2,450 Vehicles $126,324 $111,324 $39,083 Professional Services $155,189 $155,189 $77,595 Unallocated Contingency $61,626 $61,626 $21,907 Total $756,427 $705,579 $270,848 Light rail cost estimate source: Sacramento Regional Transit District, 2010

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Light Rail

The light rail alternative has the highest upfront costs of the three options considered in this analysis. According to Regional Transit, the capital cost of the light rail extension to the airport is $756.4 million in fiscal year 2010 dollars. Regional Transit expects construction of the project to take three years (Sacramento Regional Transit

District, 2010). For the sake of this analysis, the construction costs are spread evenly over the three years. In reality, costs for the project would not be experienced with such symmetry, but more accurate assumptions about the spreading of upfront costs are not readily available at the time of this analysis. Since the cost-benefit analysis considers a

20-year period following the start of revenue service, this discrepancy should not make a significant impact on the analysis results.

Streetcar

The streetcar capital cost is derived from potential savings achieved on a number of the project’s capital elements. As mentioned previously, these cost savings are rough estimates based on the type of savings seen in the literature review and the Portland case study. The costs are meant as illustrative examples for the sake of this comparison and should not be considered a final engineer’s estimate of the costs for the project.

The guideway and track element of the light rail alternative includes $57.8 million for the three bridges over the American River, Interstate 5, and State Route 99. The analysis assumes that these costs are unavoidable in either rail scenario since the alignments remain the same. Excluding the cost of bridges, the analysis assumes a

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potential savings of 10% for the lighter gauge tracking and shallower slab depth required

for the less heavy streetcar vehicles.

The analysis assumes station costs for the streetcar alternative can achieve a 20%

savings by downscaling station design to simple “bus stops” as was done in Portland,

Oregon. The savings do not include a reduction to the cost of the $6.1 million elevated

station located at the Gateway stop. This stop is located in an area with very high traffic

volumes and an auto-oriented land use pattern. An elevated station at this location is

necessary because of safety concerns for pedestrians attempting to cross the road to

access the station platforms (Sacramento Regional Transit District, 2010).

The systems budget for the streetcar assumes 20% savings over the light rail

alternative based on the use of a less expensive power distribution system. As described

in the literature review and experienced in Portland Oregon, the use of low-tension

overhead wire systems where speeds are lower can result in savings over the high-tension

catenary systems used for typical light rail projects.

The Transitional Report assumes that light rail service would run from downtown

Sacramento to the Airport at 15-minute frequencies during peak periods in trains of up to four cars each. To meet these service objectives, Regional Transit assumes the need to purchase 29 light rail vehicles at a cost of $3.9 million each (Sacramento Regional

Transit District, 2010). Cost savings for a streetcar alternative are based on the same number of vehicles, but assumes that vehicles cost $3.5 million each, consistent with the cost of vehicles used in Portland, Oregon (Federal Transit Administration et. al., 2010).

The lower cost vehicles result in a total vehicle savings of a little less than 12%.

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This analysis assumes that both light rail and streetcar have identical costs for all

other budget elements. Typically, one of the greatest savings categories for streetcar over

light rail is the lower cost of right-of-way. This is due to the fact that streetcars generally run in mixed-flow traffic in right-of-way already under public ownership, while light rail requires the purchase of exclusive right-of-way separate from existing roadways. In the case of the Green Line project, much of the right-of-way is either already mixed-flow or reserved as a future transit corridor. The cost of additional right-of-way for the light rail option is only $2.4 million or less than 1% of the total project cost (Sacramento Regional

Transit District, 2010). Therefore, the analysis does not assume any meaningful right-of- way savings can be achieved with a streetcar alternative.

To be conservative, this analysis assumes other budget items such as the heavy maintenance facility, site work and special conditions, professional services, and unallocated contingency do not differ between the light rail and streetcar alternatives.

Given the assumptions described above, the streetcar alternative achieves roughly 7% savings over the light rail alternative at $705 million. Similar to the light rail alternative, the costs of the project are spread evenly over three years of construction time.

Compared to the systems reviewed in Chapter 2, both the light rail and streetcar alternatives for the Green Line are at the high end of per mile costs at $59 and $55 million, respectively. A review of the Green Line budget provides some insight as to the reason for this. The inclusion of three major bridge structures and an elevated station explain some of the additional cost. The cost of a $35 million new heavy maintenance facility also adds a significant amount to the total budget.

