f r REGIONAL TRANSPORTATION AUTHORITY r Engineering support Services for strategic Plan and Capital Investment Plan Implementation
Task 6A Report
Interstate Transfer Program
May 13, 1988
Prepared by
PARSONS BRINCKERHOFF QUADE & DOUGLAS, INC.
Chicago, Illinois l l l L r r r Table of Contents r List of Exhibits ii r 1. Background of Assignment 1 2 . Overview of Interstate Transfer Program 1
3. Conduct of Task 3
4. Content of and Issues Affecting Chicago's IST-Transit Program 3
5 . Conclusions 11
6. Exhibits 13
l l
l l l i r r
I LIST OF EXHIBITS r
Letter Source Title r A UMTA Letter 4/20/88, Ettinger to Williams re IST Program
B IDOT Original IST Program Allocations
c IDOT Revised IST Program Allocations
D PBQD List of Documents Reviewed
E PBQD List of Meetings held and persons contacted
F IDOT Transfer 2 Project List, Federal Obligations through March 31, 1988
G DPW Description of Subway Renovation Program (As Revised May 1985)
H DPW Quarterly Progress Report No. 16, Jackson Park Transit Improvement . Project, January 1988, Page 12
I IDOT Letter 2/29/88, Wheeler to Williams re Howard/Dan Ryan Rescoping Proposal
J RTA Memorandum 1/27/88, Gaudette to Johnson and Hankett re SWT fleet requirement
K UMTA Attachment 4 to UMTA - City of Chicago Grant Agreement, Amendment 03, Projec t IL-23-9020, July 28, 1986. (Cost Escalation) l l l L L ii 1. Background of Assignment r The April 20, 1988 letter from UMTA (Joel P. Ettinger - Area 5 Director) to Chicago DPW (David s. Williams, Acting Commissioner) concerning the Interstate Transfer Program raised a number of r issues concerning the funding and composition of the present program. This letter, copied to RTA, among others, is attached as Exhibit A. RTA asked Parsons Brinckerhoff for a brief analysis of the potential funding shortfalls which might result within the Interstate Transfer Program due to cost growth. Parsons Brinckerhoff conducted such a study during the period May 3-13, 1987 and this report documents our investigation of the program.
2. overview of Interstate Transfer (IST or IX) Program The IST Program originated with federal legislation passed in 1979, allowing localities to apply for "de-designation" of unbuilt urban portions of the Interstate Highway System. The federal monies allocated for the interstate highway portions so de-designated then became available for grants to the localities for approved substitute projects. The federal monies are fur nished to the region provided that a 15% local share is guaran teed by the locality, i.e. !ST projects are funded 85% federal, 15% local. The local share has been furnished by IDOT for the entire IST program, with no local match being furnished by City of Chicago. ·
The principal source of !ST monies for the Northern Illinois region was the de-designation of Federal Aid Interstate Highway 494, the "Crosstown Expressway". This proposed highway had a major transportation impact on the cities of Chicago and Cicero, with other municipalities outside Chicago also affected. As a result of a politically-arrived-at compromise, the City of Chicago and the suburban areas agreed that 50% of IST funds for the region would be allocated to the City, and 50% to the suburban areas. This results in a delicate balancing act whenever funding levels or allocations change. Of the monies coming to Chicago-Suburban Areas, there are three uses of funds: Accelerated FAU highways - 7%, Highways - 84%, and Transit - 9%. The suburban transit portion, amounting to l some $112 million of federal contribution, is administered by !DOT; this includes both FHWA-appropriated and UMTA-appropriated funds (approximate split= 79% UMTA, 21% FHWA). Suburban transit L projects include parking lots, grade crossing improvements, and transit-related bridges. All of these projects are Metra related, and many of the parking lots have Pace bus drop-offs , l turn-arounds, etc., which are designed in coordination with Pace. L 1 L IST.001 Of the IST monies corning to the City of Chicago, the primary use is for transit (68%), and the balance for highways (32%). A total of approximately $792 million is the total budgeted amount for city of Chicago transit projects (federal share). When com bined with a local match of $140 million, total Chicago transit !ST funding is some $931 million. The City transit !ST funding is all UMTA-appropriated; no FHWA funds are involved.
An early feature of the !ST program was an inflation indexing scheme, which operated between 1979 and 1983. Inflation adjust ment was eliminated in 1983, but this caused discomfort at the r local level. To appease the local pain, Congress included a "one-time" deferred inflation adjustment for the !ST program in the Surface Transportation Assistance Act of 1987 (1987 STAA), for transit projects only. For the City of Chicago IST transit projects, the additional amount authorized was approximately $29.8 million.
The Table below summarizes the funding for the IST Transit program for the City of Chicago.
city of Chicago: IST Transit Program ($ Millions)
Original Program After Inflation After 1987 (1979) Adjustments (1983) STAA
Federal $ 649.1 770.4 791.7 Local Match 114.5 136.0 139.7 l Total $ 763.6 906.4 931. 4
The Table above is summarized from information supplied by !DOT, Division of Public Transportation. Source data are Exhibit B, "Original Interstate Transfer Program Allocations," and Exhibit c, "Revised Interstate Transfer Program Allocations." Two observations are offered concerning the increase in the source of federal funds. First, the overall increase of $167. 8 l million in total funds amounts to a 22% increase over eight years, or approximately a 2 1/2% compound rate of growth. To the degree that this rate has lagged the true inflation rate, a con l traction in the scope of !ST projects funded thereby is an implied fact of life. Secondly, while the 1987 STAA inflation adjustment was a "one-time" event, there may be reasons to seek another adjustment, particularly if !ST appropriations lag in the future and cause construction periods to be lengthened. This does not appear to have been the case to date. L 2 L IST.001 r 3. Conduct of Task f The task began with r eview of a number of IST Program d ocuments . The documents are tabulated in Exhibit D and consist primarily of grant applications, grant amendment applications, and quarterly r progress reports. In addition the SWTP full funding contract between UMTA and City of Chicago was reviewed, as was the Ke llogg Corporation report on the SWTP for IDOT. f Meetings were also held with UMTA, CTA, IDOT, and DPW. A list of meetings and persons contacted is shown in Exhibit E. The excellent cooperation of all agencies and personnel is gratefully acknowledged.
Analysis and additional telephone follow-up concluded with the preparation of this report.
