Orangeline Development Authority

ORANGELINE DEVELOPMENT AUTHORITY

The Orangeline ORANGELINE DEVELOPMENT AUTHORITY Development Authority is a joint powers agency REGULAR MEETING formed to pursue deployment of the Orangeline High Speed Maglev system in Southern Wednesday, February 14, 2007 California. The Authority is composed of the following public agencies: Cerritos Sheriff’s Station/Community Center – Community Meeting Room 18135 Bloomfield Avenue, Cerritos

City of Artesia Buffet Dinner – 6:00 p.m. City of Bell Regular Meeting – 6:30 p.m. City of Bellflower

City of Cerritos A G E N D A City of Cudahy

City of Downey 1. Call to Order

City of Huntington Park

City of Los Alamitos 2. Pledge of Allegiance

City of Maywood

City of Palmdale 3. Roll Call and Introduction of Attendees

City of Paramount

City of Santa Clarita 4. Public Comments

City of South Gate

City of Vernon 5. Approval of Meeting Minutes of November 8, 2006 and of January 17, 2007

Chairman 6. Resolution of the Board of Directors of the Orangeline Development Authority recognizing former City of Los Alamitos Mayor and Authority Vice Chairman Fred Freeman for his Scott A. Larsen Councilmember, service to the Authority City of Bellflower

Vice Chairman 7. Appointment of Authority Board Vice Chair

Vacant

Secretary 8. Resolution of the Board of Directors of the Orangeline Development Authority to Approve a Proposal and Application to the California Transportation Commission Gary Milliman City Manager, City of South Gate 9. Report on Agreement with Los Angeles County Metropolitan Transportation Authority to General Counsel secure use of public rights-of-way for the Orangeline High Speed Maglev

Michael Colantuono Colantuono & Levin, PC 10. Presentation of new logo and stationery design Treasurer/Auditor

Jack Joseph 11. Report on Caltrans pre-award audit Gateway Cities COG

Executive Director 12. Report on Member Agency approval of Milestone 7 Station Area Development

Albert Perdon, P.E. Recommendations

Supporting Agencies 13. Resolution of the Board of Directors of the Orangeline Development Authority to Approve out of state travel by the Board Chairman and Executive Director to meet with potential Gateway Cities Council of Governments private sector investors and federal Department of Transportation officials

Southern California Association of Governments 14. Approval of Warrant Register City of Garden Grove

City of Huntington Beach 15. Communication Items to the Board

City of Long Beach

City of Stanton 16. Communication Items from the Board

17. Adjournment – Next meeting March 14, 2007

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org DRAFT MINUTES OF A REGULAR MEETING OF THE ORANGELINE DEVELOPMENT AUTHORITY WEDNESDAY, NOVEMBER 8, 2006

CALL TO ORDER

City of Los Alamitos Mayor and Board Vice Chair Fred Freeman called the meeting to order at 6:30 p.m.

PLEDGE OF ALLEGIANCE

City of Los Alamitos Mayor and Board Vice Chair Fred Freeman led the assembly in the salute to the flag.

INTRODUCTION OF ATTENDEES (* Denotes Board Members)

Fred Freeman* – Authority Vice Chairman/Mayor, City of Los Alamitos Marsha McLean* – Mayor Pro Tem, City of Santa Clarita Debbie Helbig – Project Development Coordinator, City of Santa Clarita Paul Bowlen* – Mayor, City of Cerritos Steve Lefever – Director of Community Development, City of South Gate Frank Gurulé* – Mayor, City of Cudahy Maria Davila* – Mayor, City of South Gate Elba Guerrero* – Vice Mayor, City of Huntington Park Kirk Cartozian* – Councilmember, City of Downey Jack Joseph – Authority Treasurer/Gateway Cities COG Laura Biery – Administrative Analyst II, City of Palmdale Mike McCormick* – Councilmember, City of Vernon Robert A. Lopez – Advance Planning/Redevelopment Manager, City of Cerritos Thomas Martin* – Mayor, City of Maywood Sharad Mulchand – Transportation Planning Manager, MTA Daryl Hofmeyer* – Mayor, City of Paramount Steve Yee – City of Downey Gregory Nord - OCTA Albert Perdon – Authority Executive Director Charlene Palmer – Area Manager/Vice President, ARCADIS Jack Moriniere - ARCADIS Mary McCormick – Principal, MBI Media Maria Shafer – Minute Secretary, OLDA

PUBLIC COMMENTS

City of Los Alamitos Mayor and Board Vice Chair Fred Freeman opened public comments for those in the audience who wished to address the Authority on other than agenda items. There was no response and the public comments section of the meeting was closed.

ITEM 5 - APPROVAL OF MEETING MINUTES OF OCTOBER 11, 2006

MOTION: City of Cerritos Mayor Paul Bowlen moved to approve the meeting minutes of October 11, 2006, as submitted. City of Paramount Mayor Daryl Hofmeyer seconded the motion, which carried unanimously.

ITEM 6 - CONSIDER APPOINTMENT OF GARY MILLIMAN, SOUTH GATE CITY MANAGER, AS SECRETARY

MOTION: City of Paramount Mayor Daryl Hofmeyer moved to appoint Gary Milliman, South Gate City Manager, as Secretary of the Board. City of Huntington Park Vice Mayor Elba Guerrero seconded the motion, which carried unanimously.

ITEM 7 - RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGELINE DEVELOPMENT AUTHORITY TO APPROVE THE MILESTONE 8 – ORANGELINE MAGLEV COSTS AND REVENUE REPORT

Mr. Perdon introduced the item and noted it has been before the Board three times. He added that all questions from Board Members and City staffs have been addressed and deferred to ARCADIS representative, Charlene Palmer for a report.

Ms. Palmer provided highlights of the report and added that it will go under a lot of scrutiny. She noted that the MAGLEV is different than any other transit mode and reported that in Phase 2, ridership and revenue will be studied in detail. She addressed the definition of segments, cost scenarios for passenger stations, land needed for operations and maintenance facilities, parking spaces for each station and horizon year.

Discussion followed regarding distribution of profits and developing basic principles for same, location of central maintenance facility and determination of initial operating segment based on revenues.

Mr. Perdon reported that at this stage, the intent is to determine if the project, as a whole, is financially feasible and that a disclaimer will be placed in the report indicating that assumptions made will be reviewed in Phase 2.

MOTION: City of Paramount Mayor Daryl Hofmeyer moved to adopt the Resolution. City of Cudahy Mayor Frank Gurulé seconded the motion, which carried uanimously.

ITEM 8 - RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGELINE DEVELOPMENT AUTHORITY TO APPROVE THE MILESTONE 9 – ORANGELINE MAGLEV DEPLOYMENT PLAN

Ms. Palmer presented highlights of the Milestone 9 report including assisting with Phase 2 public/private partnership and funding, securing State legislation, the deployment plan, funding for next phases and various fold-in elements.

MOTION: City of Vernon Councilmember Mike McCormick moved to adopt the Resolution. City of Maywood Mayor Thomas Martin seconded the motion, which carried unanimously.

ITEM 9 - RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGELINE DEVELOPMENT AUTHORITY TO APPROVE THE MILESTONE 10 – ORANGELINE MAGLEV FINANCIAL PLAN

Mr. Perdon introduced the item, presented background and deferred to ARCADIS representative Jack Moriniere who reported this has been a joint task of the ARCADIS team and Authority staff. He presented details of the report noting that it will be a key document used to secure funding for the project. He addressed number of miles and stations,

Orangeline Development Authority November 8, 2006 Page 2 economics, safety, speed, comfort, convenience, reliability, freight, financial plan components, impacts of phasing the system, payment of debt and profits.

Brief discussion followed regarding testing assumptions and continuing research.

MOTION: City of Cudahy Mayor Frank Gurulé moved to adopt the Resolution. City of Vernon Councilmember Mike McCormick seconded the motion, which carried uanimously.

ITEM 10 - CONSIDER AMENDMENT TO AGREEMENT WITH ARCADIS EXTENDING THE CONTRACT TERM TO DECEMBER 31, 2007 AND APPROVE MODIFICATION AGREEMENT

Mr. Perdon reported that this item provides for a time extension, not a cost extension. He added that Legal Counsel has reviewed the amendment for approval.

MOTION: City of Santa Clarita Mayor Pro Tem Marsha McLean moved to approve the amendment to the agreement with ARCADIS extending the contract term to December 31, 2007 and modify the agreement. City of South Gate Mayor Maria Davila seconded the motion, which carried unanimously.

ITEM 11 - CONSIDER REPORT ON WEBSITE USAGE

Albert H. Perdon from Transit Media Consultants presented a report showing the activity of world-wide users of the Orangeline website. He addressed the definition of "hits", visit summary, time span, referral information, search engine summaries, top downloads, popular days and hours, top countries where the site is being reviewed, referring websites, search engine referrals, top search phrases, depth of visits and average visit duration.

Discussion followed regarding the possibility of linking the Orangeline website through individual city websites, getting articles in City and Community newspapers, including surveys on the website and the possibility of generating revenue through the website.

ITEM 12 - APPROVAL OF WARRANT REGISTER

MOTION: City of Vernon Councilmember Mike McCormick moved to approve the warrant register as presented. City of Maywood Mayor Thomas Martin seconded the motion, which carried unanimously.

ITEM 13 - COMMUNICATION ITEMS TO THE BOARD

Mr. Perdon presented communication items to the Board including the Treasurer's Report, Member and Financial Status, recent and upcoming meetings and legislative items. He discussed a seminar of the Los Angeles County Assessors Office where interest is growing for the Orangeline High Speed Maglev project.

City of Downey Councilmember Kirk Cartozian provided a summary of a recent Mobility 21 Conference where he, the Executive Director and Charlene Palmer spoke with Deputy Director Eric Swedlund of the Governor's office who offered to help with other key individuals in the State.

Mr. Perdon discussed community events in the cities of South Gate and Palmdale where information on the Orangeline High Speed Maglev project was presented. He also thanked

Orangeline Development Authority November 8, 2006 Page 3 the various cities for their prompt payment of invoices and referenced a media advisory announcing that the City of Santa Clarita was the first in adopting the Milestone 7 report.

ITEM 14 - COMMUNICATION ITEMS FROM THE BOARD

Discussion followed regarding canceling the regular Board meeting of December. Mr. Perdon will consult with legal counsel regarding the possibility of approving payments without having to meet and will communicate back to members.

CONSENSUS: Board Members concurred to cancel the regular Board meeting of December.

ADJOURNMENT

There being no further business to come before the Orangeline Development Authority, the meeting was adjourned at 7:35 p.m. The next regularly scheduled meeting will be held on January 10, 2007 at the same place and time.

______Gary Milliman, Secretary Attest:

______Scott Larsen, Chair

Approved:

Orangeline Development Authority November 8, 2006 Page 4

ORANGELINE DEVELOPMENT AUTHORITY

The Orangeline A G E N D A R E P O R T Development Authority is a joint powers agency formed to pursue deployment TO: Members of the Orangeline Development Authority of the Orangeline High Speed Maglev system in Southern California. The Authority is composed of the following FROM: Albert Perdon, Executive Director public agencies: DATE: February 14, 2007 City of Artesia

City of Bell SUBJECT: Resolution of the Board of Directors of the City of Bellflower Orangeline Development Authority Recognizing City of Cerritos former City of Los Alamitos Mayor and Authority City of Cudahy Board Vice-Chair Fred Freeman for his service to the City of Downey Authority City of Huntington Park

City of Los Alamitos

City of Maywood RECOMMENDATION

City of Palmdale That the Board adopt the attached Resolution: City of Paramount

City of Santa Clarita A RESOLUTION OF THE BOARD OF DIRECTORS OF City of South Gate THE ORANGELINE DEVELOPMENT AUTHORITY City of Vernon RECOGNIZING FORMER CITY OF LOS ALAMITOS

Chairman MAYOR AND AUTHORITY BOARD VICE-CHAIR FRED FREEMAN FOR HIS SERVICE TO THE AUTHORITY Scott A. Larsen Councilmember, City of Bellflower DISCUSSION Vice Chairman

Vacant The City of Los Alamitos held its biennial election for City Council members in

Secretary November 2006. As a result of the election, the City has assigned new

Gary Milliman representatives to the Authority. City Council Member Troy Edgar will serve as City Manager, the City’s new Representative to the Authority. City Council Member Dean City of South Gate Grose will serve as the new Alternate Representative. General Counsel

Michael Colantuono Colantuono & Levin, PC Former City of Los Alamitos Mayor Fred Freeman served as Vice-Chair of the Authority Board from November 2004 through November 2006. During this Treasurer/Auditor period, Mayor Freeman was a strong advocate for the Orangeline High Speed Jack Joseph Gateway Cities COG Maglev and served as an active member of the Board of Directors.

Executive Director Mayor Freeman provided strong leadership on the Board and served as a good Albert Perdon, P.E. sounding board for his fellow Board Members and for the Executive Director

Supporting Agencies who relied frequently on Mayor Freeman’s insights and advice on important

Gateway Cities Council policy issues. of Governments

Southern California Mayor Freeman made a significant contribution to help achieve the Authority’s Association of Governments goals for advancing the Orangeline High Speed Maglev. As the representative of City of Garden Grove

City of Huntington Beach the Authority’s first city from Orange County, he was effective in gaining greater

City of Long Beach awarness and undertanding of the Orangeline High Speed Maglev project by

City of Stanton other Orange County cities. His efforts have set the stage for additional cities in Orange County to become active members of the Orangeline Development Authority.

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

Resolution Honoring Fred Freeman February 14, 2007 Page 2 of 2

ATTACHMENT

1. A Resolution of the Board of Directors of the Orangeline Development Authority Recognizing former City of Los Alamitos Mayor and Authority Board Vice-Chair Fred Freeman for his service to the Authority

RESOLUTION NO. 07- 01

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGELINE DEVELOPMENT AUTHORITY RECOGNIZING FORMER CITY OF LOS ALAMITOS MAYOR AND AUTHORITY BOARD VICE- CHAIR FRED FREEMAN FOR HIS SERVICE TO THE AUTHORITY

WHEREAS, former City of Los Alamitos Mayor Fred Freeman served as Vice-Chair of the Authority Board from November 2004 through November 2006; and

WHEREAS, Mayor Freeman provided strong leadership on the Board and served as a good sounding board for his fellow Board Members and for the Executive Director who relied frequently on Mayor Freeman’s insights and advice on important policy issues; and

WHEREAS, Mayor Freeman made a significant contribution to help achieve the Authority’s goals and was effective in gaining greater awarness and undertanding of the Orangeline High Speed Maglev project by other Orange County cities. His efforts have set the stage for additional cities in Orange County to become active members of the Orangeline Development Authority;

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors does hereby express its appreciation to former City of Los Alamitos Mayor Fred Freeman for his service as Authority Board Vice-Chair and for his strong support of the Orangeline High Speed Maglev project.

The Secretary shall certify to the adoption of this Resolution.

APPROVED AND ADOPTED this 14th day of February 2007.

______SCOTT A. LARSEN, Chairman

ATTEST:

______GARY MILLIMAN, Secretary

I HEREBY CERTIFY that the foregoing Resolution was adopted by the Board of Directors of the Orangeline Development Authority at a regular meeting held on the 14th day of February 2007, by the following vote, to wit:

AYES: Board Members: NOES: Board Members: ABSENT: Board Members:

______GARY MILLIMAN, Secretary

ORANGELINE DEVELOPMENT AUTHORITY

The Orangeline Development Authority is a joint powers agency A G E N D A R E P O R T formed to pursue deployment of the Orangeline High Speed Maglev system in Southern TO: Members of the Orangeline Development Authority California. The Authority is composed of the following public agencies: FROM: Albert Perdon, Executive Director

City of Artesia DATE: February 14, 2007 City of Bell

City of Bellflower SUBJECT: Appointment of Authority Board Vice-Chair City of Cerritos

City of Cudahy

City of Downey RECOMMENDATION

City of Huntington Park

City of Los Alamitos That the Board appoint a new Authority Board Vice-Chair for the remainder of Fiscal

City of Maywood Year 2006-2007.

City of Palmdale

City of Paramount DISCUSSION

City of Santa Clarita

City of South Gate Former City of Los Alamitos Mayor Fred Freeman served as the Authority Board Vice-

City of Vernon Chair through November 2006. The Authority’s By-Laws state that, “Absent a unanimous vote of the Directors in attendance when the vote is taken, the Chair and Chairman Vice-Chair shall represent Members located in different counties.” Scott A. Larsen Councilmember, City of Bellflower The Authority Board Vice-Chair possesses and performs all the powers and duties of

Vice Chairman the Authority Board Chair during the absence or inability of the Chair to act for any

Vacant reason.

Secretary

Gary Milliman City Manager, City of South Gate

General Counsel

Michael Colantuono Colantuono & Levin, PC

Treasurer/Auditor

Jack Joseph Gateway Cities COG

Executive Director

Albert Perdon, P.E.

Supporting Agencies

Gateway Cities Council of Governments

Southern California Association of Governments

City of Garden Grove

City of Huntington Beach

City of Long Beach

City of Stanton

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

ORANGELINE DEVELOPMENT AUTHORITY

City of Bell SUBJECT: Resolution of the Board of Directors of the City of Bellflower Orangeline Development Authority Approving a City of Cerritos Proposal/Application to the California City of Cudahy Transportation Commission City of Downey

City of Huntington Park

City of Los Alamitos RECOMMENDATION

City of Maywood That the Board adopt the attached Resolution: City of Palmdale

City of Paramount RESOLUTION OF THE BOARD OF DIRECTORS OF THE City of Santa Clarita ORANGELINE DEVELOPMENT AUTHORITY City of South Gate APPROVING A PROPOSAL/APPLICATION TO THE City of Vernon CALIFORNIA TRANSPORTATION COMMISSION

Chairman DISCUSSION Scott A. Larsen Councilmember, City of Bellflower In November 2006, California voters approved a series of infrastructure bond Vice Chairman measures, including Proposition 1B, that provide a new funding source for

Vacant infrastructure improvements. Proposition 1B is specifically for transportation

Secretary infrastructure improvements and authorizes the State to issue $19 billion in

Gary Milliman general revenue tax obligation bonds to finance transportation projects. The City Manager, California Transportation Commission is responsible for approving the projects City of South Gate to be financed from bond funds. General Counsel

Michael Colantuono Colantuono & Levin, PC On November 21, 2006, Authority staff and ARCADIS representatives had an opportunity to meet with key staff in the California Business and Transportation Treasurer/Auditor Agency and the California Department of Transportation to discuss the Jack Joseph Gateway Cities COG Orangeline High Speed Maglev Project. Coming soon after voter approval of

Executive Director the infrastructure bond measures, these meetings presented an opportunity for the Authority to submit a specific proposal and application to the two state Albert Perdon, P.E. agencies for funding support for the Orangeline High Speed Maglev project.