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The systems budget for the Green Line including traction, power supply, traffic signals, communications, fare collection systems, and train control is over $6 million per mile higher than the Lake Oswego extension reviewed in Chapter 4. This is likely because the need to maintain higher speeds in shared right-of-way requires significantly more investment in traffic and train control systems on the Green Line. A traditional streetcar moves at much slower speeds and does not require large expenditure on elaborate control systems. Higher speeds for both the Green Line and Lake Oswego extensions are necessary to achieve reasonable travel times between destinations.

However, the Lake Oswego project is using exclusive right-of-way currently under public ownership, thus avoiding the need for costly control systems without adding significantly to right-of-way acquisition costs (Lake Oswego to Portland Transit Project Steering

Committee, 2011).

Enhanced Bus

Compared to both the light rail and streetcar alternatives, the bus alternative has the lowest upfront costs at $270.8 million in fiscal year 2010 dollars. The bus alternative does not include all of the track and traction systems inherent to rail projects, but also benefits from the exclusion of bridge structures and the aerial station. The bus vehicles are much less expensive at $1.2 million a piece and only a light maintenance facility costing $7.1 million is required to maintain the vehicles since Regional Transit already has capacity at its existing heavy maintenance facilities (Sacramento Regional Transit

District, 2010). Finally, the bus alternative requires significantly less investment in engineering and construction services compared to light rail and streetcar.

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The enhanced bus considered in this analysis differs from the Transitional Report

with higher costs for sitework and special conditions, systems, right-of-way, and

professional services. The cost increases are rough estimates for the cost of creating a

higher quality bus rapid transit alternative that would match some of the operational

characteristics of light rail or streetcar. With the exception of right-of-way, this analysis assumes the enhanced bus option costs roughly half of the light rail cost for sitework and special conditions, systems, and professional services. This is likely a generous assumption for these costs since the bus alternative does not require the traction and power systems of light rail and would require less construction and engineering expertise.

Right-of-way costs are held constant assuming that the enhanced bus would be able to take advantage of the same exclusive right-of-way used in the rail alternatives. The unallocated contingency budget for the bus alternative is equal to roughly 8% of the total project costs, consistent with the light rail alternative. The construction costs are spread over two years rather than the three years for the rail alternatives, due to the less intensive construction activities required for an enhanced bus.

Operations and Maintenance Costs

Operations and maintenance costs are based on the cost of labor, fuel or electric power, and vehicle, right-of-way, and station maintenance. The Cal-B/C model requires total annual operating costs over a 20-year period. This includes the cost to operate the system in year one of operations and each subsequent year through year twenty.

According to the Transitional Report, the Green Line will be fully operational by 2021.

Unfortunately, Regional Transit only forecasts annual operating costs for the year 2035.

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To determine the annual operating costs for each year required for the cost-benefit model, this analysis assumes a 4% annual growth rate in operational costs, equivalent to

SACOG’s projected annual growth rate for transit trips between 2005 and 2035

(Sacramento Area Council of Governments, 2008). Table 5.2 shows the 2035 annual operating costs for each of the Green Line options with the calculated 2021 and 2041 costs utilized for the cost-benefit analysis.

Table 5.2: Annual Operating Costs for Green Line Alternatives (in thousands of fiscal year 2010 dollars)

Year Light Rail Streetcar Enhanced Bus 2021 $10,267 $9,240-9,754 $4,742 $16,001- 2035 $17,779 16,890 $8,211 $19,468- 2041 $21,631 20,549 $9,990 Source: Sacramento Regional Transit District, 2010

The analysis assumes that the operating costs for the streetcar alternative range between 5% and 10% lower than light rail. As described in the literature review, much of the savings experienced by cities operating streetcar versus light rail comes from the use of volunteer or special labor agreements, lower station and right-of-way maintenance costs, and lower power consumption. It is unlikely that Regional Transit would be able to arrange separate labor agreements between its existing light rail services and a hybrid- streetcar option to the airport, particularly given the similarities between the two technologies. Furthermore, both the light rail and streetcar options operate on the same

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right-of-way, so the analysis does not include any right-of-way maintenance savings.

Assumed savings come from potentially lower station maintenance costs and slightly lower power use associated with the smaller vehicles. Similar to the capital cost assumptions for streetcar, the 5% to 10% lower operations and maintenance costs are rough estimates based on potential savings revealed through the literature review and are illustrative only. A more thorough engineer’s analysis would be needed to confirm the extent of any real savings.