4. Content of and Issues Affecting Chicago's IST - Transit Program
Overall
The Table on the following page summarizes the $931 million IST Transit Program for the city of Chicago. This report is prepared monthly by DPW. The May 5, 1988 version shown reflects the recently provided "deferred inflation" adjustment provided in the 1987 STAA of approximately $30 million. This has provided addi tional funding for SWTP railcars, Jackson Park El, Planning, and IDOT (Suburban) projects. In addition the Table reflects (in the column headed "FY '87 SUP.") additional funding recently applied to the SWTP. This funding resulted from discretionary realloca l tion of the monies not used by Baltimore last year; it is not new money, it represents only an advance of project funds. This advance has allowed the SWTP schedule to be advanced by one year.
l The first subtotal column on the Table shows total obligations o f $712.4 million through FY'87, for which the Federal share is 85% or $605.5 million. A detailed listing of the individual grants l by fiscal year which comprise this program is shown in Exhibit F . This document is produced by IDOT in Springfield on a quarterly basis (the Janik Report) -- RTA could undoubtedly receive it as l well as the others copied. Suburban Transit
Before exploring the City Transit program, a few comments concerning the IDOT/ Suburban Transit program are in order. As mentioned, this $104 million project addresses parking l ots, L grade c rossings, and transit-related bridges. Between 1979 and 198 3 the IST Concept Plan was developed. The concept plan l amounts to a sort of super wish list of projects which a re 3 L IST. 001 ----. .-- ...------. ----. ----, r- r- ....
llAY 5, 1988 INTERSTATE TRANSFER 'TRANSIT PROGRAll C!TY OF Cl11 CAGO t~i ll ions of dollars)
(Includes $29.776 1illion fro1 1987 STAAi ======·
OBLIGATED FUNDS FY'B5 FY'87 sue SUB PROJECT TITLE FY'79-84 FY' 85 c.o. FY'86 FY'B7 SUP. TOTAL FY'88 FY '89 FY '90 FY'91 TOTAL TOTAL ------SOUTHWEST TRANS IT Design and Construction 8.7 11. 7 73.3 13b.6 75.3 45.3 350 .9 28.2 30.9 0 0 59. I 41 0.0 Rail Cars 0 0 0 0 0 0 0 23.0 44.4 26.6 0 94.0 94.0 Reserv e 0 0 0 0 0 0 0 0 0 17 .0 0 17.0 17.0
HOWARD DAN-RYAN 9S .7 39.7 0 0.s 0 0 143.9 2.3 0 0 0 2.3 146.2
LOOP REHAB 44 .2 30.2 0 0 7.3 0 81. 7 0 12.4 14. 5 12.6 39 . 5 121. 2
SUBWAY RENOVATION 17. 6 3.3 5.7 0 0 0 26 .6 0 0 0 0 0 26.6
JACKSON PARK EL 3.0 12. I 0 0 6.3 0 2.1. 4 0 6.4 0 0 6.4 27.B
PLANIHN6 I. s 0 0 0 0 0 1.S 0. 3 0 0 0 0.3 I. 8
FULLY FUNDED PROJECTS 84.3 2.1 0 0 0 0 86.4 0 0 0 0 0 86 .4 ------~ ------TOTAL BUDGETS 255.0 99.1 79.0 145.l 88.9 45.3 712.4 53.8 94.1 58.1 12.b 218 .b 93 1. 0 FOR CITY PROJECTS
FEDEf ------~------TOT AL lH. E. ILLINOISI 239 .9 98 .5 67.2 131. 7 84. 0 38.5 659.7 Sb.9 90.0 57 .4 16.4 220 . 7 88 0.4 eligible for IST funding. Because the generation of this report r was in part a political exercise, and because little was known about the engineering need or costs of bridge rehabilitation, every project in the Concept Plan was never :i.ntended to be r completed. The overprogramming and diversity in the Concept Plan provides some flexibility in terms of what was anticipated to be accomplished in the IST Suburban Program in particular. r According to Steve Schindel of IDOT, all of the parking improve ments in the concept plan will be completed where there is both demand for parking and a community interest in having it. There I is a funding cushion from other sources which can see that this work is completed. The grade crossing work is going routinely every year. There is substantially less funding than required to do all the bridge work anticipated in the Concept Plan, but Schindel maintains that isn't ''necessary". In discussion it was agreed that no one really has a clear picture of what is neces sary in the way of a bridge program. It was also mentioned that one "can't give the money away to Metra" because, presumably, of their aversion to undertaking multiple projects simultaneously where operations may be affected. Completion of all defined projects in the suburban !ST program is the Number 2 priority of !DOT/Public Transportation (Number 1 is the SWTP completion) . city Transit The following Table reflects the status of the City !ST Transit Program: City IST Transit Program, 5/88 Total Post FY-88 Project Funds, SM Funds, SM Status l Southwest Transit 521 118.9 Full Funding Contract Howard/Dan Ryan 146 0 Res coping l Proposed I Loop El Rehab 121 39.5 Rescoping Due Subway Renovation 27 0 Essentially Complete l Jackson Park El 28 6.4 Rescoping Required l Planning 2 0 Low Level Fully-Funded Projs 86 0 Largely l Complete 931 164 . 8 4 L IST.001 I r These IST projects fall into three natural categories. The SWT Project, at 56% of the total funding and 72% of the remaining r funding, is a very major concern, all the more because it is the subject of a ful !-funding contract with UMTA. Three remaining rail transit projects, Howard/ Dan Ryan, Loop El, and Jackson Park El, are of significant concern as all require adjustments in scope. The other remaining projects are not of major significance at this point. The Subway renovation project is essentially completed. It has already been rescoped by UMTA and DPW, with a total of 14 scope items dropped. Exhibit G shows the work com pleted for both State Street and Dearborn Street Subways, and the work elements deleted. The remaining planning work has little fiscal impact, and the so-called "Fully Funded" projects are largely completed at this point. The four projects with significant impacts on the IST are discussed below in turn: Loop El, Jackson Park El, Howard/ Dan Ryan, and SWTP. Loop El Rehab This program originally envisioned the rehabilitation or new con struction of 8 loop elevated stations, including a complex and ambitious project at Clark/Lake with a new State of Illinois Center platform, as well as structural rehabilitation work on the Loop El. The present program consists of $37.4 million of station work (31%) and $83.8 million of structural work (69% ). The structural work is performed by CTA force account and is a 100% pass-through item for DPW, who manages the balance of the I project. Of the structural work, approximately 42% is for the loop structure per se, with the balance expended on near-in portions of the Ravenswood, (35%), Lake (14%), and South Side ML l (9%). The work consists of partial member replacement. While no independent evaluation has been performed, this work is appar ently going reasonably well. CTA is able to staff this work by I using Union Hall day hires to supplement its regular forces. The station work is not going as well. While DPW manages the project as grant recipient, the station work is divided between l CTA and DPW. Numerous architects are involved with the station program, reducing the ability to achieve standardized designs , cost savings, and greater program control. Some of the proposed L s tations are alleged to be heavy on "image" or "statement" archi tecture, and the high costs plans resulting have had to be scaled back in redesign or are in danger of being dropped entirely . This has slowed the project and required reductions in the work l which can be accomplished. One completed s tation project, i s l 5 L I ST. 001 r projected at $3. 5 million versus a n original estimate of $2 . 