Supporting Agencies

Gateway Cities Council Staff prepared the attached Proposal/Application with support of ARCADIS. The of Governments Proposal/Application, which was transmitted under a cover letter from the

Southern California Chairman and hand delivered to the California Transportation Commission and Association of Governments the California Department of Transportation by the Executive Director at the City of Garden Grove

City of Huntington Beach meetings of November 21, 2006, proposes that the State provide $200 million

City of Long Beach for the completion of Phase 2 Preliminary Engineering. These funds would be

City of Stanton repaid upon the sale of construction bonds used to finance construction of the project, in effect turning the proposed grant into a loan.

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

Resolution approving Proposal/Application to California Transportation Commission February 14, 2007 Page 2 of 2

The Proposal/Application to the state is consistent with the Milestone 10 Financial Plan approved by the Board in November. The Financial Plan provided that the Authority would seek public and private funding to finance the next project development phase. The Proposal/Application is the first step in carrying out that Plan.

At the November 21st meetings with state officials, a video/slide presentation was presented describing the maglev system in Shanghai and the Authority’s Orangeline High Speed Maglev project proposed for Southern California. The presentation was well received in both meetings and staff was encouraged by the positive response to the project.

In late December, the Authority received a response to the Proposal/Application from the Department of Transportation. The letter, dated December 15, 2006, while acknowledging the benefits of the Orangeline High Speed Maglev project, states that, “Almost all the (Propostion 1B) programs have qualifications attached to them….” Furthermore, the letter states that “These requirements effectively preclude the Orangeline High Speed Maglev Corridor Development Project qualifying for infrastructure bond funds.” The letter concludes by stating that, “We look forward to continuing to work with the Authority and its partners in exploring how maglev technology fits into California’s Transportation future.”

While the positive comments in the letter are very encouraging, the Department’s response that the Authority’s project does not qualify for bond funding is discouraging, although not entirely unanticipated. Based upon follow-up conversations with Department staff, it appears the Authority’s best chance of securing bond funding is under the State-Local Partnership Program. Staff has reviewed draft Guidelines that are currently under review for this program. These draft Guidelines, if approved, would likely also preclude the Authority from competing for funding under this portion of the Infrastructure Bond Program.

More work needs to be done to secure state legislative support for the Orangeline High Speed Maglev to enable a true partnership with the state in making the project a reality. The Proposal/Application can serve as the basis for securing state participation in the project and for ensuring that the Orangeline High Speed Maglev project has a fair chance to compete for Infrastructure Bond funding.

As the preparation of the Proposal/Application was initiated after the Board’s November 8, 2006 meeting and there was no opportunity to secure Board approval prior to its submittal, staff is requesting that the Board approve the Proposal/Application at this time. Board approval will strengthen the efforts to secure state participation by demonstrating strong policy support for the funding requested.

ATTACHMENTS

1. Resolution of the Board of Directors of the Orangeline Development Authority Approving a Proposal/Application to the California Transportation Commission 2. December 15, 2006 letter to Scott A. Larsen from William D. Bronte, Chief, Division of Rail, California Department of Transportation.

Attachment 1

RESOLUTION NO. 07-02

RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGELINE DEVELOPMENT AUTHORITY APPROVING A PROPOSAL/APPLICATION TO THE CALIFORNIA TRANSPORTATION COMMISSION

WHEREAS, the Board of Directors has given careful consideration to the report regarding the Proposal/Application submitted to the California Transportation Commission presented by staff and the Authority’s development partner ARCADIS at the regular meeting of February 14, 2007;

NOW, THEREFORE, the Board of Directors of the Orangeline Development Authority does hereby resolve as follows:

SECTION 1. The Board of Directors approves the Proposal/Application to the California Transportation Commission attached hereto as Exhibit A.

SECTION 2. The Executive Director is directed to distribute the Proposal/Application to the Authority’s member agencies and to make it available for public review on the Orangeline High Speed Maglev project website.

SECTION 3. The Executive Director is directed to seek from the Authority’s member agencies and from other agencies resolutions endorsing the Proposal/Application.

The Secretary shall certify to the adoption of this Resolution.

APPROVED AND ADOPTED this 14th day of February 2007.

______SCOTT A. LARSEN, Chairman ATTEST:

______GARY MILLIMAN, Secretary

AYES: Board Members: NOES: Board Members: ABSENT: Board Members:

______GARY MILLIMAN, Secretary

Exhibit A

Proposal/Application to the California Transportation Commission

ORANGELINE DEVELOPMENT AUTHORITY

November 21, 2006 The Orangeline Development Authority is a joint powers agency Mr. John F. Barna, Jr. formed to pursue deployment of the Orangeline High Speed Executive Director Maglev system in Southern California Transportation Commission California. The Authority is composed of the following 1120 N Street, Room 2233 (MS-52) public agencies: Sacramento, California 95814 City of Artesia

City of Bell Dear Mr. Barna:

City of Bellflower

City of Cerritos The Orangeline Development Authority, supported by its development partner

City of Cudahy ARCADIS G&M, Inc., is pleased to submit this Proposal and Application to the

City of Downey California Transportation Commission for funding under provisions of the voter-

City of Huntington Park approved State Infrastructure Bond Program.

City of Los Alamitos

City of Maywood This competitive proposal is being submitted for the Orangeline High Speed Maglev

City of Palmdale Corridor Development Project. We propose building a 108-mile high speed maglev

City of Paramount system serving Los Angeles and Orange Counties. The Project includes constructing City of Santa Clarita stations in Palmdale, downtown Los Angeles, Anaheim, Irvine and 14 other City of South Gate intermediate points while promoting local and regional mobility through connectivity City of Vernon with other transportation systems. Each of the stations will be surrounded by high-

Chairman density, mixed-use development, which will provide new housing, including affordable

Scott A. Larsen housing for low-income families. Local land use plans will provide incentives that Councilmember, encourage use of the high speed maglev system and other transit options. City of Bellflower

Secretary The project also includes plans for carrying freight, such as high-value-of-time parcels Gary Milliman and express mail, as well as the potential for carrying sea-borne cargo containers City Manager, City of South Gate from the San Pedro Bay ports to an inland port in Palmdale, reducing truck traffic and

General Counsel harmful emissions while relieving congestion on over-burdened freeways.

Michael Colantuono Colantuono & Levin, PC The Orangeline High Speed Maglev is currently estimated to cost $18.7 billion to

Treasurer/Auditor construct. The Authority is seeking $200 million from the State Infrastructure Bond Program. These funds will be used to complete pre-construction engineering and to Jack Joseph Gateway Cities COG secure private financing for construction. It is anticipated that these funds will be

Executive Director repaid to the State upon successful sale of non-recourse project revenue bonds. These bonds will be issued to finance construction of the 108-mile maglev system. Albert Perdon, P.E.

Supporting Agencies Our proposal is fully described in the enclosed Proposal and Application. Gateway Cities Council of Governments We look forward to a favorable response to the Authority’s Proposal and Application. Southern California Association of Governments Please feel free to contact me or the Authority’s Executive Director, Albert Perdon, if

City of Garden Grove you have any questions or need further information.

City of Huntington Beach

City of Long Beach Sincerely,

City of Stanton

Scott A. Larsen Orangeline Development Authority Chairman

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

State Infrastructure Bond Program Proposal and Application November 21, 2006 Page 2 of 2

Copies: Office of the Governor: Billie Greer, Director, Eric L. Swedlund, Deputy Director; State Senators: George Runner (17), Richard Alarcon (20), Jack Scott (21), Gill Cedillo (22), Alan Lowenthal (27), Martha Escutia (30), Dick Ackerman (33), Joseph Dunn (34), Tom Harman (35) State Assembly Members: Sharon Runner (36), Keith Richman (38), Cindy Montanez (39), Dario Frommer (43), Jackie Goldberg (45), Fabian Nunez (46), Hector De La Torre (50), Betty Karnette (54), Rudy Bermudez (56), Ron Calderon (58), Van Tran (68), Tom Umberg (69), Tod Spitzer (71), Lynn Daucher (72) California Business, Transportation and Housing Agency: Sunne Wright Peak, Secretary; Jim Bourgart, Deputy Secretary California Department of Transportation: Will Kempton, Director; Doug Failing, District 7 Director, Cindy Quon, District 12 Director U.S. Senators: Diane Feinstein, Barbara Boxer Members of Congress: Howard McKeon (25), Brad Sherman (27), Adam Schiff (29), Xavier Becerra (31), Lucille Roybal-Allard (34), Grace Napolitano (38), Linda Sanchez (39), Ed Royce (40), Dana Rohrabacher (46), Loretta Sanchez (47), John Campbell (48) Authority Board Members Authority Members City Managers/Administrators Corridor Cities Mayors

Enclosure

Proposal and Application

Submitted to:

California Transportation Commission & California Department of Transportation

Submitted by:

Orangeline Development Authority supported by ARCADIS G&M, Inc.

A public-private partnership

November 21, 2006

Proposal

The Orangeline Development Authority & ARCADIS propose to enter into a partnership with the State of California to address a number of pressing issues. Our Proposal helps to carry- out the Governor’s comprehensive Strategic Growth Plan, ensuring Californian's an improved quality of life and continued economic growth. Our Proposal will help the Legislature realize its vision for California’s future, and help deliver the promise of improved mobility as outlined in the voter-approved infrastructure bond measures.

We propose to partner with the State in pursuing $18.7 billion in private funding to build an advanced technology transportation system with the equivalent capacity of a 108-mile, 8-lane freeway. This system is currently being planned for one of the most congested transportation corridors in the State of California. It will provide transportation to an estimated 255,000 daily commuters.

Construction of this major transportation infrastructure would be accompanied by the development of 18 major urban centers to accommodate new housing, commercial and industrial improvements, and new public spaces and amenities.

The value of this new investment in transportation infrastructure and real estate development is projected to exceed $70 billion and provide the following benefits: • 500,000 one-time annual FTE jobs • $21 billion in wages and salaries • $76 billion in total (direct and indirect) business revenue • $499 million in one-time tax and fee revenues • $10 billion in annual income for new residents and $10 billion in annual revenues earned by businesses

The Governor’s Strategic Growth Plan details the challenges facing the State of California. In 1955, a mere 51 years ago, the state's population was about 13 million. The state's population is now about 37 million. By 2025 it will be 46 million. By 2050, it could be 60 million. An estimated 6 million people are projected to be added to Southern California’s population by 2025. The infrastructure investments of a half century ago are showing their age; they are not able to support a vibrant economy and population much larger than they were originally designed to accommodate. Our highways and ports too often are choked by the volume of people and goods moving through them.

Our Proposal addresses these needs directly and is in concert with the Governor’s stated policy that taxpayers have paid for existing infrastructure and thus they should not be asked to pay for it again through fees. Rather, the beneficiaries of new infrastructure should pay the costs of the new improvements.

The Proposal will help to ensure that all available resources are brought to bear in addressing California’s infrastructure needs. This will be accomplished by offering an innovative approach to funding and delivering this major project through a public private partnership involving federal, state and local governments and the private sector.

The following Application outlines the details of our Proposal:

Orangeline Development Authority – ARCADIS Page 1 of 3 Proposal and Application Application

The Orangeline Development Authority and ARCADIS hereby apply for $200 million in State funding support available through the voter-approved State Infrastructure Bond Program. The funds will be used to advance the Orangeline High Speed Maglev Corridor Development Project.

The Authority and ARCADIS have completed a project study report, which details the description of the proposed transportation corridor improvement project. This report, funded with both public and private funds, estimates the costs, revenues and public benefits of the project, and describes the project deployment plan and financing plan. The project study consists of ten “Milestone Reports” prepared over the course of 12 months beginning in November 2005 and concluding with Milestone 10 in October 2006.

The funding that is being applied for in this Application will be used in the manner described in the Milestone 10 Report. In summary, the money will be utilized to complete pre-construction planning and engineering, a project specific EIR/EIS, a financial plan and public private partnership arrangements, and to secure necessary government permits and approvals. An $18.7 billion project revenue bond is being planned to implement the Project.

Pre-construction activities are estimated to take 3 years once funding agreements are in place and the technical work program proceeds. It is projected that the $200 million funding from the State will be included as a liability in the construction funding plan and be reimbursed to the State upon successful completion of the construction bond sale.

Upon completion of pre-construction activities and the sale of construction bonds, final design and construction and procurement of vehicles and equipment would commence. It is projected that high speed maglev service may begin as early as 2012 on an initial segment, as construction of the full 108-mile system continues to a target 2018 completion date.

The project study report is based upon prior major investment studies conducted by the Southern California Association of Governments. Approximately $10 million has been expended in assessing the options for meeting Southern California transportation needs and evaluating the potential feasibility of a privately-funded high speed maglev network. The Orangeline High Speed Maglev Corridor Development Project is an outgrowth of these initial studies. The proposed project is included as an element of the regional high speed maglev network contained in the adopted Southern California Regional Transportation Plan. The Orangeline High Speed Maglev is included in SAFETEA-LU as a “High Priority Project”.

The proposed transportation improvement project is fully described in the Milestone Reports prepared during the Phase I preliminary engineering work program and may be downloaded from the Internet at www.orangeline.calmaglev.org. A copy of the Milestone 10 report is attached and is made a part if this Proposal and Application.

Orangeline Development Authority – ARCADIS Page 2 of 3 Proposal and Application

Expenditure Plan

Year 1 Budget - $50 million Activity - Early Elimination of Key Risk Factors o Secure conditional rights-of-way agreements o Secure participation of remaining cities as members in the Authority o Secure participation of stakeholder public agencies o Develop the pubic private partnership team and capabilities o Identify potential fatal flaws; develop mitigation strategies o Secure conditional Phase 3 financing commitments o Secure conditional Pricing agreements on major system components o Develop preliminary station area specific plans o Advance Phase 2 Preliminary Engineering to 5% of total design o Initiate environmental review process – circulate draft EIR/EIS o Conduct public outreach

Year 2 Budget – $75 million Activity – Eliminate or reduce additional risk factors o Advance Phase 2 Preliminary Engineering to 10% of total design o Secure additional rights-of-way agreements o Develop financing plan/prospectus for construction financing o Secure required inter-agency agreements/permits o Secure agreements with developer team and project partners o Advance development of station area plans o Conduct public outreach o Develop final EIR/EIS; circulate for public comment

Year 3 Budget – $75 million Activity – Finalize Phase 2 Preliminary Engineering and sell construction bonds o Advance Phase 2 Preliminary Engineering to 15% of total design o Adopt the EIR/EIS and mitigation plan o Acquire rights of way (right of way protection/use permits) o Adopt station area specific plans o Finalize financing plan; issue prospectus o Sell construction bonds to finance construction o Develop and implement public private partnership agreements

Attachment

Milestone 10 – Orangeline High Speed Maglev Financial Plan, Orangeline Development Authority – ARCADIS, November 8, 2006.

Orangeline Development Authority – ARCADIS Page 3 of 3 Proposal and Application

Imagine the result

Orangeline Development Authority & ARCADIS – A Public Private Partnership

MILESTONE 10

ORANGELINE HIGH SPEED MAGLEV PROJECT

FINANCIAL PLAN

Adopted November 8, 2006

Milestone 10 – Orangeline High Speed Maglev Financial Plan

Prepared for: Orangeline Development Authority & ARCADIS – A Public Private Partnership

Prepared by: ARCADIS G&M, Inc. 630 Plaza Drive Suite 200 Highlands Ranch Colorado 80129 Tel 720 344 3500 Fax 720 344 3535

Our Ref.: CA000672.0001

Date: November 8, 2006

Information provided in this report is subject to revision in future project development phases.

This document is intended only for the use of the individual or entity for which it was prepared and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. Any dissemination, distribution, or copying of this document is strictly prohibited.