Calculated Benefits

As described in Chapter 3 this analysis utilizes the California Department of

Transportation’s Cal-B/C model to calculate anticipated benefits, measured in millions of

dollars, over a 20-year lifecycle following the first year of operations for the three Green

Line alternatives evaluated in this paper. The Cal-B/C model forecasts four common

benefits associated with transportation projects; anticipated savings related to travel time,

vehicle operating costs, accident costs, and emission costs. The model estimates these

benefits using a build/no-build analysis—calculating the difference between projected

travel conditions with the project (build) and without the project (no-build). For instance,

a project that leads to increased travel speed on a highway creates travel time savings to

motorists and the hours saved by the project are determined to be a benefit. For this

analysis, the baseline alternative from the Transitional Report is used as the no-build

alternative. Since the baseline alternative for the Transitional Report is essentially the

enhanced bus option analyzed in this paper, this analysis assumes some improvements to

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the baseline to show differences from the no-build. Any modifications to Regional

Transit’s enhanced bus assumptions are noted in the discussions below.

To monetize benefits, the model attaches dollar values to relevant units for each benefit category. The model calculates time savings as the product of hours saved resulting from the build alternative and the hourly time value for automobile drivers, commercial trucks, and transit passengers. The model assumes vehicle operating costs as the average cost per mile of owning and operating a vehicle including fuel costs, insurance, lease or loan payments, registration, and maintenance. The model utilizes average costs and rates of highway and transit injury, fatality, and property damage accidents to calculate accident reduction benefits. Savings from emissions are based on the health costs associated with carbon monoxide, nitrous oxide, particulate matter, and volatile organic compounds. Appendix A provides a full list of the cost and value parameters utilized for the benefit calculations in the Cal-BC model.

Model Inputs

The Cal-B/C model utilizes information about potential projects and highway data to calculate the costs and benefits associated with rail and bus projects. For transit projects, the model includes anticipated shifts between highway and transit travel in benefit calculations. The analysis presented in this paper includes data for Interstate 5, which serves travel between downtown Sacramento and the International Airport, and runs generally parallel to the alignments for all three Green Line alternatives. Table 5.3 describes the highway information used for the cost-benefit analysis.

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Table 5.3: Interstate 5 Design and Travel Characteristics

Number of General Traffic Lanes 6 lanes (3 each direction) Highway Free-Flow Speed 70 mph Impacted length of Highway 8.9 miles Current Average Daily Traffic 134,055 Year 20 Average Daily Traffic 180,686 Percent Trucks* 9% Truck Speed 55 mph Average Vehicle Occupancy (Peak)* 1.15 persons Average Vehicle Occupancy (Non-Peak)* 1.30 persons * These values are the default parameters in the Cal-B/C model

The segment of Interstate 5 utilized for this analysis stretches from I Street in downtown Sacramento, approximately nine miles, to Airport Boulevard Interchange at the Sacramento International Airport. The segment has auxiliary lanes between a number of interchanges, but otherwise consists of three general traffic lanes in each direction.

The posted speed limit along most of the segment is 70 miles per hour (mph), which the analysis assumes to be the free flow automobile travel speed, while the legal speed of 55

(mph) is used for trucks. The current average daily traffic volume is derived from the weighted average volumes between interchanges for the entire segment. Table 5.4 describes volumes at each count location that make up the impacted distance of Interstate

5. The analysis uses a one percent growth rate to forecast the Year 20 volumes based on

SACOG’s Metropolitan Transportation Plan 2035 (Sacramento Area Council of

Governments, 2008).

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Table 5.4: Average Annual Daily Traffic on the Impacted Segment of Interstate 5

Traffic Count Location Average Annual Daily Traffic I Street 186,000 Richards Boulevard Interchange 190,000 Garden Highway Interchange 187,000 West El Camino Avenue Interchange 160,000 Interstate 80 Junction 147,000 Del Paso Road 109,000 Highway 99 Junction, North 75,000 Airport Boulevard Interchange 51,000 Weighted Average Volume 134,055 Source: California Department of Transportation., 2009

Cal-B/C requires a number of inputs for each Green Line alternative to complete the benefit calculations. This analysis uses information from SACRT’s Transitional

Analysis Report and default values from the Cal-B/C model to determine the input values for both the bus and rail alternatives. Similar to the project cost assumption presented above, this paper assumes a number of modifications to the light rail alternative to develop input assumptions for the streetcar alternative. Table 5.5 includes the project specific model inputs for the three Green Line alternatives and the no-build alternative.