2 r million. If this 59% cost growth were applied to the who l e station program, a shortfall of up to $22 million c ould result . { This is certainly not likely, as the program, for one thing, has already been reduced in scope. While design engineering for 8 stations has proceeded, only 4 stations are funded for construc tion at this time. Our understanding of station program status r is as follows: 1/ 88 Budget, r station Status $ Millions Quincy/Wells Essentially Complete 3.424 Adams/Wabash Under Construction 2.824 Clark/ Lake Funded for Construction 15.140 Washington/ Wells Funded for Construction 5.445 Washington/ Wabash Design on Hold .355 State/Lake Design on Hold .328 State/Van Buren Design on Hold .383 LaSalle/Van Buren Design on Hold .353 28.25 The present amendment #6 to this grant agreement called for a rescoping of this project to be completed by 10/87. It has not yet been accomplished, which was a contributing factor in UMTA 's decision to request an overall financial forecast for the IST Program. In meetings with DPW, it was suggested that Washington/Wabash, state/Van Buren, and LaSalle/Van Buren would be deleted from the construction program. It is interesting to note that one of the key problems with the station portion of the Loop El program is in fact structural. DPW reports a number of cases of steel problems being found after construction contract award. In one extreme case (Adams/ Wabash) a station mezzanine had been removed to allow access to structure above. It was found that structural erosion was so severe that the mezzanine was scrapped as unusable, rather than reinstalled. This is of dual interest: on the one hand, it underscore s the uncertainty which exists concerning structural conditions throughout the system. On the other hand, it represents just the kind of valid surprise which drives up the cost of performing this kind of work. To the degree that these sorts of problems can be documented, UMTA and IDOT may be receptive to scope reductions in this program. DPW has also mentioned the possibility of using State Street Mall funds (a local taxing district) to supplement funding for station improvements under the Loop El program. 6 IST.001 Jackson Park El Rehab Approved grants for this project include the following ma jor elements: Construct new Dorchester terminal complex Cottage Grove Station reconstruction King Drive Station reconstruction 61st St. and University Station rehabilitations Demolish old and construct 1000 ft. new structure, Kimbark-Dorchester Exhibit H shows the project status from the January 1988 progress report issued by DPW. This sheet does not reflect the $6. 3 million awarded for Dorchester terminal construction in UMTA Amendment #3. The status sheet indicates that Cottage Grove station must be redesigned. There are reports that c ost estimates for some elements are exceeding the budget, but it ha s not been possible to confirm this with DPW, who is managing thi s project in its entirety. DPW has suggested deleting the rehabil itations of 61st St. and University Stations. This implies that any overprogramming is limited to $1.5 million at this point, the budget amount for these two· elements. The project contingency shown for this effort at 10% . of total program cost may · be optimistic. DPW has suggested supplementing the project budget with highway funds as another means to allow project completion. Howard/Dan Ryan This project is partially in limbo because of the City's rescop ing proposal, which seeks to eliminate Howard East Yard, Addiso n station, and 98th Street Shop Addition from the project scope. The rescoping proposal, dated January 15, 1988, and the addi tional information dated January 28, 1988 have not been provided to us and have not been reviewed. We have, however, reviewed IDOT's response to the City's proposal, attached as Exhibit I; Grant Amendment Applications #6 and #7; and Quarterly Progress Report #26 for the period ending December 31, 1987. The grant amendments and quarterly reports do not give a very clear picture of what the project's true status is concerning cost performance. Howard/Dan Ryan is clearly a very visible and important projec t for the region. It is certainly frustrating to have completed overpass structures at Howard street and many related project elements stalled. The delays associated with such inefficiencies are undoubtedly costly to the project and the region, and the funding and performing agencies need to redouble their efforts to resolve the impasse. It would appear that the reprogrammings required to restart the Howard work will be approved by UMTA and !DOT, but not necessarily with the elimination of any scope at 7 I ST.001 this time. This could then remain as an unsolved problem until grant closeout, could be the subject of a politically-engineered compromise, or could be "funded away" through a variety of mean s . Assuming that present cost estimates are accurate, which we have not reviewed, the total exposure is approximately $23 million: Element % Design Cost Basin Howard East Yard ? $8,580,000 Current estimate Addison Station 100 10,677,000 Current estimate 98th St. Shop 0 3,600,000 Original estimate, Addition 1985 $22,857,000 The degree to which these improvements are required to ef feet "substantial completion" of the project, and to open service on the realigned line is a question which might be studied in some detail. According to CTA, at least 50% of Howard East must be built to open the line; this seems reasonable. CTA believes 98th st. Shop Addition is also required. It seems clear that the ultimate benefit of the Howard/Dan Ryan connection cannot be achieved without the re-configured Addison station, but significant benefits can undoubtedly be shown without it, at least for purposes of opening service on the line. To determine the facts of this matter would require an operations study of the proposed Howard/Dan Ryan service. CTA's position is to apply for Section 9 furids for Howard East and to defer Addison station as an unfunded IST Program element. CTA claims 98th Street Shop Addition paperwork did not reach UMTA in a timely manner because of procedural problems between CTA and DPW. IDOT's position is that if any new funding is forthcoming f r om non-IDOT sources for these elements, local share -- if required -- must come from sources other than !DOT. UMTA has left the door open for Section 9 funding of these elements. Southwest Transit Project (SWTP) This project has potentially the largest exposure for the IST program because of its large size, and because it is subject to a "full-funding" contract with UMTA at $410 million project cost. However, because of the conservatism with which DPW approached entering into such a contract, and the obvious attention it h as received at IDOT and other agencies, it may in fact be in the soundest shape of the outstanding IST programs. 8 I ST . 001 r (a) Design and Construction The recently completed Ke llogg Corporation rev i e.w of the SWTP f included a major cost estimate review and concluded that the estimate was valid and soundly based. This report contains a number of somewhat contradictory cost estimates, undoubtedly f r om slightly different points in time. Attempts to resolve t hes e inconsistencies were not possible during this brief assignment. Using the budget version contained in Appendix D to the Kellogg report, a summary SWTP budget is: Est. Contract Escalated cost (w/ o contingency) 242,155 Design Contingency 31,450 @ 13. 