Table of Contents

1. EXECUTIVE SUMMARY 1

2. GENERAL OVERVIEW OF THE PROJECT 4

2.1 DESCRIPTION OF THE ORANGELINE DEVELOPMENT AUTHORITY 4

2.2 DESCRIPTION OF THE ARCADIS-LED TEAM 5

2.3 GOAL OF THE ORANGELINE HIGH SPEED MAGLEV CORRIDOR DEVELOPMENT PROJECT (MISSION STATEMENT) 8

2.3.1 Orangeline Corridor Development Project 8

2.3.2 Land Development Concept 8

2.3.3 Orangeline High Speed Maglev Service Concept 8

2.3.4 Create Sufficient Value for System Users to Recover Capital and Operating Costs from Project Operations 9

2.3.5 Create Value for Orangeline Cities 9

2.3.6 Provide Equitable Distribution of Economic Benefits to all Member Agencies 9

2.3.7 Provide Improved Airport Access in the Corridor 10

2.3.8 Reduce Corridor Traffic Congestion and Improve Air Quality 10

2.3.9 Provide Intra-regional Connection 10

2.3.10 Carry Freight and Container Cargo 10

2.4 DESCRIPTION OF HIGH SPEED MAGLEV TECHNOLOGY 10

2.5 COMPARISON OF ORANGELINE HIGH SPEED MAGLEV TECHNOLOGY TO CALIFORNIA HIGH SPEED TRAIN TECHNOLOGY 15

2.6 PROPOSED ORANGELINE HIGH SPEED MAGLEV ROUTE AND SERVICE CHARACTERISTICS 17

3. DESCRIPTION OF ISSUES FACING SOUTHERN CALIFORNIA 22

3.1 TRAFFIC CONGESTION 22

3.2 AIR POLLUTION 24

3.3 ENERGY EFFICIENCY 27

3.4 CONSTRAINTS ON AIRPORTS AND SHIPPING 29

3.5 LAND USE/RESIDENTIAL DENSITY 29

Table of Contents

4. DESCRIPTION OF MARKET BEING SERVED 32

4.1 CITIES AND COUNTIES 32

4.2 POPULATIONS 32

4.3 COMMUTERS 35

4.4 MAJOR ACTIVITY AND MULTI-MODAL CENTERS 36

4.5 CONNECTIONS WITH OTHER MAGLEV LINES, PUBLIC TRANSIT AND OTHER MODES 38

5. OVERVIEW OF PROJECT HISTORY, AND “STATE OF THE ORANGELINE HIGH SPEED MAGLEV” 40

5.1 INITIAL HIGH SPEED GROUND TRANSPORTATION STUDIES 40

5.2 WORK PERFORMED TO DATE 42

5.3 PREVIOUS PROJECT MILESTONES REACHED 43

5.4 PATH FORWARD 43

5.5 DESCRIPTION AND ESTIMATE OF THE COST TO COMPLETE PHASE 2 PRELIMINARY ENGINEERING & ENVIRONMENTAL REPORTING 44

6. FINANCIAL 45

6.1 SUMMARY OF RESULTS 45

6.2 SUMMARY OF CAPITAL COSTS 45

6.2.1 Construction Schedule 46

6.2.2 Construction Debt Assumptions 46

6.3 SUMMARY OF O&M COSTS 47

6.4 REVENUE ASSUMPTIONS 48

6.4.1 Ridership 48

6.4.2 Fare Assumptions 49

6.4.3 Other Revenue Sources 49

6.4.4 Total Annual Revenue 49

6.4.5 Annual Revenue Increase 49

6.5 FINANCIAL MODEL METHODOLOGY AND RESULTS 49

Table of Contents

7. INVESTMENT SUMMARY 51

7.1 BRIEF DESCRIPTION OF INVESTMENT OPPORTUNITIES 51

7.1.1 Phase II Funding 51

7.1.2 Phase III Funding 52

7.1.3 Brief Description of the Risks 52

7.2 RISK MANAGEMENT PLAN 52

7.2.1 Risk Elements 52

iii Milestone 10 — Orangeline Maglev Financial Plan

1. EXECUTIVE SUMMARY

This Milestone Report presents the Financial Plan for implementing the Orangeline High Speed Maglev project. It is the last in a series of ten milestone reports completed by ARCADIS and the Orangeline Development Authority in conjunction with Phase 1 Preliminary Engineering of the Orangeline Corridor Development Project.

Based upon the work to date and the assumptions made by the project team, it is projected that the Orangeline High Speed Maglev can be built and operated primarily as a privately-funded project. Current analysis indicates that the project will be able to pay off all debt associated with construction and operation by the year 2044, or about 32 years after service operation begins. This is solely based upon the revenue that the system is projected to generate. The financial model forecasts that the project has the potential of producing an operating surplus of roughly $30 billion by the year 2050, assuming no additional capital improvements are required after initial construction and based upon the following key factors.

Key factors unique to the Orangeline High Speed Maglev that enable the system to be privately funded:

Location: The project is located in a corridor with a population of almost 4 million people and with some of the most densely populated communities in the nation, such as Maywood, with a population density of 25,000 people per square mile.

Economic: The cost to ride the Maglev is less than the cost of owning and driving an automobile, particularly when taking into account the value of time saved and comparable user subsidies.

Safety: The system virtually guarantees the absence of accidents or fatalities by its design as a totally grade-separated, elevated monorail and by its computer control of all operations.

Speed: At average speeds of 70-90 mph, the Orangeline High Speed Maglev outperforms even auto traffic on congested freeways, which during peak periods today operate at 30-40 mph, and likely at 20-25 mph in future years.

Comfort: The ability to ride stress free and make use of travel time to sleep, read a paper, do some work, walk around, or enjoy the view without having to worry about accidents provides an unparalleled degree of comfort and security.

Convenience: With 5-minute peak period service and stations spaced at frequent intervals, access to the system is quick and easy, and station-area development is planned so that a large portion of riders are able to walk to the stations or use frequent shuttle service from satellite

Milestone 10 — Orangeline Maglev Financial Plan

stations. Station-area cars, inter-connectivity with other transit services and direct airport access is also planned.

Reliability: A high degree of service reliability is built into the design, ensuring that the system will be there at all times when needed, in accordance with the schedule. (Shanghai Maglev operates at 99.9% reliability).

Freight: The system provides significant cost savings potential for freight movement along the corridor, resulting in a revenue source that will help to cover both capital and operating costs.

One of the most compelling factors that make the Orangeline High Speed Maglev economically viable is the tremendous growth that will occur in the region over the next 25-50 years. An additional 6 million people will be living in Southern California by 2030. There are inadequate public or private funds available to meet the growing travel needs using past solutions that rely almost exclusively on auto/highway expansion. Regional plans identify a large unmet need, even if funding from pending ballot measures is approved.

Another compelling factor is the significant challenge to increasing freeway capacity in both Los Angeles and Orange Counties, because many of the freeway improvement projects completed over the past 15 years have left little existing freeway right-of-way for further expansion. Future freeway expansion, costing up to $250 million per freeway mile, would require extensive right-of-way, be expensive, and create community opposition.

Air pollution concerns are also compelling public agencies to look at alternatives to freeway expansion. The Orangeline High Speed Maglev is an essential element of regional air quality plans, which rely on the project to meet state and federal air quality standards. Interest in improving air quality beyond minimum standards is growing. The California Senate Transportation and Housing Committee heard from a number of local officials at a hearing on October 18, 2006, demanding that projects to be funded from the November 2006 ballot measure must demonstrate a reduction in pollution, not merely mitigation strategies to reduce projected increases in pollution. The Orangeline Maglev would eliminate over 6,000 tons of air pollution per year.

The Orangeline High Speed Maglev is being pursued as part of a corridor development project that envisions higher density, mixed-use developments that include new housing, commercial, retail, entertainment, education, public space and other improvements within walking-distance of the stations. The Authority’s member cities are reviewing their general land use plans, zoning codes and development policies to identify changes in land use regulations that will support the Orangeline High Speed Maglev and enable the system to create maximum benefit for the cities, and for project investors.

The projections that indicate the system is financially viable are for a system extending 108 miles from Palmdale to Irvine and including 18 stations. However, the system will most likely begin operation of an

Milestone 10 — Orangeline Maglev Financial Plan

initial segment while construction continues on remaining portions of the line. The Orangeline Development Authority and the ARCADIS-led team will endeavor, in the next phase, to determine the project sequencing that offers the highest value to investors and to the Authority’s member cities. Absent that information, the financial model used for current projections is predicated on the assumption that the entire system will be built and opened for commercial operation at one time.

The Milestone 10 report has been prepared by ARCADIS and the Orangeline Development Authority. Authority staff prepared the report sections describing the general project overview, issues, markets to be served, and project history. Cost, ridership, and revenue estimates were generated by the ARCADIS-led team, including AZTEC Engineering, Transrapid International, and Meyer Mohaddes Associates. This analysis includes the projected capital costs, operations and maintenance costs, financing costs, and revenue generation.

Milestone 10 — Orangeline Maglev Financial Plan

2. GENERAL OVERVIEW OF THE PROJECT

2.1 DESCRIPTION OF THE ORANGELINE DEVELOPMENT AUTHORITY

The Orangeline Development Authority is a public entity composed of local government agencies, operating separately and independently from its member agencies, under provisions of the Joint Exercise of Powers Act of the State of California, California Government Code Sections 6500-6599.2. The Authority’s member agencies (Members) are those listed in Table 1 who have signed the First Amended Joint Powers Agreement (Agreement). Agencies listed but that have not yet signed the Agreement are prospective Members. The Authority is actively seeking participation of these agencies as active Members, along with any local governmental or county agencies within the Authority’s “Sphere of Influence.”

As indicated in the Agreement, the purpose of the Authority is to pursue its stated objective to use the common powers of its Members to enter into one or more public-private partnerships to finance, acquire, design, construct, reconstruct, improve, and operate the facilities and improvements to the Orangeline as may be approved by action of the Authority.

The Agreement defines “Orangeline,” herein after identified as the “Orangeline High Speed Maglev,” to mean a high-speed ground transportation service that is provided by an advanced technology, elevated, magnetically levitated (“Maglev”) ground transportation system for moving people and cargo, and comprised of passenger and cargo vehicles, elevated guideways and support columns, power distribution system, vehicle control system, stations, maintenance and operation center, and related facilities.

“Orangeline Project” is defined in the Agreement as the activities required to plan, put in place, and maintain and maximize the benefits of the Orangeline High Speed Maglev.

The Authority is governed by a Board of Directors composed of mayors and city council members who serve as delegates from each Member agency. Regular Board meetings are held the second Wednesday of each month. Day-to-day activities are managed under a professional services contract by the firm of Albert Perdon & Associates, Inc. The firm’s principle serves as the Authority’s Executive Director. The Authority’s activities are posted on the Internet at www.orangeline.calmaglev.org.

The Authority has entered into a public-private partnership agreement with ARCADIS, who, along with a team of local and international firms, serves as the Authority’s development partner. Under the agreement, the role of the ARCADIS-led team is to assist with the “financing, acquisition, design, construction, and operation of the facilities and improvements to the Orangeline High Speed Maglev as may be approved by action of the Authority.”

Milestone 10 — Orangeline Maglev Financial Plan

Table 1: Orangeline Development Authority, Member Agencies* and Prospective Member Agencies

(1) City of Los Angeles (16) City of Buena Park

(2) City of Vernon* (17) City of La Palma

(3) City of Huntington Park* (18) City of San Fernando

(4) City of Maywood* (19) City of Burbank

(5) City of Bell* (20) City of Glendale

(6) City of Cudahy* (21) City of Tustin

(7) City of South Gate* (22) City of Irvine

(8) City of Downey* (23) County of Los Angeles

(9) City of Paramount* (24) City of Palmdale*

(10) City of Bellflower* (25) City of Los Alamitos*

(11) City of Cerritos* (26) City of Lancaster

(12) City of Artesia* (27) City of Santa Clarita*

(13) City of Cypress (28) City of Garden Grove

(14) City of Stanton (29) City of Anaheim

(15) City of Huntington Beach (30) City of Santa Ana

2.2 DESCRIPTION OF THE ARCADIS-LED TEAM

The Phase 1 ARCADIS led team is depicted below in the organization chart and in the table which lists each participating firms. Additional team members may be added as deemed necessary for Phase 2. The Phase 2 ARCADIS team members from Phase 1 to be included in Phase 2 are subject to an evaluation of services performed for Phase 1 and negotiations.

It is anticipated that, upon successful completion of Phase 1, the AUTHORITY and ARCADIS would initiate Phase 2 work subject to one or more amendments to this AGREEMENT specific to that Phase. The Parties agree to negotiate Subsequent Amendments in good faith recognizing that ARCADIS should not be denied the opportunity to participate in further Phases unless it fails to adequately perform its responsibilities in Phase I or the law otherwise requires.

Milestone 10 — Orangeline Maglev Financial Plan

As the project proceeds through each phase, the project scope may be adjusted, the membership of the Authority may expand, the ARCADIS team may grow and adjust to new requirements of the project and the roles and responsibilities of the partners will evolve to carry out the project in a timely and effective manner.

Figure 1: Phase 1 ARCADIS Team Organizational Chart

Team Public-Private Partnership Director of OLDA Project Executive

Al Perdon Chuck Leichner Program Manager

Bob Stevens Technical Director

Bob Stevens

Project Manager AZTEC Charlene Palmer Huitt-Zollars PA CO

Financing PPP Preliminary Engineering Development Advocacy

Jack Moriniere Jack Moriniere Frank Sherkow Sandy Shapery Mary McCormick Finance Manager PPP Manager Engineering Manager Development Manager Advocacy Manager

AZTEC Shapery CBRE AZTEC ARCADIS Shapery Feh r & Peer s CBRE MMA CBRE Hensel Phelps Gru en Fehr & Peers Huitt-Zollars Fehr & Peers CBRE IABG Hensel Phelps AZTEC MACTEC Huitt-Zollars Max Boegl MBI Media Huitt-Zollars MBI Media MMA PA CO Sh a p e r y TRI VLG Engineering

Milestone 10 — Orangeline Maglev Financial Plan

Table 2: Phase 1 Members of the ARCADIS-led team for the Orangeline High Speed Maglev Project. Orangeline High Speed Maglev ARCADIS Team Members

Company Name Contact Phone Address 1400 North Harbor Blvd., Suite 700 ARCADIS G&M, Inc. Charlene Palmer 714.276.0992 Fullerton, CA 92835 1181 California Ave., Suite 202 AZTEC Engineering Frank Sherkow 951.279.4070 Corona, CA 92881 300 South Grand Ave., 15th Floor Brown, Winfield & Cantoneri Ken Brown 231.697.2100 Los Angeles, CA 90071-3125 335 South Grand Ave., Suite 2700 CBRE Lew Home 213.613.3305 Los Angeles, CA 90071 6330 San Vicente Blvd., Suite 200 Gruen Associates Elaine Carbrey 323.937.4270 Los Angeles. CA 90049 18850 Von Karman Ave., Suite 100 Hensel Phelps Construction Co. Wayne Lindholm 949.852.0111 Irvine, CA 92612 HNTB Corp. 200 E. Sandpointe, Suite 200 Linda Bohlinger 714.460.1624 HNTB Management Consulting Santa Ana, CA 92707 Einsteinstrasse 20 IABG Jorg Metzner 49 89 6088 0 85521 Ottobrunn, Germany 1111 Betteravia Road Lockheed Martin Jim Vint 805.348.2397 Santa Maria, CA 93456 200 Citadel Drive, 2nd Floor Mactec, Inc. Perry Maljian 323.889.5341 Los Angeles, CA 90040 4450 Thoroughbred Drive Max Boegl USA, Inc. Ludwig Schoell 770.993.0379 Roswell, GA 30075-3156 3333 South Brea Canyon Road MBI Media Mary McCormick 909.444.1822 Diamond Bar, CA 91765 707 Wilshire Blvd., Suite 4610 Meyer, Mohaddes Associates Michael Meyer 213.488.0345 Los Angeles, CA 90017-3610 5001 SW 74th Court, Suite 203 PACO Group John Canepari 305.666.3456 Miami, FL 33155 15707 Rockfield Blvd., Suite 155 Fehr & Peers Steven Brown 949.859.3209 Irvine, CA 92619 402 West Broadway, Suite 1220 Shapery Enterprises Sandy Shapery 619.239.4700 San Diego, CA 92101 400 Seventh Street NW, 4th Floor Transrapid International-USA Reed Tanger 202.969.1508 Washington, D.C. 20004 23412 Moulton Parkway, Suite 240 VLG Engineering Vicki Gray 949.455.1559 Laguna Hills, CA 92653 1000 Wilshire Blvd. Wedbush Morgan Doug Charchenko 213.698.8061 Los Angeles, CA 90017 707 Wilshire Blvd., Suite 5700 AON Consulting John Evans 213.630.2900 Los Angeles, CA 90017

Milestone 10 — Orangeline Maglev Financial Plan

2.3 GOAL OF THE ORANGELINE HIGH SPEED MAGLEV CORRIDOR DEVELOPMENT PROJECT (MISSION STATEMENT)

The current project development phase consists of preliminary engineering and financial planning, identified as “Phase 1 Preliminary Engineering.” This phase is intended to provide the basis for securing public and private funding for more detailed engineering, environmental reviews and financial planning to support the sale of project construction bonds that will be used to finance the building of the 108-mile Orangeline High Speed Maglev system.

The Project purpose and concept, which also serve as the Authority’s mission statement, are described as follows:

2.3.1 Orangeline Corridor Development Project

The Project purpose is to support economic growth and improved mobility objectives of the Authority’s member agencies, and to create a positive financial return on project investments. The Project concept is to create new housing and other needed development in designated growth centers and to deploy the Orangeline High Speed Maglev along a 108-mile corridor from Palmdale in North Los Angeles County to Irvine in South Orange County. The Project scope will expand as additional cities join the Authority.

2.3.2 Land Development Concept

Orangeline High Speed Maglev Cities (“Orangeline Cities”) are experiencing a range of growth and development patterns. Some cities are built out and anticipate focusing their development on building up to accommodate growing population and employment. Other cities are at an earlier stage of development and are building out, with an eye toward areas to be developed at higher densities in the future. Orangeline Cities view the Orangeline Maglev as a means to support their development goals. This includes higher- density land use in some areas served more predominantly by the Orangeline Maglev and other public transportation services, while preserving lower density residential developments in other parts of the city.

2.3.3 Orangeline High Speed Maglev Service Concept

The Orangeline Maglev is being planned as a high-speed, high-quality transportation service that is competitive with the automobile. Average speeds along the 108-mile proposed corridor are estimated to be between 70 and 90 mph. Top speeds will range between 150 and 200 miles per hour depending on location and time of day. The service will be priced to enable capital and operating costs to be funded from project revenues, with government support confined primarily to project planning, right-of-way contributions, and construction financing/credit enhancements. It has been proposed that the ARCADIS-led team may build and operate the Orangeline Maglev and support Orangeline Cities in station area development.

Milestone 10 — Orangeline Maglev Financial Plan

On December 14, 2005, the Orangeline Development Authority Board of Directors adopted Orangeline Maglev System Concepts and Criteria. The Board’s action, endorsed by ARCADIS, establishes the primary functional roles for the Orangeline High Speed Maglev system. These functional roles formed the key criteria for selection of Orangeline Maglev station locations:

2.3.4 Create Sufficient Value for System Users to Recover Capital and Operating Costs from Project Operations

The key role of the Orangeline High Speed Maglev system is to provide a high quality transportation service that will attract sufficient users and operating revenues to cover development and operating costs. The system must be competitive with alternative travel options and not rely on government grants to subsidize construction or operating costs. Government support in providing public rights-of-way is assumed and credit enhancements, including loans and loan guarantees, are anticipated as possible strategies for reducing financing costs. Government grants to help carry out initial planning work is also anticipated.