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Table 5.5: Green Line Alternative Cal-B/C Model Inputs

No Build Light Rail Streetcar Bus Rail / Bus Annual Person-Trips (Year 6,971,952 7,048,392 7,048,392 6,971,952 1) Annual Person-Trips (Year 12,592,008 15,443,688 15,443,688 14,040,089 20) Percent of Trips During 47% 47% 47% 47% Peak Period* Percent New Trips from NA 80% 80% 80% Parallel Highway Annual Vehicle-Miles 187,800 1,497,500 1,497,500 541,300 Average Vehicles per Train NA 3 3 NA Average Transit Travel 55.5 38.5 40.4 50.0 Time (Peak) minutes minutes minutes minutes Average Transit Travel 50.2 35.3 37.0 45.2 Time (Non-Peak) minutes minutes minutes minutes * These values are the default parameters in the Cal-B/C model

Source: Sacramento Regional Transit District, 2010; System Metrics Group Inc., 2009

The model inputs for both the light rail and streetcar alternative are identical with the exception of average transit travel time. For the sake of this analysis, average travel times are calculated as the average in-vehicle travel time between downtown Sacramento,

Pebblestone station, Gateway Park, North Natomas Town Center, and Sacramento

International Airport as stated in the Transitional Report (Sacramento Regional Transit

District, 2010). Based on the operational characteristics for streetcar and light rail presented in Chapter 2, the analysis presented here assumes a 5% slower travel time for streetcar compared to light rail. The bus alternative assumes a 10% improvement in travel times over the no-build alternative. This improvement is a conservative estimate based on achieving faster run times by using the same exclusive right-of-way as the rail

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alternatives and higher investment at priority signal jumps and other intelligent

transportation system (ITS) improvements paid for by the relatively higher initial capital

investments.

Annual person-trips are based on Regional Transit’s projections of ridership for

2035 for both the light rail and bus alternatives. To show some improvement over the no-build scenario, the analysis presented in this paper assumes an 11% increase in ridership over the no-build alternative for the bus alternative. This equates to roughly half of the increase in ridership assumed for both of the rail alternatives. To adjust the ridership projections for each alternative to 2021 and 2041, as needed for the Cal-BC analysis, this paper assumes that ridership will grow 4% annually for the rail alternatives and 3% for bus, based on historical growth rates reported by SACOG (Sacramento Area

Council of Governments, 2008). The model assumes that 80% of the ridership on all three alternatives originates from trips shifting to transit off of Interstate 5 (System

Metrics Group Inc., 2009).

Annual vehicle-miles represent the number of miles traveled by the transit alternative in total on an annual basis. The no-build and enhanced bus alternatives include the total miles driven by buses along the Green Line Corridor, while the light rail and streetcar alternatives include total miles traveled along the railway. The annual vehicle-miles data used for the model inputs come directly from the Transitional Report.

Light rail and streetcar travel the same number of miles since their alignments and frequencies are identical.

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Discounting Costs and Benefits

The Cal-B/C model discounts the costs and benefits of a given project to account

for the declining time value of money. Discounting for the time value of money is

distinct from inflation or real changes in value in that it does not represent the decreasing

purchasing power of the dollar. Rather, discounting future costs and benefits

acknowledges that individuals value future benefits less than those same benefits today

and consider future costs less important than costs incurred today. This analysis uses a

4% discount rate for both the costs and benefits of each Green Line alternative.

Cost-Benefit Analysis Results

This section presents the results of the cost-benefit analysis and a discussion of the implications for future project development. Table 5.6 presents the cost-benefit analysis results for each of the alternatives.

Table 5.6: Life-Cycle Costs, Benefits, and Net Present Value of Green Line Alternatives

(in millions)

Light Rail Streetcar Enhanced Bus Life-Cycle Costs $910.3 $843.1-$852.2 $353.3 Travel Time Savings $399.33 $356.75 $142.20 Vehicle Operating Cost $29.05 $29.05 $16.05 Savings Accident Cost Savings ($13.76) ($13.76) $0.95 Emission Cost Savings $0.70 $0.70 ($0.86) Total Life-Cycle Benefits $415.32 $372.75 $158.35 Net Present Value ($494.9) ($470.3)-($479.5) ($195.0) Rate of Return on Investment (4.4%) (4.6%)-(4.9%) (5.6%)

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The life-cycle costs for each project are made up of the upfront capital investment

and the ongoing operations and maintenance costs. The light rail alternative is the most

expensive option; approximately 7% to 8% more expensive than streetcar and 158%

more expensive than enhanced bus. However, the light rail alternative also has the

highest life-cycle benefits; 11% higher than streetcar and 162% higher than enhanced

bus.