0% 273,605 Force Account, ROW Acquisition, Testing and relocation 22,424 296,029 Professional Services 54,928 @ 18.6% Construction Management 22,000 @ 7.4% Construction Contingency 37,043 @ 12.5% $410,000 For a project approaching design completion, the contingencies applied appear to be at least adequate to protect the project total of $410 million. There was significant concern when Section 115 was bid and the low bid was 25% over the project estimate. The City modified the terms of the contract and readvertised, receiving a new low bid from a non-Chicago contractor 2% under the estimate. As a result of certain patterns of bidding which DPW felt it was observing, the U.S.D.O.T.'s Inspector General was also · notified a nd i s investigating. If the next few bids received are in line with this most recent experience, increased confidence should be generated in the $410 million project estimate. DPW believes the $410 million estimate is a good number. As a result of the advance funding in FY 87, scheduled completion date is now Oct. 1992 versus Oct. 1993 in the original plan and in the UMTA contract. This provides a financial cushion from reduc ed real inflation, as against an inflation adjustment which is base d l on originally programmed mid-points rather than actual mid-points of construction. l DPW states that the bid experience in the aggregate has been acceptable, but did not provide specific back-up for t his contention. 9 L I ST. 001 r r An additional soft spot for the SWTP is the right-of-way and railroad agreement area. DPW has agreements with all the required railroads except Conrail and expects this agreement r within a few months. The resulting railroad force account work will not take place in the 1988 construction season in any case. This area should be monitored closely for unforeseen develop ments. Accordingly to Quarterly Progress Report 15, issued Feb. r 1988, ROW acquisition is progressing well, but few transactions have settled. It is too early to determine how close the ROW budget is, but overall project impact should be within acceptable limits. (b) Rapid Transit Cars The recent program budget funds $94 million for cars, based on a quantity of 72. DPW believes this number is sufficient for opening the line. In a recently completed fleet analysis, the CTA identified a need for 72 cars to meet anticipated service needs in 1992 and for several years therafter on the SWT line. This number does not include maintenance reserves or spares. The CTA has given assurances that it will supply the balance of cars necessary to meet service needs. This requirement will be incorporated into a maintenance/operations agreement which will go into effect when the SWTP is transferred to the CTA upon completion. A joint procurement with CTA is to be on the street this fall. If bids should exceed $1.31 million/car, or the required number of cars is higher than 72, a shortfall could develop which might have to be resolved within the confines of IST Program funding. RTA has raised the car fleet question with CTA and DPW (see Exhibit J) and resolution may be forthcoming shortly. (c) Reserve The amount referred to as "reserve" on the IST Program sheet represents what is referred to in the full-funding grant agree ment as "Extraordinary Cost Contingency Account." The grant agreement stipulates five bases for a claim for extraordinary costs resulting from: 1. Inflation, actual index rate over assumed rate I 2. Acts of God 3. Excess property costs in eminent domain and l judgement situations 4. New federal regulations l 5 . Unavailability of funds from Congress. l 10 L IST . 001 r r It should be borne in mind that UMTA must approve the use of any of the "reserve" funds on a case-by-case basis, in its sole r discretion, and subject to the availability of funds from Congress. Exhibit K is the inflation adjustment formula from the UMTA grant r agreement. (The formula is in error, but everyone appears to be applying it logically rather than literally.) The implied rate of project inflation used in preparing Table 3.0 of Exhibit K is 3. 6% growing to 3. 8% compounded. The actual rate of inflation from the Ch i cago BCI index from March 1986 to February 1988 is approximately 4 .1% compounded. This implies that inflationary adjustments will be "earned," but will not be large unless the pace of inflation quickens significantly. Inflation amounts dictated by the formula and in excess of the $17 million fund could be requested by the City out of otherwise available IST funds. If these are exhausted, Section 3 money might be available, but the City could not apply -- one of the operating agencies would have to. 5. Conclusions A. overruns From the standpoint of cost to complete work originally contemplated (as opposed to contracted for), there is no doubt that significant "overruns" have occurred. The IST Program has tended to separate design from construction so that more elements· are designed than are contracted for construction. If this approach is continued, the true overruns can be limited. B. Scope Reductions These have occurred before, as in Exhibit G, showing i terns deleted from the Subway Renovation Program. If good reasons exist (such as: estimates based on inadequate engineering design, project "substantially" completed, etc.) UMTA and IDOT might consider accepting reduced scope. IDOT claims to have never done this, but in an overall regional solution for the IST program this should not be ruled out. This would be applicable I particularly to the less critical projects such as Loop Rehab and Jackson Park El. l C. Additional Sources of Funding Highway money could be utilized by transferring certain projects into the highway-IST program. l DPW believes this can be done with the Mayor's approval. According to DPW, $75-80 million of L 11 L IST.001 highway money is programmed but somewhat r 11 "available • Politically acceptable s h ifting may. amount to 10-15% of such funds. State Street Mall funds were also mentioned by DPW. Section 3/9 funds. r These and all other approaches should be considered as a means to ensure the completion of the SWTP and the Howard/ Dan Ryan projects because of their great visibility, large sunk costs, r impact on large numbers of riders, and their abilit y to rejuvenate CTA service a nd image. { I l I l L 12 L IST.001 r r 6. EXHIBITS r r r r I l l l I L 13 IST.001 =::< :. _:_ ~ - - RECEIVEG -- AP R 2 5 1988 U.S. Departrnem Req ion V 300 South Wack.er Or1V e r of Transportalion lllino1s, Indiana, M ichigan, Minnesota. Ohio, W1scons1n NJM~,l~t~~~~t'ic~2T. Urban Moss Transportation r Admlnlstrotton r Mr. Davids. Williams, Jr., Acting Commissioner 2 o APR 1988 Department of Public Works City of Chicago City Hall, Room 406 · Ch i c ago, Illinois 60602 Re: Interstate Transfer Program Dear Mr . Williams: We have received the city's letter dated January 15, 1988, · · providing a proposed rescoping of the Howard/ Dan Ryan Project. We have also receiv ed a copy of the City's April 6, 1988 letter t o the Illinois DOT providing additional information on the res coping. Before commenting directly on . the Howard/ Dan Ryan rescoping proposal, we want to take this opportunity to first raise an overall concern