2.3.5 Create Value for Orangeline Cities

This role is aimed at providing high quality access and mobility within the corridor that is competitive with the automobile and that enables Orangeline Cities to achieve their General Plan and land use goals for housing, retail and commercial development and enhanced economic and environmental conditions. The value provided by the Orangeline High Speed Maglev would be exhibited in higher property values and prosperity for residents of Orangeline Cities. The system would stimulate economic development, which would in turn generate increased revenues for member cities. A key role of the Orangeline High Speed Maglev is to protect designated residential areas from intrusive development by focusing future housing, commercial, retail and similar development around Orangeline Maglev stations and along feeder routes served by high- quality public transit services.

2.3.6 Provide Equitable Distribution of Economic Benefits to all Member Agencies

The Authority’s member agencies are all striving to create a quality living environment for their residents and to ensure economically strong and vibrant communities. Due to various reasons, including state and federal policies, prior decisions, geography, development patterns and market forces, some member agencies are in a better position to achieve their goals than are others. An underlying principle of the Orangeline Corridor Development Project is that all member agencies are to be kept “whole” in terms of benefits to be derived from the Project. This means that the benefits derived from the Project will be distributed equitably among all the member agencies, enabling all member agencies to come closer to achieving their goals.

Milestone 10 — Orangeline Maglev Financial Plan

2.3.7 Provide Improved Airport Access in the Corridor

Under this role, the Orangeline High Speed Maglev system would provide quick access to Palmdale Airport. The intent of this connection is to provide a more attractive alternative to LAX and Burbank airports, thereby enabling residents of Orangeline Maglev Cities to avoid ground and air congestion at these airports. Air travel ticketing and baggage check-in would be accommodated at designated Orangeline Maglev stations.

2.3.8 Reduce Corridor Traffic Congestion and Improve Air Quality

This role is aimed at reducing freeway and surface street traffic congestion in the corridor. The Orangeline High Speed Maglev would provide high-speed access between population and employment centers. Commuters would access the system by walking to and from housing and job locations, and other destinations within close proximity to Orangeline Maglev stations. Local public transit, bicycle, shared-ride, station cars and taxi modes would be favored for access to Orangeline Maglev stations. Auto access would be accommodated but station-area parking would be priced to reflect its true cost. Strategies would be employed by cities to reduce demand for auto usage and parking. Station areas would be planned to be pedestrian-friendly and serve as community activity centers.

2.3.9 Provide Intra-regional Connection

This is a role that addresses the opportunity to serve a market for high-speed travel to places beyond the boundaries of the corridor. Convenient connections would be provided to Metrolink, AMTRAK, and regional public transit services to enable convenient travel to destinations outside the corridor. This role helps to fulfill the mission of the Orangeline High Speed Maglev to improve transportation in the region.

2.3.10 Freight and Container Cargo

The maglev system can be designed to carry freight containers. Containers could be loaded onto maglev vehicles concurrent with passenger boarding. The system would also be designed to serve or accommodate the movement of cargo containers from seaports to an inland port in Palmdale, if it is determined that the market could support such a system.

2.4 DESCRIPTION OF HIGH SPEED MAGLEV TECHNOLOGY

The concept for the Orangeline High Speed Maglev is a system operating on a totally grade-separated monorail-type guideway, designed primarily as an elevated structure located approximately 20 feet above the surface and along existing freeway, railroad, and other public rights-of-way.

This technology has two distinct characteristics that make it different from all other ground transportation systems. It enables vehicles to travel at top speeds in excess of 300 miles per hour. It has a very high

Milestone 10 — Orangeline Maglev Financial Plan

acceleration/deceleration rate that enables vehicles to go from zero to 185 miles per hour in less than three miles and under two minutes. Conventional high speed rail operating on steel tracks requires about 12 miles to reach this speed and has a practical upper operating speed of about 185 miles per hour.

Station spacing has a significant impact on average operating speeds. Table 3 illustrates the performance capabilities of TRI high speed maglev. Average speeds are also influenced by alignment profiles and geometrics. It is anticipated that the Orangeline High Speed Maglev will operate at average speeds of 70- 90 mph and at top speeds of 150-200 mph.

Table 3: Average and Top TRI Maglev Operating Speeds as a Function of Station Spacing Station Spacing Top Speed1 Average Speed1 (miles) (mph) (mph) 3 150 75

6 210 110 12 270 150 24 300 195

1 – Top Speed capability of TRI Maglev is about 300 mph. It is anticipated that the Orangeline will likely operate at top speeds of 200 mph or less in dense urban areas.

Station access time is a critical component of overall travel time. Greater station spacing requires more travelers who want to use the maglev system to travel longer distances to access a station, using other modes (Metrolink, bus, light rail, bike, auto, etc.) to reach the Orangeline Maglev station. Closer station spacing could provide faster travel for more passengers, while reducing average mainline speeds somewhat. The introduction of local and express service options could offer the optimum quality service for both short and long distance travelers.

Milestone 10 — Orangeline Maglev Financial Plan

The general parameters for the guideway and supporting structure design are shown in Figure 2 – Orangeline High Speed Maglev Operating Envelope.

Figure 2: Orangeline High Speed Maglev Operating Envelope

TheMin. minimum of 14’ to column diameter is 16’ diameter, 7 feet. The diameterdependent increases on The clearance criterion The clearance criterion dependingloads height on for theThe guidewayclearance criteria above forThe the clearance guideway criteria above height, profile and highways/roadwaysMin.for the guideway of 19 above ‘ is a railroadsforMin. the guideway of is a27 minimum above ‘ minimumhighways/ of 19roadways feet. is ofrailroads 27 feet. is a minimum loads. overii f 19 f t overf 27 f t

Table 4 provides a summary of TRI-08 maglev system features. This is the most current version of the TRI maglev technology and is currently operating in Shanghai, China. Transrapid is developing technology improvements that may result in better operating performance and reduced costs. Results of current technology development work will be incorporated into future planning during Phase 2 and beyond.

The Orangeline Maglev would operate as an automated system, meaning that all operating features are computer-controlled with human operating oversight provided at a central control facility.

Milestone 10 — Orangeline Maglev Financial Plan

The first commercial maglev system in operation is in Shanghai, China. The Shanghai Maglev uses TRI maglev technology similar to that proposed for the Orangeline High Speed Maglev. The system was constructed and put into operation in three years.

Table 4: System Technology Features System Technology Description Vehicle Vehicle versions for intercity, suburban/airport connector and cargo/freight transport. Non-contact, electromagnetic levitation and guidance; attractive principle with 10 mm air gap (nominal). Propulsion Synchronous long stator linear motor; motor mounted on underside of guideway. Energy Supply Electric supply from public network (i.e. 138 kV, 50/60 Hz). Operation Control System Fully automatic Command, Communication, and Control System; Digital Radio Transmission; Driver and on-board personnel optional. Guideway At-grade or elevated guideway; high-precision guideway beams made of steel, concrete or hybrid materials; mounted on standard guideway substructures made of reinforced concrete or on railroad-style bridges or in tunnels. Stations Airport-style stations with at-grade, elevated, or underground platforms and guideway; secure platforms featuring platform doors and controlled access. Operation & Maintenance Facilities Central and decentralized operations & maintenance (O&M) facilities for daily and periodic scheduled and unscheduled maintenance. Qualities High-speed, high performance, high capacity passenger and cargo/freight transportation system. Features Low noise and energy consumption; low environmental impact; low - medium space requirements; flexible alignment and operating characteristics; minimal maintenance and personal requirements result in low operating costs; investment costs comparable to high-speed rail systems; safest mass transportation system available.

In addition to its passenger-carrying capacities, the Transrapid Maglev System is also capable of high- speed transport of express freight and/or cargo. Cargo facilities and operations can be designed in coordination with passenger services of a particular Transrapid application to maximize system revenue. Such service provides an opportunity to transport time-sensitive freight between airports and city centers independent of congestion on existing highways, allowing for immediate loading and distribution.

Milestone 10 — Orangeline Maglev Financial Plan

Cargo sections can be designed to handle standard aircraft shipping containers or pallets and are capable of transporting high priority or express goods at the same speeds as passenger trains. Cargo sections may be assembled to form dedicated cargo vehicles or added to passenger vehicles to carry baggage or additional goods according to the operator’s requirements. As desired by a particular operator, cargo service can be implemented at any time on an existing route.

Cargo vehicle sections may accommodate a 30-percent higher payload than passenger vehicles, since most of the typical interior fittings are not needed. This results in a capacity of up to 17.5 metric tons (19.3 U.S. tons) per section.

Similar to passenger vehicles, cargo-configured vehicles can be two to eight sections in length, with no reduction in operating speeds. In cases where additional capacity per vehicle is desired, ten-section vehicles can be used with a maximum speed restriction of 400 km/h (249 mph), and up to 20 sections may be used if the maximum speed is limited to 200 km/h (125 mph).

Regardless of the vehicle length, operations can be conducted as often as every five minutes to achieve desired per hour capacities. In cases where cargo service shares a guideway with passenger operations, scheduling during off-peak hours is recommended. In addition, designing loading/off-loading cargo facilities ‘off-line’ may avoid disruption to mainline operations.

For projects where more capacity is needed beyond what can be provided by the standard design discussed above, a special freight version of the system has been envisioned and can be developed. Freight service must be designed into the original project as both the guideway and the vehicles must be adapted for the heavier payloads. The designs will therefore be project-specific, where the design and development costs need to be included in the overall project costs. Since the resulting design would constitute a new version of the Transrapid system, both the vehicles and the guideway may differ in their overall dimensions

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from the current passenger versions. However, the general vehicle and guideway cross-sections would be retained. There is no fixed design for the vehicle sections which would be designed to suit the specific application.

Special-design container freight vehicles may transport up to 33 U.S. tons per section. Freight vehicles have a maximum speed of 125 mph and passenger and freight sections would typically not be mixed within a vehicle.

Freight vehicles could utilize shipping pallets, standard seaborne containers, tractor trailer containers, and/or customer-specific containers. The vehicle could be enclosed or open as desired, since at the lower speeds, aerodynamic effects would not be as significant.

2.5 COMPARISON OF ORANGELINE HIGH SPEED MAGLEV TECHNOLOGY TO CALIFORNIA HIGH SPEED TRAIN TECHNOLOGY

The Orangeline High Speed Maglev will differ in many respects from conventional High Speed Train technology adopted for the state-wide project that is currently being undertaken. This involves building a high speed train from Sacramento and the Bay Area to San Diego. That project is planning to use Japanese “Bullet Train” and European inter-city, steel wheel-on-steel rail technology.

• The California High Speed Train is proposed to serve primarily longer-distance inter-city travelers between northern and southern California.

• The Orangeline High Speed Maglev would serve primarily shorter-distance intra-regional commuter, airport access and other non-work trips within Los Angeles and Orange Counties.

Table 5 lists and compares the general characteristics of each system.

Table 5: Characteristics of California High Speed Rail and Orangeline High Speed Maglev General Project Characteristics California High Speed Rail* Orangeline High Speed Maglev

Description Sacramento to San Diego Palmdale to Irvine 703 miles – 33 stations 108 miles 7 stations 18 stations (Palmdale to Irvine) Service Limited Hours Longer Hours Less Frequent Service More Frequent Service Operating Hours 6:00 a.m. – 8:00 p.m. 5:00 a.m. – 1:00 a.m. Frequency 10 min. – 30 min. 5 min. – 10 min.

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General Project Characteristics California High Speed Rail* Orangeline High Speed Maglev

Station Spacing 50 miles (rural) More Accessible 15 miles (urban) 6 miles (average) Additional or more closely spaced More closely spaced stations stations would negatively impact increases system accessibility to travel times and the ability to potential passengers with little operate both express and local impact on travel times; maximizing services. ridership and revenues.

Technology Steel-wheel-on-steel-track Magnetic levitation High Speed Rail has achieved speeds of 200 mph but is not operated at this speed due to economic reasons. The Shanghai Maglev has achieved a top speed of 315 mph but operate at a top speed of 267 mph because the current line is too short. Current Top Operating Speeds of Fast Much Faster Proposed Technology 185 mph (rural) 267 mph (rural) 60 mph (urban) 155 (urban) Acceleration Moderate Acceleration Much Quicker From 0 to 185 mph 6 min – 13.0 miles 1.5 min – 2.6 miles Noise Loud Half as Loud at 155 mph 88 db(A) 75 db(A) at 125 mph 84 db(A) 72 db(A) 10 db(A) reduction = 1/2 noise level

Climbing Ability 4% grade 10% grade (higher grade = less tunneling) Energy (at 185 mph) Energy Efficient More Energy Efficient 58 Wh/Pkm 44 Wh/Pkm Safety Safe Safer (Vehicle rides on rails – can derail) (Vehicle wraps around elevated guideway) Ridership (Prelim. Estimates) 42-68 million/yr 56-65 million/yr Cost $37+ Billion $20 Billion Funding Source State and Federal Taxes System Revenues Plus System Revenues Public Rights of Way *Source: CHSRA website

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2.6 PROPOSED ORANGELINE HIGH SPEED MAGLEV ROUTE AND SERVICE CHARACTERISTICS

Table 6 lists the locations identified as possible Orangeline High Speed Maglev stations in Phase 1 Engineering. Further study and possible modification of station locations will be done in Phase 2. Two types of Orangeline Maglev stations are identified. Mainline stations are those that are located directly on the alignment and provide direct access to vehicles from station platforms. Shuttle stations are those that are located off the Maglev guideway alignment, as much as several miles away from the alignment, and which serve as satellite stations connected to the mainline with local shuttle services. Stations identified in italics are being considered as local-service stations, while the others are being considered for both local and express services.

Table 6: Orangeline High Speed Maglev Station Locations City Orangeline High Speed Orangeline High Speed Maglev Mainline Station Maglev Shuttle Station Palmdale Palmdale Airport Sierra Hwy at UPRR (Metrolink Station) Santa Clarita McBean/Valencia SR-14/San Fernando Road San Fernando San Fernando Road/UPRR/Workman Burbank Olive/North Hollywood Way Burbank Airport (N. Hollywood Way/Thornton) Olive/UPRR (AMTRAK/Metrolink Station) Glendale Broadway/Brand San Fernando/Colorado Los Angeles Union Station (numerous connecting modes) Vernon Santa Fe/Vernon Salt Lake/Gage Huntington Park Pacific/Gage Maywood Atlantic/Slauson Alamo/Slauson Bell Florence/Atlantic South Gate Firestone/California Atlantic/UPRR/Salt Lake Cudahy Clark/Atlantic Downey Firestone/Paramount UPRR/I-105 Fwy/Greenline Station Paramount Rosecrans/Paramount Bellflower Bellflower/Alondra Cerritos Towne Center - P.E. Railway west of Gridley Bloomfield/183rd Artesia P.E. Railway west of Pioneer La Palma Orangethorpe/Valley View Lincoln/Valley View Cypress Buena Park La Palma/SR-39 Los Alamitos Katella/Race Track Stanton S3-39/Garden Grove Blvd SR-39/P.E. Railway/north of Katella Anaheim Harbor and Katella Anaheim Stadium (ARTIC Station) Garden Grove Harbor Blvd./P.E. Railway Santa Ana Flower St/Santa Ana Blvd. Santa Ana AMTRAK/Metrolink Station

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Tustin Tustin AMTRAK/Metrolink Station Irvine John Wayne Airport Irvine Transportation Center (AMTRAK/Metrolink Station) Alton Pkwy/Irvine Center Drive

Figure 3 shows the Orangeline High Speed Maglev alignment. The 108-mile route from Palmdale to Irvine generally follows the SR-14 freeway alignment from Palmdale to the junction of the SR-14 and I-5 Freeways in Newhall/Sylmar. From there, the proposed route follows the Metrolink railroad alignment to Downtown Union Station, continuing south on a railroad alignment to Paramount. The route continues down the former Pacific Electric Red Car commuter railroad alignment to Santa Ana. In Santa Ana, the route follows the AMTRAK/Metrolink railroad alignment to the Irvine Transportation Center. An optional alignment would travel easterly from Stanton to the Anaheim Metrolink/AMTRAK station and continue south along the railroad alignment.

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Figure 3: Orangeline High Speed Maglev Alignment

Palmdale Airport

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Orangeline High Speed Maglev service is being planned to far exceed the transport performance characteristics of any other mode of ground transportation currently available or foreseen in the future. The key characteristics that set this service apart from other mass transportation services or even from the automobile are as follows:

• Speed – 70-90 mph average (including station stops) vs. 20-30 mph freeway speeds

• Service frequency – every 5 minutes peak period; every 10 minutes off-peak

• Safety – avoidance of accidents associated with freeway driving

• Comfort – stress-free commuting in a spacious, air-conditioned passenger vehicle

• Reliability – the Shanghai Maglev provides 99.9 percent schedule reliability

• Cost – cost competitive with auto travel

Initial service assumptions used during the modeling work undertaken to project ridership are shown in Table 7. Service characteristics will be given additional consideration during Phase 2 Preliminary Engineering.

Table 7: Summary of Orangeline Maglev Modeling Assumptions (Subject to further refinement in subsequent project phases)

Operations Express Service Local Service Number of Stations Orangeline Maglev 12-13 18-19 Orangeline Maglev Shuttle 21 21 End to End Travel Time (minutes) 48 58 Miles Traveled 103 103 Average Speed Capability (mph) 150 115 Average Scheduled Speed (mph) 129 106 Maximum Operating Speed (mph) 200 200 Assumed Average Hwy Speed 30 30 Headway (minutes) 20 5 Evening (9 pm – 1 am) (minutes) - 10 Normal Operating Hours 7 am – 9 pm 5 am – 1 am Operating Constraints (Evening 9 pm – 1 am 9 pm – 1 am Operations) Average Scheduled Speed (mph) - 75 Maximum Operating Speed (mph) - 150 Assumed Average Hwy Speed 50 50 Headway (minutes) - 10

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Operations Express Service Local Service Operational Capacity (seated passengers) Vehicle (up to 6-section vehicle) 688 688 System (peak point, 1 direction, ph) 2064 6192 Potential Capacity (seated passengers) Vehicle (up to 10-section vehicle) 1192 1192 System (peak point, 1 direction, ph) 3576 9728 Fares (no transfers) Boarding Charge $5.00 $5.00 Mileage Charge $0.13 $0.10 Peak Surcharge (6-9 am & 4-7 pm) +25% +25% Average User Subsidies (by others) 10% 20% Parking Charge (average per day) $5 $5 Feeder Services Headway (minutes) 5 am – 9 pm 20 5 9 pm – 1 am - 10

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3. DESCRIPTION OF ISSUES FACING SOUTHERN CALIFORNIA

3.1 TRAFFIC CONGESTION

Southern California’s population has more than doubled since 1960. Over the same time span, the region’s highway capacity has increased by less than 30%. In addition to another six million people trying to get on congested freeways by 2030, a 300% increase in container cargo traffic will be struggling to find space to move about the region.