Travel time savings are the largest benefit for all of the alternatives, although the

faster speeds achieved by light rail create the greatest savings of the three alternatives.

The bus alternative achieves less than half the savings of the light rail or streetcar

alternatives.

Vehicle operating cost savings are the same for both the light rail and streetcar

alternatives due to the identical ridership projections. The enhanced bus option achieves

only 55% of the savings achieved by the rail options due to the lower ridership

projections.

Accident costs of both rail alternatives are higher than in the no-build scenario

resulting in increased accident costs of nearly $14 million over 20 years. This is due to

the almost 700% increase in annual vehicle-miles compared to the no-build scenario and

a high accident rate for rail transit. The Cal-B/C model applies an accident rate of roughly nine rail accidents per million vehicle-miles compared to less than four accidents for bus service (System Metrics Group Inc., 2009). This difference results in the only benefit category in which the bus alternative performs better than the rail alternatives.

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Compared to the no-build scenario, the bus alternative creates a slight net savings in

accident costs of $950 thousand over 20 years.

The low-emission electric power of the rail vehicles helps the light rail and

streetcar alternatives to achieve slight health cost savings of $700 thousand over 20 years

compared to the no-build scenario. However, the bus alternative actually increases health

related costs due to higher emissions compared to the no-build scenario. For buses to

achieve emissions benefits over cars, enough would-be drivers must use the bus to offset

the bus’ poorer gas mileage and higher emissions. In this case, the ridership projections

for the enhanced bus alternative are too low to offset the number of cars the new bus

service is shifting off of Interstate 5.

Considering all of the costs and benefits measured by the Cal-B/C model, all three

of the Green Line alternatives have negative net present values and returns on investment

for the 20-year analysis period. The negative net present values indicate that none of the alternatives generate enough benefits over the 20-year life-cycle analysis to recover their initial investments. Despite achieving the greatest benefits, the light rail alternative has the lowest net present value at negative $495 million due to its high upfront costs and relatively expensive ongoing maintenance and operations costs. The streetcar alternative has a negative net present value of between negative $470 million and $480 million. The enhanced bus alternative achieves a relatively stronger net present value of negative $195 million because of its lower upfront and ongoing costs.

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Implications

The results of the cost-benefit analysis indicate that none of the considered

alternatives generate benefits in excess of their total costs. Some of this may be

explained by the relatively low traffic volumes on Interstate 5, particularly along the

northern segments. There are two large drops in average daily traffic following both the

Interstate 80 and Highway 99 Junctions as shown in Table 5.4. This indicates that most of the cars traveling on Interstate 5 north of Sacramento are transferring from or to east-

or westbound Interstate 80, Highway 99, or exiting at Del Paso Road. With fewer

vehicles traveling along Interstate 5 along the northern end of the Green Line corridor,

there is less opportunity for trips to shift from the highway to the transit line. This is

supported by boarding information detailed in the Transitional Report; more than 80% of

the daily boardings on the Green Line occur south of the Gateway Park station near

Interstate 80 in the first 4.5 miles of the line. The remaining 8.2 miles of the transit line

only account for 20% of the boardings in either direction (Sacramento Regional Transit

District, 2010). The relatively low volumes on Interstate 5, coupled with slow, 1%,

anticipated growth in traffic over the 20-year life-cycle analysis, reduce the total benefits

achievable by the Green Line alternatives. Free flow speeds along the highway remain

reasonably fast, diminishing travel time savings, and fewer vehicles leave the highway in

favor of transit, diminishing both vehicle operating cost and emission cost savings.