on the City's Interstate transfer program. Specifically, we are concerned with the City's ability to c omple t e the projects currently under construction or other projects l proposed for Interstate transfer funds within the amount o f funding available. l As you are aware, the grant contract for rehabilitation of t he Loop El (Project No. IL-23-9016,. Amendment 06) contained a spe c i al provision regarding the rescoping of the project which was to be accomplished in October 1987. Yet , as of this date, we have received no information regarding cost overruns or proposed rescoping of this project. In addition, we have been informed that esc alation due to inflation for the Southwest Rapid Transit project is currently projected to be $8.5 million more than contained in the project cost estimate. such a cost claim c ould further diminish the City's reserve account of Interstate transfe r l funds. In light of these overall concerns on the Interstate transfe r program, we are requesting that the City submit b y June 30, 1988, a c omprehensiv e financial forecast, scope of work and completion s chedule for all Interstate transfer projects. To the exte nt tha t s ome information is available from the Howard/ Dan Ry an rescoping L propos al and the Southwest Full Funding Contract, a summary of these p r ojec ts as they relate to the total program may be l i ncluded. l L J r 2 Part I, Section 2 of the UMTA grant contracts executed by the City r for these projects provides that "The grantee agrees to undertake and complete the project, ... , substantially as described in its application." The information requested above should form the r basis for determining for each project what constitutes substantially complete. Until this information has been received, reviewed and agreed to by UMTA, we will be unable to take approval action on any pending Interstate transfer grant application. Turning to the proposed rescoping of the Howard/Dan Ryan project, according to the proposal, three project elements {Howard Yard East, Addison Station and 98th Street Shop Addition) would be dropped from this project. As a result of this action, approximately $14.5 million {total) of existing grant funds would be available to cover the current cost estimates for other construction contracts {it should be noted that the 98th street Shop Addition at $3.6 million was never funded under this project). In addition, the City has indicated that an additional $2.25 million {$1.91 million UMTA) in Interstate transfer funds will be required to fully fund the remaining project elements. As stated above, our grant contract with the city requires that the project be completed substantially as described in the grant application, which in this particular circumstance includes · construction of Howard Yard East, Addison Station and 98th Street Shop Addition. However, we understand the urgency on the part of the City to transfer funds from these project elements to fully fund the current cost estimates for Howard Yard West and Train Control contracts which are ready for bid. Therefore, we are concurring in budget transfer #19, which moves funds from Hbward Yard East and Addison Station to the more critical contracts. However, we will not at this time remove the I scope of work for these project elements from the grant contract or the project budget. As part of the total Interstate transfer project information requested previously in this letter, the City l should identify how these project elements will be funded, and set forth a project schedule to complete the scope of work or amend the grant accordingly. l Lastly, in the city's January 15, 1988 rescoping proposal, it is stated that funding for the Howard Yard East would be sought from UMTA Section 3/9 capital funds. Since it is both the City's and UMTA's intent that this project be funded with Interstate transfer fu.nds apportioned to the area, we are not in a position to support any request for discretionary Section 3 funding for the Howard Yard East. Similarly, we would not be in a position to support Section 3 funding for Addison Station or for 98th Street Shop l Addition. l 3 r Please call if you have any questions on this matter. r I Sincerely, ~ fJ. Joel r Area I cc: L. Wheeler, IDOT R. Paaswell, C1'A / T. Weigle, RTA z.. / R. Hankett, City of Chicago I A. Biciunas, CATS L. Koncza, City of Chicago l I I l l l L Exhibit 3 ...... ORIGINAL INTERSTATE TRANSFER PROGRAM ALLOCATIONS Federal Dollars (Total Dollars) ·in Millions City of Chicago Suburban Area Accelerated FAU -0- $68.0 (80.0) [ 7% ] Highways $299.6 (352.5) 795 . 7 (936.1) [ 32% ] [ 84% ] Transit 649. l (763.6) 85.0 (100 .0} [ 68% ] [ 9% ] ======TOTAL $948.7 (1,116.1) $948.7 (1,116.1) NDF 10-30-87 I l l I L exhib i t c REVISED INTERSTATE TRANS FER PROGRAM AL LO CATIONS Federal Dollars (Total Dollars) in Millions City of Chicago Suburban Ar ea Accelerated FAU -0- P9.o (92.9) [ 7% J Highways ~387 . l (455 . 4) 976.0 ( 1, 148 . 2) [ 33% ] [ 84% ] Transit 770.4" (906.4) 103.8 (122.1) [ 67% ] [ 9% ] ======TOTAL $1, 157.5 (l,361 .8) $1,158.8 (l,363.3) I l NDF { 10-30-87 l l L l L L I I Exhibit D I Documents Reviewed DPW Progress I DPW Grant Reports Project Applications/Date Number/Date Other Loop El #3' (5/85) #20 (1/88) #5 ( 5/85) #6 (4/87) Jackson Park El #2 (5/85) #16 (1/88) State St. Subway #3 ( 5/85) #24 (1/88) Dearborn st. #3 ( 5/85) #24 ( 1/88) Subway Downtown Ped #3 (5/85) #20 (1/88) Passageways Howard/Dan Ryan #6 (4/86) #26 (no date) #7 (4/88) Southwest Transit #5 (8/87) #15 (2/88) Kellog Study #6 (4/88) Report for IDOT (10/87) UMTA Grant Agree- ment, Amendment 03, 07/28/86 Southwest Transit Rev 3/23/88 cars Suburban IST/ IDOT Quarterly Parking A Progress Report, 2/16/88 Rail Bridge Rehab/ #20 (1/88) Reconstruction O'Hare Extension #44 (no date) l Transit Security (2/88) Communter Railroad #19 ( 1/88) l Viaduct Rehab II L Exhibit E Meetings and Persons Contacted May 4 UMTA Mike Higginson Peter Slominski May 5 CTA Marty Johnson May 5 DPW Dick Hankett Chris Krueger May 6 IDOT Neil Ferrari Steve Schindel Joe Voccia l l L L ( ( Exhibit F. •. ~. . - - I I Illinois Department of Transportation /: ,.· ·=- ,.,.- ( c.. • - Memorandum c, .·/V".// ~ . ·.· To: Kirk Brown . ./ From: Dale A. Janik Subject: Interstate Transfer Status Date: April 29, 1988 "\. ' \ The status of Illinois Transfer II accounts through March 31, 1983 is shown on the attached chart. Also included are project lists showing Federal obliga~ions charged to each account. FHWA's report showing each State's balance is not included~ the report has not been distributed by FHWA. The $29,776,000 ·supplemental allocation received in the 1987 STAA has been incorporated in the March 31, 1988 balances. The $21,250,000 added to the City balance is $6,362,000 more than the 50 percent share of the supplemental allocation. Likewise, the $8,526,000 added to the Suburbs balance is $6,362,000 less than the SO percent share~ It has been proposed that this imbalance be adjusted at a later date. ' ·- Attachment \ \ WM/baa Program Management \ cc: A. E. Biciunas O. C. Dees R. L. York J. R. Olds \ . : . J. w. Mccree D. L. Wolaver R. C. Wehner / . ' ;,. .· .·· .. Stephen Schindel '·· --· . ·. . ~ R. Hankett ..:=-~-~~\(:· : .: . - '1. ·. ::··; ·t . . . . ··.·:.:.· .·• :- . ·. -. . .. .- ~ .:: t .:: ·" ~-: . . ·' :-... . . : :· .