The Southern California Regional Transportation Plan projects a $93 billion funding gap through 2030, with almost all committed funds going to maintaining the existing system. Proposition 1B on the November 2006 ballot, if approved, would provide only $8 billion for capital and operational improvement projects; conventionally funded projects would provide commuters limited alternatives to congested roadways. If approved, a proposed subway extension to the coast alone would require public funding equal to half of the $8 billion.

Governor Schwarzenegger acknowledges that even with the bond measure programs implemented as part of a $107 billion transportation investment plan for California, daily hours of delay in 2016 will increase commute time by 454,000 hours, or over 150 million hours a year.

“Traffic congestion is choking our cities, hurting our economy, and reducing our quality of life. Rush-hour delays rob us of time with our families, and commute times often dictate where we live and work. The impact our inadequate transportation network has on the economy is alarming. We waste an estimated $63 billion annually in time and fuel while sitting in traffic. Moreover, businesses and their customers bear enormous costs associated with traffic-related logistics problems, delivery delays, poor transportation reliability, and fewer potential employees within commuting distance.”

These are the conclusions of a Reason Foundation assessment of traffic congestion issues facing Southern California and the rest of the nation – opinions shared by many local government officials, business people and citizens alike. Public opinion surveys repeatedly show that traffic congestion is one of the top concerns of this regions’ residents and business owners.

As the Reason Foundation study points out, severe traffic congestion is pervasive in large and densely- populated regions such as Southern California, and is worsening throughout California and the United States. “To relieve severe congestion by providing additional capacity, an additional 104,000 lane-miles of capacity (about 6.2 percent of current lane-miles) would be needed, costing about $533 billion over 25 years, in 2005 dollars. If moderate congestion and rural congestion are also to be addressed, an additional $304 billion will be needed.”

The study authors make clear that “the benefits of an investment in additional capacity would be substantial” in addressing the shortcomings of heavily congested roadways; these shortcomings include:

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• Increased travel time

• Rougher traffic flow

• Increased accidents

• Reduced air quality

• Higher fuel use and operating costs

• Less reliable travel

• Higher logistical costs for manufacturing and delivery

• Fewer choices of jobs for workers and businesses

• Narrower choices for consumers

While statistics from various studies confirm that traffic congestion is becoming more severe in Southern California, “the most congested region in the nation,” the situation is at a crisis level and getting worse. The statistics don’t reveal the impact of traffic congestion on the quality of life in the region. The human story of severe traffic congestion is evident from extracts of an August 27, 2006 feature article in the Los Angeles Times by Martha Groves and Sharon Bernstein entitled, “Job Boom Makes Driving a Chore on the Westside - Economic growth draws new residents and 300,000 workers a day from outside the area, stretching commutes and fraying nerves.”

Customers calling in for their pizza deliveries from the Domino's in Westwood typically live within a mile or two of the parlor. But these days, Domino's drivers say they often endure wicked traffic from the moment they leave the store, turning what once was a quick delivery into a 30-minute, and sometimes a 45-minute, ordeal.

Population on the Westside has jumped 23% since 1990 (compared with a 6% increase for Los Angeles as a whole). But experts say the biggest culprit in rush-hour traffic snags is a boom in Westside commercial development that has lured and created jobs.

"If there isn't gridlock due to heavy traffic, there's gridlock due to detours and construction projects," said architect Howard Lichtman of Culver City. "Wherever you want to go, it's taking longer than you expect."

Kate Vernez, an assistant to Santa Monica's city manager thinks the traffic solution must be tied to land

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development. "It's a combination of mass transit along key corridors and mixed-use development. That seems to be a winning scenario."

For now, commuters are learning to live with the backups. Renee Travlos skips breakfast some mornings to begin the half-hour commute from her Fairfax district home to her job as office manager for a law firm near Brentwood. If she leaves later than 8:15, her drive time doubles and she's late for work. Her nearly seven-mile drive takes anywhere from half an hour to an hour or more, including 20 minutes to travel the mile between the Santa Monica Freeway and her Barrington Avenue office.

These stories define how traffic congestion impacts peoples’ lives in Southern California. Along the Orangeline Maglev corridor, the story is the same. The Authority and its member cities see the Orangeline Maglev as an alternative to congested roadways – not one that merely reduces the stress of driving by taking a few minutes off a long and frustrating daily commute, but one that eliminates the stress altogether by offering a comfortable ride that frees up time to sleep, read a paper, or get some last-minute work done before an important meeting, or an opportunity to just sit back, relax and enjoy the view as you fly over congested roadways at speeds of 70-150 miles per hour.

3.2 AIR POLLUTION

Air pollution is a serious threat to public health in Southern California. In addition to causing lung damage, toxic pollutants are known to damage the human reproductive, nervous, and immune systems. Prolonged exposure to toxic pollutants can cause cancer and premature death.

Transportation vehicles in 2002 emitted 58 percent of the nation’s pollution from carbon monoxide (CO), 45 percent of nitrogen oxides (NOX), 36 percent of volatile organic compounds (VOC), 4 percent of particulates, 8 percent of ammonia, and 5 percent of sulfur dioxide. Highway vehicles emitted almost all of transportation’s share of CO emissions in 2002, 78 percent of the NOX, and 77 percent of all VOC.

Transportation emissions of greenhouse gases (GHGs) grew 19 percent between 1993 and 2003. Nearly all (95 percent) of CO2 emissions—the predominant GHG—are generated by the combustion of fossil fuels.

Transportation CO2 emissions grew 19 percent between 1993 and 2003.

Health risks for children – For children, dirty air is an even bigger problem because kids are more susceptible to the health effects of air pollution than adults. Unlike adults, a child’s organs – including the brain, lungs and reproductive system - are in a constant state of development and do not reach full maturation until well past puberty.

Children also breathe more air per pound of body weight at a rate of 2 – 3 times that of an adult. Due to this greater breathing rate, a child’s lungs receive a greater dose of air pollution than adults. Lung capacity growth of children in smoggier communities was stunted by ten percent, according to one study, as

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compared to their counterparts in areas with better air quality. Children in urban industrial areas, where there are higher concentrations of air toxics, are also far more likely to suffer from asthma than kids in the suburbs.

Asthma – Air pollution induced asthma attacks have reached epidemic proportions; asthma is a serious and potentially life threatening illness. Asthma now causes more pediatric hospitalizations than any other chronic disease. 2.3 million Californians suffer from the debilitating disease – almost twice the national average. Children are particularly impacted by asthma caused by air pollution – especially in schools located close to freeways and other mobile sources.

Along with the difficulty and pain for kids, asthma attacks are expensive. They can lead to late-night emergency room visits and expensive doctor bills. Families often have to set up entire support structures to deal with a disease that takes an enormous amount of resources. And medicines are expensive – often more than $200 every month.

Airports – Los Angeles International Airport is the second largest industrial smog source in the Los Angeles area. Air pollution from airports is exempt from many rules that other industrial polluters must follow. Air travel is expected to double within the next two decades. It is the fastest growing mode of travel in the United States.

One 747 arriving and departing from LAX produces as much smog as a car driven over 5,600 miles, and as much nitrogen oxide pollution as a car driven nearly 26,500 miles. The adverse impact of aircraft-induced air pollution is not expected to go away soon. The United States is one of only 3 countries opposing a worldwide standard that would reduce the impact of aircraft emissions.

Issues of environmental justice – Pollution levels are particularly bad in low-income neighborhoods and communities of color. These communities are often located next to busy freeways, large industrial enterprises, including petroleum refineries and power plants, and under the flight path of aircraft near the region’s major airports.

Toxic emissions on the increase – Recent research results on the health impacts of toxins have been alarming; studies have found that levels of toxics in the air can pose health risks of as many as 1400 additional cancer cases per million people.

The number of deaths from breathing smog in California may be more than twice as high as previously estimated, based on a recent USC study that examined the risk of such deaths in the Los Angeles Basin. A team of researchers headed by Michael Jerrett, USC associate professor of preventive medicine, found two to three times greater risk of mortality from heart attacks, lung cancer and other serious illness tied to chronic exposure to fine particulate matter than did previous studies.

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Other studies have shown the effect of air pollution on health, including one by researchers at Harvard University who found that as soot pollution declined in six northeastern cities, related deaths declined as well. A recent study by Loma Linda University, found increased coronary deaths among women exposed to both fine particulate matter and ozone.

A Los Angeles Times report by Janet Wilson indicated that one in every 15,000 Californians -- about 66 per million -- is at risk of contracting cancer from breathing chemicals in the air over his or her lifetime, according to the U.S. Environmental Protection Agency's recent National-Scale Air Toxics Assessment. The study was based on emissions of 177 chemicals in 1999.

"The more we learn about particulates, the worse the news is," said Jerry Martin, a spokesman for the Air Resources Board, who added that as recently as 10 years ago, ozone and toxics were considered the problem. "Part of that is the technology for looking at very fine particles keeps improving.... A fine particle is less than one-twenty-eighth the size of a human hair. At that size, it can actually permeate right through your lungs into your bloodstream and cause heart problems."

Other air regulators and clean-air advocates said the USC study points to the need to toughen national standards for fine particulate. "The study underscores the extremely grave severity of the threat from air pollution," said Frank O'Donnell of Clean Air Watch in Washington, D.C. "It draws a huge line under the need for the federal government to take aggressive action against existing sources of diesel soot."

Sam Atwood, spokesman for the South Coast Air Quality Management District, said the agency's chief health expert "considers it a significant study that bolsters the need to strengthen particulate matter standards."

The Los Angeles Times article concluded with a comment on a separate USC study published in Environmental Health Perspectives Journal, which found that ozone, a different type of air pollution, reduced sperm counts in Los Angeles men. Other pollutants did not affect sperm counts. "The data indicated that for every 14 parts per billion increase in ozone, we had an approximate drop of 3 million sperm per millimeter," said lead author Rebecca Sokol, a USC endocrinologist. That is about a 3% drop in sperm as the ozone level rose, especially on smoggy summer days.

A study by the Coalition of Clean Air found that:

• Breathing air in polluted metropolitan areas such as Los Angeles or Riverside can reduce your life expectancy by 2 to 3 years.

• When you drive in bumper-to-bumper traffic, pollutants outside can seep into your car, making the air you breathe inside your car up to 10 times more polluted than typical city air.

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• If you live, work or go to school near freeways, high-traffic roads, seaports, and rail yards, (as many people living in Orangeline Maglev cities do) you are generally at greater risk for cancer and decreased lung function, studies show, because these places contain more concentrated levels of air pollution.

• For children in these areas, toxic air pollution is an even bigger problem, in part because children breathe much more quickly than adults.

• Asthma is a leading cause of school absenteeism, according to the California Department of Education.

• Health impacts from diesel pollution exposure, such as premature death, heart disease, asthma and bronchitis, cost some $22 billion statewide in 2004, not including impacts such as lost work and school days.

The California Air Resources Board reports that in 2000, California's population grew to 34 million. There were 23.4 million registered vehicles in the state at that time. Annual vehicle miles traveled (VMT) reached 280 billion miles. The statewide average for vehicular nitrogen oxides emissions was 2.1 grams / mile; the average for hydrocarbons was 1.6 grams/mile. Cumulative California vehicle emissions for nitrogen oxides and hydrocarbons were about 1.2 million tons per year.

It is clear from the many studies and reports completed over the past 10 years that air pollution is a serious concern. The Orangeline High Speed Maglev would have a significant impact on reducing air pollution along its 108-mile corridor, by eliminating over 6,000 tons of air pollution per year, assuming the air pollution rates per vehicle mile in 2000. Unlike other transportation projects which require mitigation strategies to reduce the amount of additional air pollution they will create, the Orangeline High Speed Maglev will actually result in an overall reduction in air pollution. For this reason, the project could serve to offset the air pollution increases that will come from public expenditures on other transportation projects.

3.3 ENERGY EFFICIENCY

Energy consumption is a growing concern. Communities able to offer their residents a means for reducing energy consumption will be more competitive in the future and be better able to attract investments in new housing and other developments. The cost of gasoline makes up about 20 percent of annual vehicle operating costs and is a key factor in the cost of living and in the rising cost-of-living index.

The Bureau of Transportation Statistics reports that the transportation sector used 17 percent more energy in 2004 than it did in 1994, an annual growth rate of 1.2 percent. Transportation's share of the nation's total energy consumption also grew between 1994 and 2004, from 26 to 27 percent.

Over 97 percent of all transportation energy consumed in 2003 and 2004 came from petroleum. Total U.S. petroleum usage increased 16 percent between 1993 and 2003, with transportation responsible for 75

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percent of that rise. In 2003, transportation consumed 66 percent of all petroleum (13.2 million barrels per day), up from 65 percent in 1993. Because over half of U.S. petroleum is imported, the United States, and especially the transportation sector, may be vulnerable to supply disruptions with fuel price fluctuations having the potential to contribute to economic instability.

Progress is slowly being made in improving vehicle fuel efficiency. Hybrid vehicles are gaining in popularity and they are becoming more available and affordable for consumers. The introduction of these new advanced technologies is needed to achieve the same efficiency improvements achieved from 1975 to 1985, but which have flattened out or even declined since then.

The Bureau of Transportation Statistics reports that highway passenger travel—by passenger cars, motorcycles, and light trucks—represented 87 percent of all passenger miles traveled (pmt) and 92 percent of passenger travel energy use in 2002. Overall, highway travel was 2.5 percent more efficient in 2002 compared with 1992. This gain was due to a 2.9 percent increase in the efficiency of passenger cars and motorcycles and a 3.3 percent increase in the efficiency of light trucks.

Improved vehicle efficiencies are not enough to achieve the energy savings that are needed to significantly reduce the nation’s dependence on foreign oil, or to shield the nation from the threats of political upheaval and national security risks. These threats and security risks affect local communities as well. Shielding residents from such risks is an important benefit that local government can bestow on its citizens.

Many recognize that, in addition to improving vehicle fuel efficiency, it is important to restrain growth in vehicle use as measured by VMT. VMT has steadily increased in recent decades and is expected to grow around 40% during the next 20 years under the policies and trends of the past. Local community leaders are beginning to recognize that improvements in alternative modes of travel, such as mass transit, better land-use planning that includes better ways to accommodate growth, transport pricing reform, and other measures could improve the nation’s energy efficiency and reduce dependence on foreign oil. It is recognized that many of these policies are the responsibility of local or regional agencies. State and federal governments also play a role through their funding of transportation infrastructure, implementation of state and federal air quality laws, and other policies.

The Orangeline High Speed Maglev would play a significant role in addressing energy concerns and offer member cities an alternative travel mode that would help to shield residents from gasoline supply

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disruptions and price fluctuations, as well as economic instability. The Orangeline Maglev would attract approximately 215,000 to 255,000 daily trips that would otherwise be made in an auto. The diversion of auto trips to maglev would reduce the consumption of energy by an equivalent 50 million gallons of gasoline a year. This savings in gasoline consumption does not account for the additional savings that result from fewer auto trips made overall by people using maglev. These factors help make this an attractive alternative to the auto and contribute to the ridership attraction of the high speed system.

3.4 CONSTRAINTS ON AIRPORTS AND SHIPPING

A perplexing issue for the region is the capacity constraint of the area’s predominant airport, LAX. By policy, the City of Los Angeles, which owns LAX, as well as Ontario, Van Nuys and Palmdale airports, has set a limit on the number of flights that may go in and out of LAX. The limit has been established to constrain the adverse impacts of the airport on surrounding communities, including air pollution, noise, and traffic impacts.

A second factor hampering the region’s ability to meet air traffic demand is the decision by Orange County to convert the El Toro Marine Air Base into a park and enable housing and other real estate improvements. The air base had been considered for use as a commercial airport.

The region has adopted a policy in its Regional Transportation Plan that air travel demand be dispersed to other regional airports, including Palmdale. Efforts to establish Palmdale as a significant airport, by attracting flights that would otherwise use LAX, have not been successful due to the long distance and travel times from the major population centers south of the San Gabriel Mountains.

The Orangeline High Speed Maglev solves this problem by vastly reducing travel time from the southern part of the county to Palmdale. In fact, many air travelers would find that they are closer time-wise to Palmdale Airport than to LAX due to the high congestion levels on the freeways serving that airport.

This new form of transportation will provide a major impetus to developing Palmdale Airport. Once developed and with reasonable flight schedules serving the airport, a significant percentage of Orangeline Maglev trips would be airport-destined travelers.

In addition to Palmdale, the Orangeline Maglev would also serve Burbank Airport. And in Orange County, the line comes within 5 miles of John Wayne Airport and could be linked by an auxiliary transit connector. Another option that will be considered in the next development phase is an alignment directly serving John Wayne.

3.5 LAND USE/RESIDENTIAL DENSITY

The Authority’s member cities, like all cities in the region, control land use through various plans, regulations and policies. California State law requires cities to adopt a General Plan that provides the policy framework for the long-term physical development of the community. General Plans express community development

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goals and provide specific policy relative to the public and private uses of land in the community. General Plans link community values, visions and objectives with the way public and private land and other community resources are utilized. General Plans are comprehensive and long-term, and provide the primary guidance for specific projects, policy actions or programs that may occur in the future.

State law requires seven mandatory elements in the General Plan of a city, including: Land Use, Circulation, Housing, Conservation, Open Space, Noise and Safety. State law also allows cities to include optional elements. Some cities have included additional elements covering such issues as: Growth Management, Air Quality and Community Design.

While General Plans of the Authority’s member cities vary considerably from city to city, there are some common themes, particularly as they relate to the issue of land use and transportation. Each of the cities looks at the Circulation Element as the one that deals with streets primarily; when in effect, the Circulation Element addresses the impact of the Land Use Element. The Land Use Element defines the types of uses that are permitted for land in the city, which in turn defines the types and level of traffic generated by each parcel of land and for the city as a whole. Thus, the Land Use Element has as important a role in determining the nature and quality of traffic in a city as does the Circulation Element.