These results alone do not provide enough information to dismiss the alternatives

altogether. The literature reviewed in Chapter 2 and the Portland case studies both

highlight the land use benefits resulting from rail, and specifically, streetcar projects. The

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Cal-B/C model does not account for changes in land values resulting from any of the three Green Line alternatives. An assessment of potential land use impacts along the

Green Line corridor may reveal additional benefits that should be considered in making a final decision about the projects. A full assessment of potential land use benefits is beyond the scope of this analysis; however as planning work on the project moves forward, it will be important to consider how the project impacts the land uses around it and whether these should be considered in benefit calculations. A preliminary estimate of $350 million in additional benefits for the rail alternatives and $160 million for the enhanced bus alternative would allow the projects to recapture their initial investment costs and create a positive return on investment within a 20-year life-cycle analysis.

Based on the Portland, Oregon experience, it seems reasonable to assume that some level of private investment and increased land values would follow the construction of a high quality transit service through South and North Natomas. Any analysis of benefits accrued through changes to land use should be careful to acknowledge that these benefits largely go to private land holders and owners along the line. Perhaps a reasonable assessment of benefits to society would be through the additional tax increment generated through higher land values and increased economic activity.

Additionally, it should be noted that land use benefits along the line would likely not reach the same magnitude as those experienced in Portland, Oregon. In Portland, the streetcar alignment focused on highly underutilized industrial land, which the city targeted for redevelopment well within the urban core. This theme is common among the streetcar projects reviewed in Chapter 2.

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The Green Line alignment runs through some redevelopment areas through

Downtown Sacramento, including the railyards, and South Natomas, but much of the

alignment is in established suburban communities in North Natomas. Nearly 20% of the

daily boardings projected for the light rail alternative originate from park-and-ride passengers. This number is closer to 35% north of the American River once the route leaves Downtown Sacramento (Sacramento Regional Transit District, 2010).

Furthermore, a federal moratorium on building in North Natomas due to aging levies and flood concerns will further hinder the development potential in the near term for the alignment. Despite these concerns, it may be worth additional effort to determine if land use benefits not captured in the analysis presented here may improve the net present values and return on investments for the Green Line alternatives.

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Chapter 6

SUMMARY AND RECOMMENDATIONS

This chapter provides a summary of the first five chapters and presents a number of recommendations for future efforts regarding the Green Line transit corridor and other potential streetcar projects in Sacramento.

Report Summary

Streetcars have an important place in the history of America’s cities. Some of the first paved streets, transit oriented developments, and suburban neighborhoods were developed around or because of the streetcar. However, buses dominate modern transit systems in the United States because of their flexibility and low upfront capital costs.

Despite their widespread acceptance and availability, buses have a difficult time attracting choice riders because they do not present an image of a high quality or desirable transportation alternative (Reconnecting America, 2008; Litman, 2011;

Schumann, 2005).

Light rail transit, a successor of the streetcar, began making an appearance in the transportation systems of large and some mid-size cities in the U.S. in the mid-1980s.

Rail transit in general is an attractive transportation option and can increase the appeal of public transportation among people who otherwise have the option of driving their own automobiles. However, the expensive infrastructure required for light rail systems limits the ability of many cities to add rail to their public transit portfolios. Unlike heavy rail or modern light rail transit, streetcars are typically small, slow moving, and scaled toward the pedestrian environment. Due to the smaller vehicles, lighter track, simpler stations,

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and less elaborate traction systems, well planned and designed streetcar systems can often

be constructed and operated for less than larger light rail projects and thus make rail

transit available to many cities that wouldn’t be able to otherwise afford it. A number of

American cities have built or are planning to add streetcar lines to revitalize and improve

accessibility in their urban cores (Reconnecting America, 2008).

One of the most alluring aspects of the streetcar for urban planners is their ability

to attract private investment. Compared to higher speed, commuter-based light rail

transit, streetcars work best in high-density areas where there is limited availability for exclusive right-of-way and vehicles must share road space with cars, bicyclists, and

pedestrians. Streetcars appeal to developers because of their permanence and

attractiveness, which make them an amenity to the communities they run through.

Evidence of the relationship streetcars have with the built environment is exemplified in

Portland, Oregon where a streetcar project opened in 2001 has contributed to attracting

more than three billion dollars of private investment into once abandoned industrial zones

including the now famous Pearl District. Since the establishment of the Portland

streetcar, the area within one block of the streetcar’s alignment has captured more than

half of all of the development in Portland’s central business district. Prior to the

emergence of the streetcar, the same area accounted for less than 20% of development in

the central business district (Cooper and Furmaniak, 2003).