· .. ·' ,: I . ... : . : . .. , . ·-:~:·. ~~ - · ·...... : • ... PBM 158 • .' • • : : , . ·: t" r,> c l ~ TE R ST ATE T RANS FE~ ST AT US TRANS FER ~ ~or,; L 08LIEAT!O S!: DEC .31.1 987 OBLIGATIONS BALANCE THP. L! !RAUSFER 2 9ALANCE JAH.-11AR. 1988 ~ AR. 31, 1988 llAR. 31 , m s CITY ------ H!EHllAYS :t. 633. 337 145b,642l 72,099 ,979 315, 046, 926 TR ANSIT 164 ,832,178 0 186,08-~ 605,521 ,555 TOTAL 236,465, 515 l456,642l 259, 172, 157 920,568,481 SUBUF:BS ------ riCCELERAT ED FAU Hl,43b 13.~65 42 7,871 79,548,518 H! EH\IAYS 340 ,812,933 26,617,512 314, !95 , 421 66 1,806 ,910 I TRAt!S!T 33,594 ,524 !,051,450 H,059 ,074 l3l 71 , :97, 758 l I l I TOTAL 374,939,893 27, 682,52? 355, 682 , 36& e11 ,1i43,oao TOTAL TRANSFER 2 6 1 1. 304 , 40~ 12 1 27 ,225,885 61 3,854, 523 1, 732 ,211,567 TRANSFER l OBL!EATl OHS •••••. ••• •• •••.••.•.•. •.••.•. . •.....• .•.• ...... ••••• .•. •••. .• 230 ,882,906 l TOTAL OB LIGAT IONS .•...... ••...••. ••...... •...... •...... •... • ..•.. . •. •• l , 963 , 094 , ~73 " ') , _ , ~ 1 • • ~ s). l 17,911,39/i 9Y FHWA ( "~Pie"" ' .... ~ f29,77b,000 WAS ADDED TO BALANCE: -- f21,250 ,000 CIT Y; SB , 5~6,000 SU BU~B S. / [ IMBALANCE OF Sb,3b2,000 INT OT ALS . ~ < .- - . l ---~ . --' .) -... . ' ~ • • ' • ' • : ' ' I o ~ . . 1·~ :: · --" I ~ ' J . · .•.· . , \ . .. " .... L \ .. c-TRANSFER 2 PROJECT LIST c- FEDER AL OBLIGATIONS THR U MARCH 31, 1988 CITY OF CHICAGO - TRANSIT AMOUNT PROJECT DESCRIPTION FFY 79 Award 13,705,645 23-9001 CTA. Winterization r (State Grant 128) FFY 80 Awards 510,000 Planning 85,000 Pedestrian passageways 63,750 Station security 170,.000 Howard-Dan Ryan · 161,500 Howard Yard E.I.S. 29,750 SW Transit 29,538, 105 23-9001 Purchase up to 125 articulated buses & (State Grant 129 engineering of Loop EL stations and & 189) rehabilitation of the Loop EL structure 5, 196,050 23-9007 Initial engineering and start of track (State Grant 130) & structure rehabilita~ion of Loo p EL 2,082,500 23-9006 Initial engineering for expansion of (State Grant 150) Dan Ryan Yard and a physical connection between Dan Ryan & State Street Subway at 17th St. 177. 633 23-9005 Engineering of the pedestrian passageway (State Grant 151) connecting ICG Randolph St. Station with State St. SubHay 1,028,500 23-9004 Engineering for reconstruction of commuter {State Grant 152) railroad bridges at Kastner & 25th and North & Kennedy and for rehabilitation of bridges I at 74th, 78th, 79th, 80th & 81st along RI 944,350 23-9007 Initial engineering for expansion of Howard (State Grant 161) Yard l 39,477, 138 Subtotal FFY 80 Awards l FFY 81 Awards 692,750 Planning 153,000 Downtown distributor 442,000 S.W. Transit l 42,500 Howard-Dan Ry an 55,250 Pedestrian passageways 13,430,000 23-9013 O'Hare extension l (State Grant 028) 586,500 23-9001 Spare parts for articulated buses l (State Grant 129) L ( ( AMOUNT PROJECT DESCRIPTION 255,000 23-9007 Loop EL - Ada~s/Wabash station rehabilitation (State Grant 130) 5, 188,400 90-9009 Security in CTA stations - installation (State Grant 170) of security devices in 10 CTA stations 2,252,500 23-9010 State St. Subway - renovation & r (State Grant 172) capacity improvements 888,250 23-9012 Dearborn St. Subway - renovation & r (State Grant 176) capacity improvements I 23,293,400 Subtotal FFY 81 Awards FFY 82 Awards 85,000 29-9002 Planning grant for southwest corridor transit improvement 6,375,000 23-9006 Howard-Dan Ryan - Howard Yard., Addison (State Grant 150) Station, Subway Connection, 98th St. Yd. 1,742,500 23-9005 Downtown pedestrian passageways - Randolph (State Grant 151) St. Passageway, Garland Court to Randolph St. Station 637,500 23-9007 Howard - Dan Ryan - Howard Yd. Engr. (State Grant 161) 2,096,950 23-9010 ·subway beautification & noise abatement (State Grant 172) .- State Street Sub\~ay 3,655,000 23-9012 Subway beautification & noise abatement (State Grant 176) - Dearborn Street Subway 1,831,750 23-9015 Loop Rehab - Rehab Stations @ State/Lake, (State Grant 186) Madison/Wabash, State/VanBuren, & LaSalle/ VanBuren 8,075,850 23-9016 Loop Rehab - Rehab Stations @ Adams/Wabash & (State Grant 190) Quincy/Wells and Structure rehab on Lake & Wabash legs. l 24,499,550 Subtotal FFY 82 Awards l l l City-Transit P. 2 ( r -AM---OUNT PR OJECT( DESCRIPTI ON I FFY 83 AWARDS 2,550,000 23-9013 O'Hare Extension (City provi ded match) 14,535,000 23-9006 Howard-Dan Ryan - engineering of How ard Yd. r (State Grant 150) train control; purchase substation equipment, rail & crossovers; construct 5 bridges & facilities@ Addison Station 3,400,000 23-9005 Downtown pedestrian pa ssageways - complete (State Grant 151) construction. from Randolph St. Station to State St. Subway l. 530, 000 23-9004 Reconstruct 5 commuter railroad bridges (State Grant 152) on RI RR at 74th, ?8th, -79th, 80th & 8lst r Sts. 6,035,000 23-9010 Subway beautification & noise abatement - r (State Grant 172) State Street Subway l, 454, 350 23-9015 Loop Rehab. - engineering for structural (State Grant 186) rehab. of Central Area Loop Elevated, I Southside Mainline and Lake St. Line 19,540,650 23-9016 Loop Rehab. - station @ State of IL Center I (State Grant 190) material purchases for Central Area Loop Elevated, Southside Mainline and Lake St. Line; rehab. Ravenswood Line, Wabash Ave. I leg and Wells St. leg 7,395,000 23-9020 Southwest Rapid Transit Line - preliminary I (State Grant 200) engineering & architectural design 2,550,000 23-9023 Jackson Park Rehab. - design/engineering (State Grant 222) for 2 new stations, 2 new terminal and 2 station rehabilitations and for noise abatement on the line I 58,990,000 Subtotal FFY 83 Awards FFY 84 AWARDS \ 56,695,000 23-9006 Howard-Dan Ryan - design engineering of (State Grant 150) facilities @98th Street yd & Howard yd; construct major items @Howard yd; subway connection & 98th Street yd; and purchase traction power cable l 56,695,000 Subtotal FFY 84 Awards City-Transit P. 3 L ( r AMOU NT pq QJECT DES CRI PT IO ~ I r FFY 87 Al/ARD S 6,210,950 23-9016 Rehabilitation of Lo op elevated structure (State Grant 190) on Rave ns wood , Lake Street, SS HL and station rehabilitation at Adams/Wabash 64,005,000 23-9020 Southwest Rapid Transit Line - Preliminary (State Grant 200) engineering, engineering, construction and track work 5,355,000 23-9023 Jackson Park Renovation - Dorchester terminal (State Grant 222) construction 38,535,668 23-9020 Southwest Rapid Transit Line - Engineering, (State Grant 200) train control, communications, traction power r and elevators [ 114,106,618 Subtotal FFY 87 Awards 605,521,555 TOTAL \ \ l l l (1) New project this quarter. l City-Transit P.5 L r Exhi bit:. G TAB LE I [ Descri ption of Subway Re novation Program (As Re vised May 1985) r r PROGRAM ELEMENT TOTAL COS T STATE STREET Roosevelt s 4,090,000 Jackson/Van Buren 1,500,000 Adams/Jack so n (Design Onl y) 178,000 Wa shington/Madison (Desig n Only) 200,000 Ra ndolph/Washington 741,000 Lake/Randolph 1,500,000 Continuous Tunnel 7,565,000 Chicago Avenue (Design Only) 340 ,000 ETS (10) 1,761,00 0 { Total Cost - State Street s 17,905,000 I DEARBoRN STRE ET Rand olph/Washington s 1,180,000 Washington/Madison 1,865,000 Adams/Jackson 2, 107 ,000 Lake Transfer 2,000,000 ETS (4) 1,540,000 Total Cost - Dearborn Street s 8,695,000 ELEMENTS DELETED STATE STREET DEARBO RN STREET Harrison Continuous Platform Van Buren/Congress Madison/Mo nroe Monroe/Adams Mo nroe/ Adams l Madison/Monroe Jackson/Van Buren Washingto n/Mad ison (Const . ) La Salle/ Congress Grand Kiosks and Stairs Chicago Avenus (Const.) l Adams/Jackson (Const.) L l 15 ,..... ____, - ~ r- .