A defining characteristic of the General Plans of virtually all of the Orangeline member cities, as well as of the other cities along the corridor, is the separation of different types of land uses, such as housing, commercial, industrial, etc. The net effect of this feature of local land use policy is that an automobile is required to accomplish almost all trip purposes, whether it be to go to work, to the grocery store, to the doctor or to just about anyplace.

Traffic congestion begins with local land use plans; they define how much traffic will be generated and how that traffic will be accommodated. Regional agencies, such as MTA and OCTA, and state agencies such as Caltrans, can do little to influence either the amount of traffic that will be generated, or to avoid the traffic congestion and other impacts of that traffic on the fabric and quality of life of the communities. At best, they are able to help tie the region together and connect them with other regions throughout the state. But even there, the quantity and quality of services provided has been less than what mobility demands require.

While all the General Plans of the included cities have much in common, there are stark differences among them when considering how the land is used, particularly when it comes to residential densities. The predominant land form common to all the cities is single-family residential. Even so, residential density varies considerably from the low thousands of people per square mile, in cities like Palmdale and Lancaster, to the high twenty thousands or so people per square mile in cities like Maywood, Cudahy and Huntington Park.

A major shift in land use policies is coming into play. More and more, cities are looking to higher-density, mixed use developments tied to transit improvements to accommodate a growing population. Cities are recognizing that the region’s attractions will continue to draw people to Southern California, which when

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added to net internal growth, is fueling the demand for more housing and more transportation infrastructure. Orangeline High Speed Maglev cities recognize that they can play a significant role in influencing and meeting that demand.

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4. DESCRIPTION OF MARKET BEING SERVED

4.1 CITIES AND COUNTIES

The Orangeline High Speed Maglev will provide direct service to 30 cities and unincorporated areas of Los Angeles and Orange Counties that the line passes through. Additionally, there are another 15 communities within the “sphere of influence” that will receive a primary benefit from the Maglev system. Secondary benefits will accrue to all of the other 76 cities in Los Angeles and Orange Counties that will be linked to the this new system through various connecting transportation modes.

Two over-arching features mark the nature of virtually all of the cities in the region ― they are all growing in population and they are all growing in diversity. Add to that a dynamic economy fueled by trade, entertainment, technology, tourism, film production and other industries and you have a growing and dynamic region that looks to the future with great optimism.

4.2 POPULATIONS

Since the 1990 Census, the Southern California region has grown from 14.6 million to 16.5 million – an increase of 12.8%. All of the counties in the region experienced a growth of at least 12% with the exception of Los Angeles County, which grew by 7.4%. In absolute numbers L.A. County grew by 656,286 which was the highest increase in the state.

The Hispanic population now represents the largest ethnic group in the region (40.57%) followed by White (38.85%), Asian (10.19%) and African American (7.30%). The white population represents the largest ethnic group in Orange County (51.26%).

Los Angeles County is the most populous county in the United States. Figures from the U.S. Census Bureau give an estimated 2005 population of 9,758,886 residents, while the California State government's population bureau lists a January 1, 2006, estimate of 10,245,672. The county seat is the City of Los Angeles.

The county is home to 88 incorporated cities and many unincorporated city-like areas. The coastal portion of the county is heavily urbanized, though there is a large expanse of lesser populated desert inland in the Santa Clarita Valley, and especially in the Antelope Valley which encompasses the northeastern parts of the county and adjacent eastern Kern County, lying just north of Los Angeles County. In between the large desert portions of the county ― which make up around 40 percent of its land area ― and the heavily urbanized central and southern portions sits the San Gabriel Mountains containing the Angeles National Forest. All of southern Los Angeles County, up to about the center of the county, is heavily urbanized.

Los Angeles County holds most of the principal cities encompassing the Greater Los Angeles Area. As of 2004, the county's population was larger than the populations of 42 states and was home to over a quarter

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of all California residents. In addition, if the county were a nation, it would be the 17th largest economy in the world.

Orange County’s population is larger than that of 20 states. It is the second most populous county in the state of California, and the fifth most populous in the United States. The county is known for its wealth and political conservatism, although it is in reality neither as uniformly wealthy nor as homogeneously conservative as its stereotypical image suggests. In fact, the wealthiest areas in the county: Anaheim Hills, Corona del Mar, Newport Beach, Laguna Beach, and Villa Park only account for 15% of Orange County's total population.

Orange County is also famous as a tourist destination, as the county is home to such attractions as Disneyland and Knott's Berry Farm, as well as sandy beaches for swimming and surfing, yacht harbors for sailing and pleasure boating. In addition extensive acreage is devoted to parks and open space for golf, tennis, hiking, kayaking, cycling, and other outdoor recreation.

The cities along the proposed corridor have a population of about 3.4 million. This number includes only a portion of the City of Los Angeles. Table 8 shows population and population density data of each city. The data for these cities is compared to that of other cities in the U.S. and in other nations that are actively planning maglev systems. Also shown are population growth rates for a number of cities where such data ara available.

Population data show the high population density along portions of the corridor and the high population growth rates in the City of Santa Clarita and in the Cities of Palmdale and Lancaster, as well as in established communities such as Downey, Orange and Irvine.

Table 8: Population and Population Density of Orangeline Maglev Corridor Cities City Population Area (sq Density Project Growth 2000 mi) Length Rate (mi) 1990 to 2000 North Segment San Fernando 24,253 2.40 10,105 1.20 Los Angeles* 369,000 47.00 7,851 18.36 6.10% Glendale 200,499 30.60 6,552 3.13 8.10% Burbank 103,354 17.30 5,974 3.92 6.80% Santa Clarita 162,742 47.80 3,405 5.26 15.60% Lancaster 125,896 94.00 1,339 4.30 15.30% Palmdale 127,759 105.00 1,217 4.49 25.30% LA County Uninc.* 150,000 150.00 1,000 30.00 North Segment Sub Total 1,263,503 494.10 2,557 70.66

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South Segment Maywood 28,751 1.20 23,959 0.26 Cudahy 25,236 1.10 22,942 0.73 Huntington Park 63,139 3.00 21,046 1.11 East Los Angeles 124,283 7.40 16,795 4.92 6.10% Bell 37,694 2.50 15,078 0.41 South Gate 98,966 7.40 13,374 3.17 12.20% Santa Ana 342,510 27.10 12,639 3.65 14.90% Bellflower 77,000 6.10 12,623 2.39 Stanton 37,853 3.10 12,211 1.42 Paramount 56,660 4.70 12,055 1.94 Artesia 17,000 1.60 9,665 0.94 Garden Grove 167,029 18.00 9,279 4.95 14.70% Downey 110,360 12.40 8,900 0.38 17.20% La Palma 15,408 1.80 8,560 0.72 Baltimore 651,154 80.80 8,058 40.00 -11.50% Munich 1,600,000 200.00 8,000 23.00 Buena Park 78,934 10.60 7,447 0.28 Cypress 47,215 6.60 7,154 2.09 Anaheim 332,361 48.90 6,797 0.80 11.40% Cerritos 52,800 8.60 6,140 2.55 Pittsburgh 334,563 55.60 6,019 40.00 -9.50% Tustin 67,504 11.40 5,921 2.50 Orange 128,821 23.40 5,505 0.50 15.90% Las Vegas 478,434 113.30 4,222 40.00 36.20% Ontario 158,000 49.80 3,174 5.00 2.00% Atlanta 416,474 131.80 3,161 40.00 5.70% Irvine 143,072 46.20 3,097 6.00 18.80% Los Alamitos 11,536 4.00 2,884 0.00 The Netherlands 16,000,000 16,031.00 998 111.00 United Kingdom 60,000,000 94,500.00 635 500.00 Vernon** 44,000 5.20 8,462 1.35 South Segment Sub Total 2,108,132 312.10 6,755 48.06 Total 3,371,635 806.20 4,182 118.72 *Portions of total population; **Day-time employment; City population is 91

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4.3 COMMUTERS

Commuters will make up the largest share of Orangeline users. The commuter market for high speed maglev service is very strong, due in large part to the lack of capacity to meet total demand, decline in travel speeds on the region’s freeway network, and the rising unpredictability of freeway conditions. Delays caused by regular bottlenecks are compounded by freeway construction and non-recurrent delay due to accidents and other roadway incidents. The unpredictability of freeway travel requires added time in travel plans or acceptance of delays in reaching destinations. These factors draw interest in the Orangeline Maglev as a travel alternative.

Maglev’s higher average speeds, particularly during peak travel periods, will give commuters free time now dedicated to driving on congested roadways. The added free time riding on the Maglev gives commuters value. When this value is added to the cost savings from use of the Orangeline Maglev, the total cost savings is substantial. Table 9 presents an illustrative example of potential savings resulting from the Orangeline High Speed Maglev.

Table 9: Illustrative Benefits of Using the Orangeline High Speed Maglev versus Driving an Automobile for Daily Commuting Daily Time Annual Cost Annual Time Savings Savings and Cost (Hours) Savings Union Station to Palmdale (60 mi) 2.8 $3,010 $39,610 Glendale to Santa Ana (40 mi) 1.5 $2,400 $26,800 Union Station to Cypress (20 mi) 0.8 $1,790 $13,990

Current rider characteristics of Metrolink, the regional commuter rail network, give an indication of how such services are used. The average trip length on Metrolink is 35 miles. Metrolink users typically arrive by car after driving 10 miles from their trip origin. The average total travel time for a Metrolink user commuting 45 miles is about 90 minutes, including parking and wait time at the station.

The net effect of the higher speed of the Orangeline Maglev is that commuters will be able and willing to travel further distances than they would either driving or using Metrolink, other things remaining equal. This gives commuters greater options for employment and for housing (which is usually less costly further away from the urban center). As some members of the public observed at recent community outreach events, “With the Orangeline Maglev I’ll be able to get a job further away from my home and not have to move.”

It is projected that about 5% to 6% of long-distance trips in the corridor would be on the Orangeline High Speed Maglev. Current traffic volumes on freeways within about a 10-mile band along the proposed system (5 miles out from each side of the Maglev line) give a hint of the high volume of commuter and overall traffic

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that currently exists in the corridor. Additional surface street traffic levels and unmet demand add up to a total estimated demand for long distance service of about 2 million daily trips in the corridor, the majority of which will be commuters.

Table 10: Freeway Volumes within Orangeline Maglev Corridor

Freeway Avg. Annual Daily Traffic I-5 208,000

SR-14 112,000 SR-91 253,000 I-605 249,000 I-710 213,000 SR-170 134,000 SR-134 221,000 SR-60 201,000 I-210 118,000 SR-2 133,000

4.4 MAJOR ACTIVITY AND MULTI-MODAL CENTERS

Cities along the Orangeline High Speed Maglev corridor are experiencing significant real estate development in a number of activity centers and multi-modal centers that will be directly served by the maglev system.

The dominant urban center along the corridor, and in the region, is downtown Los Angeles. In addition to new office buildings planned or under construction, downtown Los Angeles is experiencing a major growth in residential development. One development currently under construction at the Staples Center sports and entertainment complex includes 2,000 residential units, a 54-story hotel and condominium tower, a 7,100-seat live performance theater, broadcast facilities, a 15-screen movie theater and a number of restaurants and clubs. Another recently announced project involves a 50- story office tower costing more than $300 million.

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The Orangeline High Speed Maglev is planned to connect with numerous rail and bus services converging at Union Station in downtown Los Angeles. This location is also a significant development site with headquarters offices of the MTA, Metropolitan Water District and other government and private tenants.

Orange County is developing a new regional transit center in Anaheim’s Platinum Triangle urban development center. This regional transit center would serve as a connection point for long-distance rail and maglev services, and local public transit services. The site for this regional transit center, which the Orangeline Maglev would serve, is near major sports and entertainment venues such as Angels Stadium, The Pond and the Disney Resort. The center is currently served by Metrolink and AMTRAK rail services. The Platinum Triangle is being planned as a vibrant 24-hour high-density, mixed-use urban environment that could include 9,500 dwelling units, 5 million square feet of office space and over 2 million square feet of commercial space.

Garden Grove is planning a $300 million project – with lofts, retail spaces and twin high-rise towers – that officials say will give Garden Grove a distinctive skyline. The 1.2 million-square-foot “Brookhurst Triangle” project is seen by city officials as an "alternative to Anaheim's Platinum Triangle." The development plan includes 800 housing units, including lofts, condominiums, as well as 40,000 to 50,000 square feet square feet of retail space. It is seen as the first of future development projects that will form a high-density urban center proposed to be served by the Orangeline Maglev. "This is for those who want the urban lifestyle but choose to live in Garden Grove for whatever reason," according to the project developer. "We would like the Brookhurst Triangle to be a landmark in the community."

Santa Ana, with a population of 350,000, is the seat of government in Orange County. In April 2005, Santa Ana voters approved what would become Orange County’s tallest building, a 37-story high-rise. The building is seen as the beginning of a new age of urbanization and going vertical.

Irvine is actively developing the former El Toro Marine Air Base into a regional park and mixed-use development. The current plan calls for 9,500 dwelling units that will add 16,000 more people to the city’s population, all of whom would be closely located to the Orangeline High Speed Maglev station at the Irvine Transit Center. The Great Park itself will become a major attraction, drawing people from all over Orange County and Los Angeles County.

The City of South Gate is working aggressively to attract new mixed-use development, particularly around the planned Orangeline Maglev station. A $175-million outdoor mall, called the Gateway, is being built on the site of a former pipe manufacturing plant. At 600,000 square feet, the mall would be one of the largest in Los Angeles County. Other property around the planned Maglev station location is being actively marketed for development by the city to create a major mixed-use destination center.

Palmdale Airport is planned as a major airport in the Antelope Valley, which has long been a magnet for development, but these days the boom is accelerating and going upscale. Lancaster, just north of Palmdale is the fastest-growing city in Los Angeles County; the city saw its assessed property values increase about

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29% in 2005. Palmdale was the second-fastest growing city. The Southern California Assn. of Governments projects that the Antelope Valley's population will rise from about 290,000 to nearly 500,000 in the next 15 to 20 years. Several planned communities are also slated to the west and south, adding more than 100,000 residents. The combination of the tremendous growth in population and employment, along with Palmdale Airport as a major multimodal hub, increases that attractiveness of the Orangeline Maglev as a critical link with the more developed portions of the region.

4.5 CONNECTIONS WITH OTHER MAGLEV LINES, PUBLIC TRANSIT AND OTHER MODES

There are currently three other Maglev system proposals and one high speed rail system proposal under consideration by various agencies that would have a connection to the Orangeline High Speed Maglev. These systems are identified in the SCAG Regional Transportation Plan and the Orange County Transportation Authority (OCTA) Long Range Transportation Plan for 2006 (Figures 4 and 5).

The high-speed rail system, being proposed by the California High-Speed Rail Authority (CHSRA), would serve Sacramento, San Francisco, the San Joaquin Valley, Los Angeles, the Inland Empire, Orange County, and San Diego (via Riverside County or the LOSSAN Corridor). Within Orange County, the high- speed electrified rail system may operate as far south as the Irvine Transportation Center (ITC). Station spacing for this system is about 15 to 50 miles and operating speeds are projected to be about 60 to 185 mph.

The Southern California Association of Governments (SCAG) is pursuing a Maglev project from LAX to the Inland Empire that generally follows the I-10 Freeway corridor. An initial operating segment has been defined with stations in West Los Angeles, downtown Los Angeles, West Covina and Ontario. SCAG also completed an LAX - Orange County Maglev corridor study in October 2004. The corridor is proposed along the I-405 Corridor and have stations at LAX, Carson, Long Beach, Seal Beach, Huntington Beach, John Wayne Airport, ITC, Santa Ana, and Anaheim.

A California-Nevada Maglev project extending from Las Vegas to Anaheim is being sponsored by Nevada public agencies and local California communities along the proposed corridor and a private interest group. The project received an earmark for funding in the new Federal Transportation Act ($45 million over five years). A state environmental impact assessment is about to begin for the Anaheim – Ontario Maglev project that could eventually connect Orange County to Las Vegas.

If all these systems are constructed, they would form a network of high speed ground transportation that would provide a viable alternative to travel by auto or by air for many trips throughout the region and the state.

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Figure 4: Regional High Speed Maglev Network

Figure 5: OCTA Long Range Transportation Plan – High Speed Rail and Maglev Projects

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5. OVERVIEW OF PROJECT HISTORY, AND “STATE OF THE ORANGELINE HIGH SPEED MAGLEV”

5.1 INITIAL HIGH SPEED GROUND TRANSPORTATION STUDIES

Beginning in 1997, the Southern California Association of Governments (SCAG) conducted a series of planning studies addressing the region’s long-term transportation needs. SCAG recognized that existing roads, air and seaport facilities and public transit systems were insufficient to meet future demands, and that expanding those existing systems would be increasingly expensive and disruptive to affected communities.

SCAG began to explore new and innovative ways to meet future transportation needs. SCAG’s focus shifted to innovative transportation systems and delivery methods to provide Southern California the level of high speed mobility that the freeways had promised and delivered in earlier years.

SCAG’s investigations included a review of potential technologies and routing alternatives for a regional high-speed ground transportation network to complement the existing freeway and airport systems serving the region. These studies were conducted between 1999 and 2004 , by different engineering teams, for the highly-congested freeway corridors described in the previous section:

• LAX-San Bernardino/Riverside County

• LAX-Downtown Los Angeles-Palmdale (part of the Orangeline Maglev)

• LAX-South Orange County

In January 2002, the Gateway Cities Council of Governments, representing 27 cities in southeast Los Angeles County initiated a parallel study in cooperation with SCAG for a high-speed line from Downtown Los Angeles to Orange County.

The studies evaluated a range of feasible and practical ground transportation technologies, as shown in Figure 6, and included:

• Technologies initially considered but not carried forward due to their slow speed (such as local bus).

• Higher-speed, improved quality bus service. (such as El Monte Freeway bus)

• Conventional rail, (such as Metrolink or AMTRAK)

• High-speed rail, (such as the European ICE or the Japanese Shinkansen)

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• High-speed maglev (such as Shanghai Maglev)

Further, the feasibility studies also evaluated technology criteria, including:

• System Performance

• Technology Applicability

• Project Fit

• Supplier/Team Qualifications

These analyses resulted in the finding that the most appropriate technology available for achieving the goals set out to improve regional mobility, currently in commercial operation, is maglev technology developed by a consortium of German firms called Transrapid (TRI). The studies also determined that the maglev system could be funded largely from private funds – namely, passenger and freight fees and other operating revenues.