An emerging concept among planners attempts to take advantage of the lower

cost aspects of streetcars by applying them to traditional commuter-based corridors. This

hybrid or rapid streetcar concept has gained traction in Portland as the city looks to

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expand its streetcar service into the neighboring city of Lake Oswego. The premise

behind rapid-streetcars is that certain corridors where demand is not high enough to

warrant full light rail service, streetcars can provide a higher quality transit service than

bus, but at a much lower cost than light rail. The streetcars may run in a combination of

mixed-flow and exclusive right-of-way, operate as multiple-car trains, and reach slightly higher speeds than their traditional urban core counterparts. Where appropriate, the streetcars could operate alongside vehicles and pedestrians, stopping every block or two, but then accelerate to speeds of 30 to 45 miles per hour on exclusive right-of-way stopping at stations a mile or more apart (Henry, 2007; Reconnecting America, 2008).

As part of an effort to create a high-quality transit service connecting downtown

Sacramento to the Sacramento International Airport, this paper explores the possibility of utilizing a rapid streetcar instead of light rail. The Green Line project is currently a planned extension of Regional Transit’s light rail system, which would connect the existing system in downtown Sacramento, across the American River, through South and

North Natomas, to the International Airport. At over $58 million dollars per mile, the 12- mile project will require a significant outlay of upfront capital costs, more than $750 million (Sacramento Regional Transit District, 2010). Using information from professional literature and case study analysis, this report attempts to weigh the costs and benefits of a potential scaling back of the light rail extension to a rapid streetcar alternative. In addition, the analysis examined an enhanced bus option as a lower upfront cost option to the rail alternatives.

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Based on lessons learned from the literature and case studies, the sketch-level cost analysis contained in Chapter 5 found that a capital cost savings of around 7% of the light rail cost might be possible through a hybrid streetcar design. The enhanced bus option was roughly 36% less than light rail. Based on a cost-benefit analysis using the Cal-B/C model developed by the California Department of Transportation, none of the alternatives returned a positive net present value over a 20-year life-cycle analysis. Accounting for

cost savings derived from reduced travel times, vehicle operating costs, accident costs,

and health costs due to emissions, both light rail and streetcar returned a larger benefit

stream than enhanced bus, but their higher upfront capital costs caused their net present

values to fall more negative than the bus option.

Despite the negative present values and returns on investment, the analysis

concluded that none of the alternatives should be dismissed based on the Cal-B/C outputs alone. The Cal-B/C model does not capture land use benefits, which are an important factor in weighing the merits of transit projects, particularly rail projects. One of the stated goals for the Regional Transit Green Line extension is to support land use patterns that minimize automobile travel (Sacramento Regional Transit District, 2010). While the

Cal-B/C model does attempt to capture reductions in automobile travel as a direct result of the project alternatives, it cannot capture indirect effects brought on by changes in land use patterns. Furthermore, the analysis concludes that potential changes in land values or higher tax increments may be worth considering through future efforts.

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Recommendations and Future Efforts

This report examined the history and purpose of streetcars in the United States, provided a review of academic and professional literature related to the implementation of streetcar projects, and offered a cost-benefit and case study analysis of a potential streetcar alternative for the planned Green Line Light Rail Extension. This section provides recommendations based on the lessons learned in the drafting of this report and areas for future study that SACOG, Regional Transit, and others may want to consider for future efforts and project analyses.

Regarding Sacramento’s Green Line project, in addition to quantifying additional land use related benefits as discussed previously, SACOG and Regional Transit should work to find additional cost savings that may improve the economic merits of the project.

One option is to examine a phased approach incorporating one of the alternatives included in the Transitional Report such as an extension from downtown to the Gateway

Park station to reduce the total upfront costs of the project. As discussed in the analysis in Chapter 5, most of the ridership on the line is generated in the segment between

Gateway Park and downtown Sacramento making this a logical first step for rail north of downtown.

SACRT may also want to investigate an approach similar to the RapidRide transit project in Seattle, Washington by using an enhanced bus service as a precursor to light rail (Henry and Dobbs, 2009). The purpose of this approach would be to reduce initial capital costs and build a base of ridership along the corridor. SACRT would revisit an

77 upgrade to rail transit at some point in the future when ridership demand begins to strain the capacity of bus service.

In addition to the specific recommendations for the Green Line project above, three issues come to light that are worth additional consideration for future efforts at

SACOG, Regional Transit, or elsewhere.