- r- r- ..--- '-·,.:. ;' j l ... JACKSON PARK TRANSIT IMPROVEMENT PROJECT SUMMARY SHEET {$000) RESPONSIBLE ./\GENCY PROJECT ELEMENT OPW CTA REcnvro-- ---Ttff/\L COST* ST/\GE Structure Demolition x 1,481.3 1,158 Demo lition 100 :~ Structure Reconstruction x 5,840.9 6,285 Design 95'.'!. Dorchester Terminal Complex** x 1,740.5 3,962 Design 65% Cottage Grove Station*** x 4,634 .8 3,976 Design 9c:•:J"'" King Drive Station x 411 3,976 Design 45~: ....- N 61st Street Station x 160.5 750 Design Pending University Station x 161 750 Desi9n Pending Environmental Assessment x 50 50 FOl'ISI 2/13/135 Right-of-Way Engineering x 23 23 llndcn.,iay 50:.. Noise Abatement Contract x 50 50 Cornplcted l OWJ tTJ >: ::J" Reserve , x 0 1 ,900 t:t\ I-'· o· i t-· Project Administration x 295 . 5 520 Ill\ rt ;:I; Contingencies x 251. 5 2,600 ll/\ Total ~mo- -rzo~DOO *Cost represents net project costs. **Includes all structure demolition, structure reconstruction and tennin.tl con1r lcx design funds. ***Proj ect element must be redesigned. ,. Exh i bit I I - ~ -~ Ulinois Department of Transportation Division of Public Transportation 31 O South Michigan Avenue - 16th. Floor I W Chicago, Illinois 60604 February 29, 1988 r Mr. David S. Williams, Jr. Acting Cormlissioner Chicago Department of Public Works 320 North Clark Street - Room 400 r Chicago, Illinois 60610 I Attention: Mr. Richard G. Hankett, Deputy Corrrnissioner Subject: Howard/Dan Ryan Rescoping Proposal, CAP-80-150-IST f Dear Mr. Williams: The Divis ion has reviewed the rescoping proposal for the Howard/Dan Ryan project, submitted under cover letter dated January 15, 1988, and the additional information submitted January 28, 1988. The rescoping proposed by the City consists of five separate actions. Enclosed is the Division's response to each action. This response includes, in some cases, a request for additional information or · suggested activities which should be completed prior to final consideration of these actions. Following are premises which underlie our response: ( 1) The Governor's approva 1s of grant awards for the Howard/Dan Ryan project were based on the City of Chi ca go's grant applications. The last application .was intended to be the final request for funds, and included a statement that the funding requested was sufficient t~ complete the project. (2) The grant contract between the State and the City describes the work items which are funded through the contract. The grant contract specifies that all work items are funded to completion. (3) The Division allows flexibility in the redistribution of \ funds within budgets when actual costs for specific work varies from initial estimates. l l L L r Mr. David S. Williams, Jr. f ebruary 29, 1988 Page 2 r Based upon these premises: o The Division will allow a redistribution of existing grant funds to enable work to proceed on the project . (Our r response does not constitute or imply an evaluation of the factors which resulted in the City's request for this redistribution.) o The Division will not delete work items from the grant without a corresponding reduction in funds; nor will it recorrmend "new" grant awards to fund those work items which are already funded. Thus, when funding is sought in the future for the Howard East Yard and the Addison Street Station, the replacement for the nearly $2.2 million non-federal share already awarded by the State will have to come from sources other than the State. We will be happy to meet with you and your staff to discuss the rescoping proposal and our response. If you would like to set up such a meeting, please call Neil D. Ferrari at 793-3616. Sincerely, ~/J?.~ Linda M. Wheeler Director cc: Or. Robert E. Paaswell, Executive Director, CTA l I I L L r IDOT RESPONSE TO THE HOWARD/ DAN RYAN RESCOPING PR OPOSAL r Budget transfer {or revision) #18: r The City proposed to 11 temporarily 11 shift funds from Howard Shop to Howard Tower. The funds currently awarded for Howard Shop are less than the estimated contract amount; this shift increases the amount of shortfall for f the Howard Shop but allows the award of the Howard Tower construction contract. !DOT Response: On February 9, 1988, IDOT concurred on this budget revision and the award of the Howard Tower construction contract. Budget transfer 119: The City has proposed that the total amount of funds for construct ion of Addison Station and Howard East Yard be shifted to other line items - Howard Shop, Howard West Yard, Howard Train Control and Traction Power. This will allow- the construction contracts for all of these items to be bid as designs are completed. (Requests for permission to advertise for bids for Howard West Yard and Howard Yard Train Control have been submitted to IDOT; concurrence is pending the results of this rescoping process.) IDOT Response: IDOT agrees to proceed with this revision pending receipt of the following: ( 1) Copies of the most recen·t ... 'construction es~imates of a 11 contracts still to be bid, along with adjustments the City has made to those estimates during the development of the rescoping proposal. (2) Verification by the City and CTA of the construction mid-points for all contracts yet to be bid, and validation of the construction estimates for those.contracts. CTA should concur with these estimates in writing. (3) A schedule of the remaining activities required to complete the project. This schedule must include a projected date for 11 cut over, 11 and the dates by which construction contracts must be bid and awarded, and construction completed, in order to permit l 11 cut overw on that date. L IDOT Response to the Howard/Dan Ryan Rescoping Proposal I page 2 I The Division will continue to hold the pending requests for concurrence to advertise which are proposed to be funded in part through this revision until the requested information is submitted r and reviewed. Upon the Division's acceptance of the additional information, the budaet will be revised and concurrence to advertise will be given. - r Although the Division is willing to revise the budgets for the construction of Addison Station and Howard East Yard resulting in $0 available for those contracts, we cannot concur in deleting the associated scope from the grant. !DOT has consistently denied requests to delete scope from a grant without the de committal of funds awarded for that scope. This means that the City will remain obligated under the existing grant contract to complete the construction of Addison station and Howard East Yard. If the grant is closed out prior to the construction of these facilities, the City may be liable for the return of an amount equal to the State share of funds originally awarded for these facilities. This does not preclude the City or CTA fr.om obtaining additional funding for these facilities from sources other than the State; however, it does suggest that construction be completed prior to closing out State grant CAP-80-150-IST. The poss ibi 1ity of the award of additional State funding for these construction contracts is discussed below. Award of Additional IX funds: The City has proposed that it increase the total amount of IX funds for