Figure 6: Alternative Public Transit Technologies Considered in Initial Planning Studies (in addition to Maglev and High Speed Rail)

SCAG also compared the various maglev corridor projects to identify the corridor segments with the highest potential return on investment. Results of that evaluation are shown in Table 11.

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Table 11: Comparative Evaluation of Maglev Corridor Segments Revenue/Cost Ratio Indicator Segment Ratio Years Payoff Non LAX-connected Projects • Union Station-Anaheim (ORANGELINE – ALT 1) 5.6 30 2039 • Union Station-Santa Ana (ORANGELINE – ALT 2) 5.0 33 2042 • West Los Angeles-Union Station 3.9 63 2072 • West Los Angeles-Union Station-West Covina-Ontario 3.1 ? ? • Union Station-West Covina-Ontario 1.8 ? ? • Anaheim-Corona-Ontario Airport 1.5 ? ? LAX-connected Projects • LAX-Union Station-Anaheim (ORANGELINE+LAX)* 6.9 24 2033 • LAX-West Los Angeles-Union Station 6.8 25 2034 • LAX-West Los Angeles-Van Nuys 6.2 27 2036 • LAX-West Los Angeles-Van Nuys-Santa Clarita 5.6 31 2040 • LAX-Union Station-Burbank-Van Nuys 4.3 46 2055 • Long Beach-LAX-West Los Angeles-Union Station 4.3 45 2054 • LAX-Union Station 4.0 54 2063

*This alternative, which provides an “apples-to-apples” comparison of the Orangeline and other LAX-connected alternatives by extending the Orangeline to LAX, is based on extrapolation of SCAG study data.

Formation of the Orangeline Development Authority was an out-growth of the SCAG and Gateway Cities Council of Governments studies. The Authority approved the TRI maglev technology as the technology of choice for the Orangeline High Speed Maglev system in December 2005. All subsequent engineering and financial planning work was based on the use of the TRI maglev technology.

5.2 WORK PERFORMED TO DATE

After executing a public private partnership agreement in August 2005, the Orangeline Development Authority and ARCADIS initiated the Phase 1 Preliminary Engineering work program. This approximately $1.5 million engineering and financial planning effort built upon the knowledge gained in the previous $10 million studies.

The purpose of the Authority-ARCADIS agreement is to undertake the Orangeline Corridor Development Project, which includes: 1) analyzing the feasibility and determining the viability of the project; 2) performing the initial design and acquiring the funding for the project; 3) constructing the Orangeline High Speed Maglev transportation system, and constructing Orangeline Maglev station-area real estate developments, as approved by the Authority’s member cities; and 4) operating and maintaining the Orangeline Maglev to provide high-speed transportation services to the Authority’s member cities.

This final Milestone Report completes the Phase 1 Preliminary Engineering work program technical tasks undertaken pursuant to the Authority-ARCADIS agreement. This report summarizes and is based upon the work documented in the prior milestone reports.

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5.3 PREVIOUS PROJECT MILESTONES REACHED

In addition to this key milestone report, there are nine prior reports marking key steps and decision points in the development of the Orangeline High Speed Maglev. The milestones reached are listed below.

Milestone Reports Date of Approval

1. Project Management Plan 11/9/2005 2. System Concept 11/9/2005 3. Alignment and Station Locations 2/8/2006 4. Ridership Modeling Assumptions 2/8/2006 5. Operations Plan 5/10/2006 6. Cargo and Freight 10/11/2006 7. Station Area Development 9/9/2006 8. Costs and Revenue 11/8/2006 9. Deployment Plan 11/8/2006 10. Financial Plan 11/8/2006

Each of the Milestone reports and the minutes of the public meetings at which they were discussed and voted upon can be found at www.orangline.calmaglev.org.

5.4 PATH FORWARD

It is currently estimated that $200 million will be needed to complete Phase II of the Orangeline High Speed Maglev Project. Based upon previous ARCADIS conversations with a limited number of investment bankers and private financiers, this funding is not available in equity or traditional debt form due to the perceived risks related to project development issues that remain to be resolved, such as environmental clearances, political commitments and right of way acquisition. Although this has been the finding so far, further attempts will be made to approach traditional and non-traditional lenders. The actions that are necessary to reduce or eliminate risks to potential investors will be identified.

As an alternative solution, grants and other sources of non-investment funding will be sought as well. Grants are traditionally available in various amounts from different private and public entities, each with unique criteria and time and cost to pursue. It is advisable to seek smaller grants (in the range of a few hundred thousand to a few million) as seed capital in order to fund the legislative, political and logistical efforts necessary to go after the larger sums of money. This progressive approach of going after smaller and easier to obtain money could reduce the out of pocket expense from the Authority and also serve as a transition phase between Phase I and Phase II of the project.

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Over the next several months the Authority, with the assistance of ARCADIS, will work to explore possible sources of both traditional and non-traditional capital for funding of Phase II. Necessary funding may require a credit enhancement or guarantee from a State or Federal Agency or a corporate entity. Immediately, a plan will be established, along with a time table, identifying the various sources and potential for success. The reality of the situation and positive aspect of a project that makes economic sense and fulfills a definite public need will go a long way towards achieving success.

5.5 DESCRIPTION AND ESTIMATE OF THE COST TO COMPLETE PHASE 2 PRELIMINARY ENGINEERING & ENVIRONMENTAL REPORTING

A detailed budget for Phase 2 will be developed by the Authority and ARCADIS during the completion of Phase 1 activities. A preliminary budget has been prepared by ARCADIS that outlines the following key budget items and estimates for Phase 2.

Estimated Cost Scope Item

1. $ 1.35 M Phase 1 In-Kind Services Reimbursement 2. $ 80 M Environmental Planning & Permitting 3. $ 2 M Investor Grade Revenue Plan 4. $ 80 M 15% Design – Civil, Electrical, Maintenance, Geotech, Parking 5. $ 10 M Public Outreach, Stakeholders & Agency Meetings 6. $ 7 M Vehicles, Beams, Substations, O&M Facilities 7. $ 2 M Legal/Financial/P3 8. $ 12 M TOD/Station: Master Plans/Urban Design 9. $ 1 M Bonds, Financing 10. $ 4.5 M Management-Schedule, Deliverables, Subconsultant Oversight

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6. FINANCIAL

6.1 SUMMARY OF RESULTS

The financial analysis has been prepared by ARCADIS for the Orangeline Development Authority using cost and revenue estimates generated by the ARCADIS-led team, including AZTEC Engineering, Transrapid International, and Meyer Mohaddes Associates.

This feasibility analysis included modeling the projected capital costs, operations and maintenance costs, financing costs, and revenue generation, in order to determine the financial viability of the project. Based upon the work to date and the assumptions made by the project team, the Orangeline Maglev Project is projected to pay off all debt associated with construction and operation by the year 2044, solely based upon the revenue that the system will generate. The financial model also forecasts that the project will produce a profit of roughly $30 billion by the year 2050, assuming no additional capital improvements are required after initial construction. Please note that the financial model is for the full Maglev alignment, totaling 108 miles and 18 stations. However, the system will most likely be built in phases, similar to most transportation projects. The sequence of phasing the construction of the Maglev and what segments will be built first, needs to be fully explored in the next phase of the project. Absent that information, this financial model will assume that the entire system will be built at one time, and not in phases. The impact of phasing the system will reduce initial capital costs, O&M costs, as well as revenue. The Orangeline Development Authority and the ARCADIS-led team will endeavor, in the next phase, to determine what initial segment represents the best investment and has the highest chances for success.

6.2 SUMMARY OF CAPITAL COSTS

The ARCADIS-led team estimated the capital costs required to build the full Orangeline Maglev System, including the guideway, vehicles, maintenance facilities, and stations. The following are general capital cost categories; for more detailed information please refer to Appendix VI - 1.

• Structures/Foundations/Tunnels

• Earthwork

• Stations

• Maintenance Facilities

• Guideway/Communications/Signals/Power

• Vehicles

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• Right of Way Acquisition

• Existing Utility Relocation

When all of the capital costs categories are added together, the total cost to build the Orangeline Maglev System is roughly $18,668,000,000 in 2006 dollars.

6.2.1 Construction Schedule

Since the Orangeline will not be constructed in 2006, annual inflation of 3% has been factored into the capital costs used in the financial model. The construction time table estimates that the full Maglev system will be completed within a total of seven years, with the first 2 years being engineering design work, and the remaining five years being the actual construction. The table below shows the percentage of total work estimated to be completed in each year, assuming engineering and design begins in late 2006.

2006 2007 2008 2009 2010 2011 2012 0.25% 0.25% 5.00% 10.00% 30.00% 35.00% 19.00%

The percentages in each year are then multiplied by the inflated capital cost associated with that year in the financial model. The resulting inflated total capital cost for the Orangeline Maglev Project is roughly $21,237,900,000.

6.2.2 Construction Debt Assumptions

The construction of the Orangeline Maglev is expected to employ three different sources of debt. A two year short term loan, with a 6% interest rate, is projected to finance the design and engineering costs. This debt is then refinanced by the permanent construction loans.

There are two different construction loans used in the financial model. First, a TIFIA secured loan is used to pay for 1/3 of all construction activities. TIFIA, which stands for the Transportation Infrastructure Finance and Innovation Act, offers secured loans to assist major transportation investments and projects. Secured loans are direct federal loans to project sponsors offering flexible repayment terms and providing combined construction and permanent financing of capital costs. The amount of federal credit assistance may not exceed 33 percent of total project costs. The interest rate on the TIFIA loan is assumed to be 6%. The remaining 2/3 of the required construction financing is assumed to be a standard construction loan, also with a 6% interest rate. When construction is complete, both the TIFIA and the standard construction loan are projected to be refinanced using tax exempt bonds, which will be paid down over time using revenue from operations. The total interest accumulation during the construction period is forecasted be roughly $2,600,000,000. Thus, the total outstanding debt carried over into the financial model is roughly

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$23,850,000,000. For more information on the cost escalations, schedule, and debt calculations, please see Appendix VI – 3.

6.3 SUMMARY OF O&M COSTS

The ARCADIS-led team has estimated all of the costs required in order to operate and maintain the Orangeline Maglev Project. As follows are the cost categories that make up the annual O&M cost.

• Maintenance of Way

– Support facilities – Guideway – Structures – Propulsion – OCS

• Maintenance of Equipment (maglev vehicles)

• Transportation/Energy

– Train Operations/Dispatching/Communications – Power

• Passenger/Traffic Services

– Marketing/Reservations/Ticketing – Passenger/Station Services – Parking Operations (could be responsibility of 3rd party) – Bus Operations (could be responsibility of 3rd party) – Buses and Cars/Vans – Station Operations (could be responsibility of 3rd party)

• General & Administrative

– General Administrative/Support – Insurance – Security When added together, all of the various operations and maintenance cost estimates total roughly $330,000,000 per year, in 2006 dollars. The financial model then inflates this annual figure by 3% per year. Since the Orangeline Maglev is not expected to be in operation until late 2012, the beginning base year

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O&M cost used in the financial model is roughly $394,000,000. This number is then inflated by 3% annually during operations. For more detailed information, please see Appendix VI -2.

6.4 REVENUE ASSUMPTIONS

6.4.1 Ridership

Meyer Mohaddes Associates has forecasted the daily ridership for the Orangeline Maglev using a regional travel demand model generated by the SCAG. This process provided daily ridership for peak and off peak travel from home based trips, both for passengers expected to walk to a maglev station and for passengers expected to drive and park at a maglev station. The horizon year daily ridership (meaning the ridership forecasted when the system cannot expect to attract additional riders, other than general population growth) for the home based trips is forecasted to be 189,841. This number represents the total trips associated with round trip travel.

Based upon previous maglev corridor studies and the Regional Transportation Plan (RTP), airport related trips were expected to account for an additional 8% of daily riders, induced travel is projected to account for an additional 4%, and special events is forecasted add another 1% to the total daily home based trips. When these additions have been factored into the daily home based ridership estimates, the horizon year daily ridership increases to 214,520. The base year, when the maglev comes into operation, is expected to have fewer riders than the horizon year. The horizon year number will be reached when more and more people become aware of the maglev system, and decide to become riders.

It is anticipated that significant real estate development will occur around the Maglev stations, as Transit Oriented Development (TOD) has been a very attractive real estate development investment in recent years, and this will affect the activity on the Orangeline. Estimates for households and employment surrounding the station locations were added to the Transit Area Zones (a TAZ is an area where people are close enough to access and utilize the maglev). Next, total households and employment added within each County were calculated based on how many stations are within each County. Last, households and employments were reduced by applying county wide reduction factors to all TAZs (with the exception of stations' TAZs) in order to keep the County household and employment totals constant. When the same regional travel demand model from SCAG is used with the new information, it forecasts that there will be an additional 40,000 daily riders at the horizon year. This is the result of the new development surrounding maglev stations. It is expected that while real estate developers will break ground on new TOD projects prior to the completion of the Orangeline, not all developments will be finished and built out by the base opening year. In order to account for this dynamic, as well as the realization that full horizon year ridership will not occur in the base year; only 67.5% of total horizon year riders are expected to utilize the system in the opening base year. Thus, the financial model forecasts that the average daily ridership in the first full year of operations will be 172,260. After full build out of the TOD areas, the total horizon year average daily ridership for the maglev system is forecasted to be roughly 255,000. For more detail on ridership, and expected travel demand from station to station, please see Appendices VI – 6 and VI -7.

Milestone 10 — Orangeline Maglev Financial Plan

6.4.2 Fare Assumptions

The fare price depends on the distance traveled on the Orangeline Maglev (see Appendix VI - 5 for more information). The average fare for a one-way trip on the Orangeline is $21. Fares were established based upon comparison with other transportation options, such as the Metrolink, and the $21 represents roughly four times the fare for the Metrolink. The increased fare is attributed to the higher speed of the maglev, and the ability to travel to several different cities and other transportation connections. Thus, with an opening day ridership estimate of 172,260 (total trips) and a fare of $21 per trip, the opening day revenue from ridership is $3,617,460. The financial model is an annual model; in order to annualize this daily revenue from ridership we multiply it by 305. While there are 365 days in a year, the 305 number is a level of conservatism added to the model to account for reduced travel on weekends and holidays. Thus, the base year annual ridership revenue is estimated to $1,103,325,300.

6.4.3 Other Revenue Sources

• Freight: The Orangeline speed makes it ideal to transport small valuable freight. Revenue for the freight transportation has been estimated to be 7% of the passenger (ridership) revenue.

• Concessions and Advertising: Concessions and advertising at station locations is estimated to bring in an additional 2% of the passenger revenue

• Parking: Parking at the stations is estimated to produce an additional 11.5% of the passenger revenue

6.4.4 Total Annual Revenue

When the other revenue sources are added to the passenger (ridership) revenue, the base year annual revenue total for the Orangeline Maglev is forecasted to be $1,329,506,987.

6.4.5 Annual Revenue Increase

In order to account for additional riders in future years, both as the Orangeline becomes more widely known and development occurs surrounding stations, and as population growth is forecasted; and to account for inflation, the total annual revenue is forecasted to escalate by 4.4% annually in the financial model.

6.5 FINANCIAL MODEL METHODOLOGY AND RESULTS

All of the costs and revenues described in the sections above have been factored into the financial model (see Appendix VI - 4 for the full financial model). The financial model takes the outstanding debt balance from the construction of the system, adds in interest expense associated with the tax exempt bonds (assumed to be 6%), adds in the annual O&M cost (which is escalated at 3% per year), and then subtracts

Milestone 10 — Orangeline Maglev Financial Plan

out the total annual revenue. The result is the new outstanding debt balance in each year. As the revenues continue to grow (at 4.4%), and as the debt is gradually paid off, the financial model forecasts that the entire outstanding debt will be paid off in the year 2044. This means that, based upon the estimates, assumptions, and methodologies employed in the financial model, that the Orangeline Maglev is projected to be financially viable solely based upon the revenue that it will produce. Not only does the financial model forecast that the system will be self-sustaining, but after the capital costs and associated debt have been paid off, it forecasts a profit of roughly $30 billion by the year 2050, assuming no future capital investment is required after initial construction.

Milestone 10 — Orangeline Maglev Financial Plan

7. INVESTMENT SUMMARY

7.1 BRIEF DESCRIPTION OF INVESTMENT OPPORTUNITIES

7.1.1 Phase II Funding

Phase II presents an opportunity for government entities, foundations, venture capitalists and financial institution to participate in the early stages of one of the most exciting transportation projects in the history of California and the United States. As has been demonstrated in Section VI of this report, under certain assumptions the Orangeline Maglev Project is capable of being built in phases and currently starting operation no later than 2012.

At the present time, with the information we have, it appears that Private Equity and Debt may not be available for Phase II, thus funds should be sought from either grants or loan guarantees. Even though private sources do not appear to be available they will be sought, along with efforts to seek public finance or guarantees. As previously mentioned, most applicable grants are relatively small and the approval phase can be lengthy. State loan guarantees appear to be a more logical approach. With regard to Phase III, financing the construction of the Orangeline, everything must be “concrete” before making an approach to the capital markets. In conversations with investment bankers and potential financiers, each indicated that the project needed to be more definitive before they could evaluate any investment potential. This entails having final alignment and routing, final station locations, agreements with all applicable municipalities and government agencies, a very comprehensive risk management plan, a revised and comprehensive feasibility study, contractual agreements/ownership/ability to use rights-of-way, clear ownership structure, regulatory clearance, environmental permits and clearance, demonstration of required political support, operations and maintenance plans, and detailed financial projections. At the present stage of the project a guaranty of revenues from a credit worthy entity may be required.

Milestone 10 — Orangeline Maglev Financial Plan

and easier to obtain money could reduce the out of pocket expense from the Authority and also serve as a transition phase between Phase I and Phase II of the project.