First, little research exists on measuring the effects of rail transit on the built environment outside of case study work. The Portland example is frequently cited by other cities seeking to describe the benefits of streetcars because of the wealth of data collected about the project. While Portland’s streetcar can serve as an effective model for other cities, the effects of streetcars should not be assumed to be identical everywhere. A more robust effort to explain how different types of public transit, including light rail, streetcar, and bus, impact the built environment would greatly enhance future analyses for cities considering expansions to their public transit systems.

Second, while the Cal-B/C model provides a simple and effective tool for measuring the potential costs and benefits of transportation projects, there are a number of pieces of project specific information that would enhance the tool’s effectiveness.

Currently, both SACOG and Regional Transit provide base year and future year performance metrics such as operating costs, ridership, and vehicle miles traveled. The base year typically corresponds to a historical snapshot that can be compared to a future year, such as 2035 in SACOG’s Metropolitan Transportation Plan and Regional Transit’s

Transitional Report. These data points do not include information about how a specific project will perform in the year that it opens for operations and therefore do not provide

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any insight into a project’s life-cycle performance. The Cal-B/C model requires a “year one” projection for projects in order to forecast changes in costs and benefit streams over the life of the project. For the analysis presented in Chapter 5, simple straight-line projections based on historical regional growth rates formed the base for extrapolating

“year 1’ and “year 20” performance metrics. A set of project specific assumptions would help facilitate a more accurate analysis of a project’s cost and benefit stream. It may be valuable for both SACOG and Regional Transit to consider building in “year 1” forecasts for future project analyses.

Finally, public transit is only one piece of an efficient transportation system.

Prevailing land use patterns play a significant role in how people choose to travel on a daily basis. In order for a public transit system, whether rail or bus, to provide a viable, attractive, and useful piece of an overall transportation system, it must be coordinated with decisions about the type and location of development occurring in a city, county, or region.

Any public transit project, no matter how elaborate, will have trouble succeeding if it is not designed to operate in the context and in coordination with the land uses around it. Zoning decisions, public subsidies, and investments in infrastructure should be made with consideration of the type of transportation system they will encourage.

Inversely, investments in various transit modes should be made with consideration to the types of and opportunities for development that they can help to facilitate.

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APPENDIX A

Cal-BC Parameters

General Economic Parameters

Year of Current Dollars for Model 2010 Economic Update Factor (Using GDP Deflator) 1 Real Discount Rate 0.04 Source: California Department of Transportation, 2004

Travel Time Parameters

Value Units Statewide Average Hourly Wage 23.20 $/hr Transportation and Warehousing Average Hourly Wage 21.13 $/hr Benefits and Costs 7.56 $/hr Value of Time Automobile 11.60 $/hr/per Truck 28.70 $/hr/veh Auto & Truck Composite 16.30 $/hr/veh Transit 11.60 $/hr/per Out-of-Vehicle Travel 2.00 times Incident-Related Travel 3.00 times Source: California Department of Transportation, 2009

Vehicle Operating Cost Parameters

Value Units Average Fuel Price Automobile (regular unleaded) 3.7 $/gal Truck (diesel) 3.9 $/gal Sales and Fuel Taxes State Sales Tax 0.073 % Average Local Sales Tax 0.005 % Federal Fuel Excise Tax (gasoline) 0.18 $/gal Federal Fuel Excise Tax (diesel) 0.24 $/gal State Fuel Excise Tax 0.18 $/gal Fuel Cost Per Gallon (Exclude Taxes) Automobile 3.10 $/gal Truck 3.25 $/gal

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Value Units Non-Fuel Cost Per Mile Automobile 0.24 $/mi Truck 0.36 $/mi Idling Speed for Op. Costs and Emissions 5 mph Source: California Department of Transportation, 2009

Accident Cost Parameters

Value Units Cost of a Fatality 4,100,000 $/event Cost of an Injury Level A (Severe) 206,500 $/event Level B (Moderate) 51,800 $/event Level C (Minor) 25,100 $/event Cost of Property Damage 2,300 $/event Cost of Highway Accident Fatal Accident 4,600,000 $/accident Injury Accident 64,600 $/accident PDO Accident 9,400 $/accident Average Cost 50,200 $/accident Statewide Highway Accident Rates Fatal Accident 0.009 per mil veh-mi Injury Accident 0.31 per mil veh-mi PDO Accident 0.65 per mil veh-mi Non-Freeway 1.25 per mil veh-mi Source: California Department of Transportation, 2009

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