the Howard/Dan Ryan project by $2,250,000. In addition to project administration and contingencies, these funds would supplement the existing funds for Howard Shop. IDOT Response: The Department will censider this application on its own merits. The decision on the provision of local share for any new awards is dependent upon (1) the availability of· State funding for capital grants, and (2) the demonstrated need for the funds. As currently proposed, the above request would result in a budget for Howard Shop which exceeds the current (25%) estimate. The State wi 11 not make an award for an amount it knows to be in excess of what is required to perform the work. The design of Howard Shop l should be accelerated so that an estimate based on a substantially completed design can be submitted with an application for additional L funds. l L L IDOT Response to the Howard / Dan Ryan Res co p i n~ Pro posal page 3 r I New Application for Addison Station: The City has indicated that it will apply for funding for the construction of Addison station at some time in the future. The source of funds has not been r identified. The amount currently estimated for this work is $10,677,000. IDOT Response: Since the Department cannot concur on the deletion of this scope from the existing grant contract without the r decommittal of the corresponding funds, the State cannot provide the local share for an award of 11 new 11 funds to replace previous awards still in effect for the construction of the Addison station. This does not preclude the City from obtaining the local share from other sources. New Application for Howard East Yard: The Chicago Transit Authority has indicated (in a letter to Mr. Richard G. Hankett dated January 19, 1988 and signed by Dr. Robert E. Paaswel l) that it will apply for funding for the construction of Howard East Yard with a new Section 9 or 3 grant, to be applied for in FY 88 or 89 . The amount currently estimated for this work is $8,580,000. !DOT Response: Since the Department cannot concur on the deletion of this scope from the existing grant contract without the deconrnittal of the corresponding funds, the State cannot provide the local share for an award of "new 11 funds to replace previous awards still in effect for the construction of the Howard East Yard. This does not preclude the City from obtaining the local share from other sources. l 0032c l l l L '-'A 1IJ.J..ll. L. v r r January 27, 1988 l\tlemo rand um r TO: Many Johnson Dick Hanken FROl\·1: John Gaudette Chief Financial 0 SUBJECT: .SOUTHWEST RAPID TRANSIT LINE FLEET PROCUREMENT As part of our recent work regarding financing options for the CTA procurement for 228 rail cars, staff reviewed the justification for the new rail cars. In the course of this review, several issues arose with regard to the Southwest Rapid Transit Project which need clarification. I want to review the factu::!.l issues with you so that we can frame the policy issues, if any, for considention by the RTA Board. In ~farch, 1987 CTA completed an analysis of their fleet needs through 1996. This analysis included the following rail car requirements for the Southwest Transit Line: Service Requirement 72 Terminal Reserve 8 Scheduled Inspection 2 _Spares 16 Total 98 ,• The Southwest project has been estimated to cost $496 million (March,1986 dollars). The City and UMTA have entered into a full-funding contract for the project cost of $410 million excluding rail cars. The ori5inal cost estimates for the Southwest project included S86 million for the 98 rail cars. This was hased on an estimated c0sr of $878,000 ~:!r l vehicie in March, 1986 dollars. Of the $86 million originally earmarked for rail cars, the City is now allocating only $69 million for the Southwest rail cars, reserving $17 million for extraordinary contingencies for the total proj-~ct This S69 million would purchase 52 I of the 98 rail cars required for the Southw~st line. The pending CTA rail car procurement is for 228 rail cars at a cost of $282 million in current dollars or $1.24 million each. This includes 34 rail cars for the Southwest line. The additional 52 rail cars for the Southwest line, funded from Interstate funds, would bring the total order to 280 rail cars. CTA has proposed an option for an additional 7 6 rail cars increasing the total order to 356 rail cars. This option includes 12 rail cars for the l Southwest. These are the rail cars originally to be funded with the S 17 million contingency reserved by the City; CTA. has requested that these rail cars be funded from non-Interstate sources. L Page2 I r The total rail cars for the Southwest line are proposed to be funded as follows: Cost Rail Cars City of Chicago r Interstate Funds $69 million 52 RTNCTA U1'ITA §3f) Pending Procurement $4)_ miffion .34 Option $17 million 12 I Total $128 million 98 In 1986, at presentations to the RTA Board. the City did conunit to fully meet the vehicle requirements for the Southwest line. 'This was to be funded from Interstate funds with ·the I City holding toth RTA and CTA harmless for any cost escalation. There are two issues from my perspective. They are simply what are the fleet requirements for the Southwest Line and how are they to be funded. Given the magnitude and importance of this procurement we need to agree on the facts, and formalize the specific obligations of the City, CTA and RTA. I hope that we can frame the factual issues tomorrow so that we can begin to develop the options and resolve this issues in the comir.g month. I I ·' L l L L . . ' . .!... • -'~. r r r Cost Escalation r The Government will adjust the maximum grant according to the following procedures: (1) The inflation calculation shall be performed as follows . For each contract listed in Table 3.0, the March 1986 cost estimate shall be multiplied by a ratio computed by dividing the monthly Engineering News Record Building Cost Index (BCI) for the Chicago Area for the ~id-point month by the BCI for ~~rch 1986. The difference between the product of this computation and the Estimated Cost at the Time of Construction, whether positive of negative, shall_ equal the Incremental Change for the applicable contract. The following formula shall be used to perform the entire computation expressed hereinabove: BCI Index at Incremental Est. Mar 86 Mid-point Date Est. Cost Time of Change = Cost X BC! Index-Mar 1986 Construction (2) Positive Incremental Changes for each Line Item as determined in accordance with Paragraph 1 shall be offset by Negative Incremental Changes of other Line Items, but the total project costs under the contract shall not be reduced below S410,000,000 by the above calculations. A Net Positive Aggregate Incremental Change shall result in an inflation adjustment. · (3) It is expressly understood that expenditures made by the City of Chicago . . will be reimbursable only to the extent that they meet all of the requirements of Section 104{c) of Part II of this contract. l l L L l I I .:iJI rr.a.! l 0 I i:C-Jwl-4 Sc..1:-..r. Tr..,..it ;i,..,Jllci uhult S.-, 5'<:11C11 I c.r.t?, : EJC : Er. 1 M hd Ta: r ~ : ~Id lloint : f'a.;tcr l f 91101 : ll.~.00 I ll.U~: llAintl'N:"C.'I ;cility IC, 43&., 000 : Jl-J.1-'Jl : 1.m: 12.. '%..coo 91 !OJ ll.C!l.00 I ll.llOO: r.o,,.,wd ~idiooly Su11e11 1:, ~ 000 : ll-<>r.-90 : I. 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