Over the next several months the Authority with the assistance of ARCADIS will work to explore possible sources of both traditional and non-traditional capital for funding of Phase II. Necessary funding may require a credit enhancement or guarantee from a State or Federal Agency or a corporate entity. Immediately, a plan will be established, along with a time table, identifying the various sources and potential for success. The reality of the situation and positive aspect of a project that makes economic sense and fulfills a definite public need will go a long way towards achieving success.

Upon approval of Milestone 10, a plan will be prepared that outlines the monthly activaties, funding requirements and a decision process tied to findings on whether to proceed or not proceed with the project. The most logical source of funding for these activities is from government entities, major suppliers and foundations. Details of this approach and funding sources may be found in the Orangeline Development Authority Funding and Financing Options Plan dated May 2006.

7.1.2 Phase III Funding

At this point in time it is too early to project the outcome and availability of various sources of permanent funding for Phase III. Some of the sources are mentioned in the above referenced Plan and will be further detailed and developed during Phase II. In summary, as positive developments take place in this next phase the construction and long term financing will be more obvious and available.

7.1.3 Brief Description of the Risks

The risks of this type of project become very obvious as you look at its magnitude and complexity. Listed below you will find a list of potential risk elements and possible mitigation or risk management plans. When you look at the overall situation, the major risk to the people of California is that project funding is not successful and this desperately needed means of transportation does not become reality.

7.2 RISK MANAGEMENT PLAN

7.2.1 Risk Elements

Following are the main or key risk elements identified to date:

• State and Federal support

• Ability to sign up key cities and continued cooperation of current Authority cities

Milestone 10 — Orangeline Maglev Financial Plan

• Right-of-way acquisition and cost

• Cooperation of airports currently included in the alignment

• Environmental clearance

• Availability and cost of electricity

• Ridership projections and revenue reality

• Availability and cost of land for the maintenance facility

One of the main objectives of Phase II is to prioritize the risk elements, evaluate each, and make staged decisions on the reality of the project. The need for this alternate mode of transportation is critical to the success and future of the State of California and this recognition becomes a key part of the risk evaluation process.

Funding can and should be tied to the outcome of the evaluation process for each risk factor and a decision will then be made on moving forward. This process will be detailed and presented to any potential providers of funding, investors and or lenders to the project.

All interested parties should contact:

Albert Perdon Executive Director Orangeline Development Authority 16401 Paramount Boulevard Paramount, CA 90723 [email protected]

APPENDIX VI - 1

CAPITAL COSTS

Summary $4,037,652,000 Structures & Earthwork $1,775,600,000 Stations, Parking & O-M Facility $5,291,092,500 Guideway & Power Distribution $3,363,360,000 Vehicles $540,720,000 ROW & Utilities $2,136,239,650 Design/CM/Survey $1,332,674,450 Program Implementation $190,619,160 Environ. Mitigation $18,667,957,760 Total

Total Estimated Contingencies, Estimated Design/Construct. Estimated Program Environmental Management, & Item/System Total Item Quantity Unit Unit Cost Cost Subtotal Contingencies Implementation Impact Mitigation Mitigation Cost

Length of Alignment - Miles 108.5 Miles Length of Alignment - Kilometers 174.6 Kilometers

20% 10% 3% 33%

Structures/Foundations/Tunnels ======> $3,943,152,000 $788,630,400 $394,315,200 $118,294,560 $1,301,240,160 $5,244,392,160

Nominal Viaducts (Double Track) 163.3 Kilometers $18,720,000 $3,056,976,000 Norminal Viaduct (Single Track) Kilometers $0 Medium-High Viaducts (Double Track) 18.1 Kilometers $32,950,000 $596,395,000 HIgh (Double Track) 0.7 Kilometers $56,830,000 $39,781,000 Special Structures 2.5 Kilometers $100,000,000 $250,000,000 Tunnels (Double Track) 0.0 Kilometers $80,000,000 $0 TOTAL 184.6 Kilometers (Additional track for O&M fac.) 20% 10% 3% 33%

Earthwork ======> $94,500,000 $18,900,000 $9,450,000 $2,835,000 $31,185,000 $125,685,000

Cut 5000 1000-cu m $7,000 $35,000,000 Fill 5000 1000-cu m $11,000 $55,000,000 Drainage 5% of cut/fill $4,500,000

20% 10% 3% 33%

Stations/Maintenance Total Cost

Stations ======> $270,000,000 $54,000,000 $27,000,000 $8,100,000 $89,100,000 $359,100,000 Palmdale 1 Each $15,000,000 $15,000,000 Santa Clarita 1 Each $15,000,000 $15,000,000 San Fernando 1 Each $15,000,000 $15,000,000 Burbank Airport 1 Each $15,000,000 $15,000,000 Burbank CBD 1 Each $15,000,000 $15,000,000 Glendale 1 Each $15,000,000 $15,000,000 LA Union Station 1 Each $15,000,000 $15,000,000 Huntington/Bell/Maywood/Vernon 1 Each $15,000,000 $15,000,000 South Gate/Cudahy 1 Each $15,000,000 $15,000,000 Downey/Paramont 1 Each $15,000,000 $15,000,000 Bellflower 1 Each $15,000,000 $15,000,000 Artesia/Cerritos 1 Each $15,000,000 $15,000,000 Cyress 1 Each $15,000,000 $15,000,000 Staton 1 Each $15,000,000 $15,000,000 Anaheim (ARTIC) 1 Each $15,000,000 $15,000,000 Santa Ana 1 Each $15,000,000 $15,000,000 Tustin 1 Each $15,000,000 $15,000,000 Irvine Transp. Ctr 1 Each $15,000,000 $15,000,000

Maintenance ======> $1,485,600,000 $297,120,000 $148,560,000 $44,568,000 $490,248,000 $1,975,848,000 Maintenance Facilities 1 Each $1,484,600,000 $1,484,600,000 Parking Facilities ($17,000 per space per OCTA) 0 Each $17,000 $0 Small Facility/Switchyards 0 Each $310,000,000 $0 Beam Maint. And Testing Vehicle 1 $1,000,000 $1,000,000

Construction Support ======> $20,000,000 $4,000,000 $2,000,000 $600,000 $6,600,000 $26,600,000 Beam Fabrication Plant 1 $10,000,000 $10,000,000

Special Equipment 1 $10,000,000 $10,000,000

10% 10% 0% 20%

Guideweay/Communications/Signals/Power ======> $5,291,092,500 $529,109,250 $529,109,250 $0 $1,058,218,500 $6,349,311,000

System Guideway (Double Track-Elevated) 174.6 Kilometers $12,750,000 $2,226,150,000 System Guideway (Double Track - At-Grade) 7.5 Kilometers $11,660,000 $87,450,000 Power Substations/Distribution 182.1 Kilometers $9,750,000 $1,775,475,000 Operating Control Systems/Communications 182.1 Kilometers $4,875,000 $887,737,500 Soundwalls (Noise Protection) 174.6 Kilometers $400,000 $69,840,000 Safety Fencing/Landscaping 174.6 Kilometers $1,400,000 $244,440,000

10% 5% 0% 15%

Vehicles Total Costs ======> $3,363,360,000 $336,336,000 $168,168,000 $0 $504,504,000 $3,867,864,000

Eight-section Vehicle 42 Each $80,080,000 $3,363,360,000

20% 10% 3% 33%

ROW/Utility Relocation

Right-of-Way ======> $530,770,000 $106,154,000 $53,077,000 $15,923,100 $175,154,100 $705,924,100 ROW - Dense Urban (50') 10 Kilometers $5,920,000 $59,200,000 ROW - Urban (50') 5 Kilometers $1,164,000 $5,820,000 ROW - Industrial (50') 5 Kilometers $1,150,000 $5,750,000 Additional ROW for alignment 700000 M2 $400 $280,000,000 O&M Faciltities ROW 450000 M2 $400 $180,000,000

Utility Relocation ======> $9,950,000 $1,990,000 $995,000 $298,500 $3,283,500 $13,233,500 In Dense Urban Area 10 Kilometers $700,000 $7,000,000 In Dense Urban Areas 5 Kilometers $375,000 $1,875,000 In Industrial Areas 5 Kilometers $215,000 $1,075,000

TOTAL $15,008,424,500 $2,136,239,650 $1,332,674,450 $190,619,160 $3,659,533,260 $18,667,957,760

Cost per Mile for the System $138,326,493 $172,054,910

Cost per Kilometer for the System $85,958,903 $106,918,429

Notes (1) Guideway cost estimates are from Max Boegl (Doc no. 78078); Guideway quantities are only representative (final quantities from Project Team) (2) Due to the standard, factory produced nature of the guideway beams, the fact that they are certified in advance of the project, and the fact that they are produced independent of location of the insta (only require the alignment data for the installation location), TRI recommends that the contingencies on the guideway beams be reduced to 10% (as with the vehicles). There are no/few location-related risks and uncertainties in guideway beams (compared with the substructures and foundations, which are entirely dependent on the location along the alignment). The Program Impementation costs can remain at 30%. A reduction (or elimination) in the Environmental Impact Mitigation surcharge should also be considered, since this is covered in the substructures/foundations. Also because the entire route runs at lower speeds (below 300 km/h) with little or no noise and vibration impact to the surroundings. (3) The unit costs for propulsion and operation control are escalated to reflect quantities for 5-minute headways.

In the next phase, with more detailed planning and layout work, the aforementioned unit costs can be refined / supplied in more detail. APPENDIX VI - 2

OPERATIONS AND MAINTENANCE COSTS

Summary

$329,567,387 Annual Total O&M Cost 5-minute headway scenario

5-minute Headway Transrapid Quantities/Units: Source TRI Cost Per IOS Annual Cost Cost Items1 Quantity Vehicle Mile or Unit (Year 2006 Dollars) (+10% over 2000) 10% Personnel (costs assumed): Annual Trips / Distance Maintenance Manager 1 $120,000 $120,000 Hr/day Headway Vehicles/hr/dir Vehicle Trips/day Engineers 9 $80,000 $688,000 (min) Technicians, Electricians 202 $50,000 $10,110,000 Peak hours 8 5 12 192 Maintenance of Way (M-O-W) $10,918,000 Off-peak hours 10 10 6 120 Total trips/day 312 Personnel (costs assumed): Total annual vehicle trips 113,880 Technicians, Electricians 263 $50,000 $13,150,000 Maintenance of Vehicles $13,150,000

80% of Personnel Costs Maintenance Materials (comsumables) $19,254,400 Energy Consumption Personnel (costs assumed): 113,880 Annual vehicle trips Security 135 $50,000 $6,750,000 12.00 MWh/trip (8-section vehicle) Operations Director 1 $150,000 $150,000 1,530,547 MWh, Annual energy consumption Vehicle Operations/Dispatching 17 $80,000 $1,384,000 (incl. 12% for supporting equipment, stations) Station Personnel (Operations) 91 $50,000 $4,550,000 $0.10 $ / kWh Power $153,054,720 $1,200.00 $ / vehicle trip Operation/Power Subtotal $165,888,720 $153,054,720 Annual energy cost (incl. 12% for supporting equipment, stations) Vehicle Attendants 624 $60,000 $37,440,000 Marketing/Reservations/Ticketing $1.13 $14,000,616 Passengers/Station Services $1.84 $22,700,027 Passenger/Traffic Services Subtotal $2.97 $74,140,643 46% Energy as a percent of total cost

General Administrative/Support $1.16 $14,272,472 Insurance $2.59 $31,943,152 General and Administrative Subtotal $3.74 $46,215,624

Annual Trips 113,880 Annual Vehicle Miles 12,357,119 19,882,604 Annual vehicle km

Annual Total O&M Cost $329,567,387

1 Cost items include ythe following:ypp,pg,j,ppp supply maintenance, OCS, communication maintenance, and M-O-W facilities operating overhead Maintenance of Vehicles:Short turnaround cleaning, service inspection, maintenance and repair. Transportation/Power:g Superintendenceg, and dispatching,, power,g, vehicle movement,g , p g yard operations,, gg transportationg , facilities poperating and maintenance., and station overhead. g , ,p ,p , g , y, , y p g and maintenance.

TRI Financial Model and Appendix VI-1 thru VI-7 (modified) Final.xls: O&M Costs VI-2 Doc. No. 78341 30-Nov-06 APPENDIX VI - 3

ORANGELINE HIGH SPEED MAGLEV INITIAL FINANCING SCENARIO FOR CONSTRUCTION

INPUTS COST ESCALATION SCHEDULE Capital Cost $ 18,668,000,000 Capital O&M O&M Cost $ 330,000,000 2006 18668 $330,000,000 Capital Cost Escalation Rate 3% 2007 19228.04 $339,900,000 O&M Cost Escalation Rate 3% 2008 19804.8812 $350,097,000 Short Term Interest Rate 6% 2009 20399.02764 $360,599,910 TIFIA Interest Rate 6% 2010 21010.99847 $371,417,907 Tax-exempt/vendor interest rate 6% 2011 21641.32842 $382,560,445 2012 22290.56827 $394,037,258 2013 22959.28532 $405,858,376 capital cost value $18,668 $19,228 $19,805 $20,399 $21,011 $21,641 $22,291 2014 23648.06388 $418,034,127 (all figures in millions, except for O&M costs) in year 2006 2007 2008 2009 2010 2011 2012 2015 24357.5058 $430,575,151 CAPITAL USES 2016 25088.23097 $443,492,405 % of capital applied 0.25% 0.25% 5.00% 10.00% 30.00% 35.00% 19.00% 100% 2017 25840.8779 $456,797,177 Total capital required $46.7 $48.1 $990.2 $2,039.9 $6,303.3 $7,574.5 $4,235.2 $21,237.9 2018 $470,501,093 2019 $484,616,125 DEBT 2020 $499,154,609 Short-term loan proceeds $ 46.67 $ 48.07 2021 $514,129,247 Short-term interest $ 1.40 $ 4.33 2022 $529,553,125 Total Short-term outstanding debt $ 48.07 $ 100.47 2023 $545,439,719 2024 $561,802,910 2025 $578,656,998 TIFIA Principal $ 330.08 $ 679.97 $ 2,101.10 $ 2,524.82 $ 1,411.74 2026 $596,016,707 TIFIA Interest $ 11.91 $ 42.93 $ 128.94 $ 275.45 $ 410.07 2027 $613,897,209 Total Outstanding TIFIA debt $ 33.49 $ 375.48 $ 1,098.38 $ 3,328.41 $ 6,128.68 $ 7,950.49 2028 $632,314,125 2029 $651,283,549 2030 $670,822,055 Tax-exempt/vendor principal $ 660.16 $ 1,359.94 $ 4,202.20 $ 5,049.64 $ 2,823.47 2031 $690,946,717 Tax-exempt/vendor interest $ 23.82 $ 85.86 $ 257.87 $ 550.90 $ 820.15 2032 $711,675,118 Total cumu tax-exempt/vendor debt $ 66.98 $ 750.96 $ 2,196.75 $ 6,656.83 $ 12,257.37 $ 15,900.99 2033 $733,025,372 2034 $755,016,133 2035 $777,666,617 Total cumulative debt $ 48.07 $ 100.47 $ 1,126.45 $ 3,295.13 $ 9,985.24 $ 18,386.05 $ 23,851.48 2036 $800,996,615 2037 $825,026,514 2038 $849,777,309 TOTAL OUTSTANDING DEBT TO BE CARRIED OVER TO DEBT SCHEDULE SHEET $ 23,851,479,530 2039 $875,270,629 2040 $901,528,748 TOTAL INTEREST 2,613,620,148.28 2041 $928,574,610 2042 $956,431,848 2043 $985,124,804 2044 $1,014,678,548 2045 $1,045,118,904 2046 $1,076,472,471 2047 $1,108,766,646 2048 $1,142,029,645 2049 $1,176,290,534 2050 $1,211,579,250 2051 $1,247,926,628 2052 $1,285,364,427 2053 $1,323,925,359 2054 $1,363,643,120 2055 $1,404,552,414 2056 $1,446,688,986 APPENDIX VI - 4

ORANGELINE HIGH SPEED MAGLEV FINANCIAL MODEL

Base Year Daily Ridership 172,260 52,539,300 ANNUAL RIDERSHIP Average Fare $21 $3,617,460 Base Year Annual Ridership Revenue $1,103,325,300 freight 7% Of ridership revenue $77,232,771 Resulting Annual Total parking 11.50% Of ridership revenue $126,882,410 Resulting Annual Total concessions/advertising 2% Of ridership revenue $22,066,506 Resulting Annual Total Base Year Annual Revenue $1,329,506,987 Annual Revenue Growth 4.40% Interest Rate on Debt 6%

RIDERSHIP/REVENUE/DEBT PAYMENT FORECASTS BY YEAR Annual Revenues Beginning Plus Plus O&M Cost Ending 4.40% Debt Interest 3% Subtotal Minus Debt Year Annual Growth Balance 6% Annual Escalation Expenses Annual Revenues Balance

2012 $1,329,506,987 $23,851,479,530 $1,431,088,772 $394,037,258 $25,676,605,559 $1,329,506,987 $24,347,098,573 2013 $1,388,005,294 $24,347,098,573 $1,460,825,914 $405,858,376 $26,213,782,863 $1,388,005,294 $24,825,777,569 2014 $1,449,077,527 $24,825,777,569 $1,489,546,654 $418,034,127 $26,733,358,350 $1,449,077,527 $25,284,280,823 2015 $1,512,836,938 $25,284,280,823 $1,517,056,849 $430,575,151 $27,231,912,823 $1,512,836,938 $25,719,075,885 2016 $1,579,401,763 $25,719,075,885 $1,543,144,553 $443,492,405 $27,705,712,843 $1,579,401,763 $26,126,311,080 2017 $1,648,895,441 $26,126,311,080 $1,567,578,665 $456,797,177 $28,150,686,922 $1,648,895,441 $26,501,791,481 2018 $1,721,446,840 $26,501,791,481 $1,590,107,489 $470,501,093 $28,562,400,063 $1,721,446,840 $26,840,953,223 2020 $1,797,190,501 $26,840,953,223 $1,610,457,193 $484,616,125 $28,936,026,541 $1,797,190,501 $27,138,836,040 2021 $1,876,266,883 $27,138,836,040 $1,628,330,162 $499,154,609 $29,266,320,812 $1,876,266,883 $27,390,053,928 2022 $1,958,822,626 $27,390,053,928 $1,643,403,236 $514,129,247 $29,547,586,412 $1,958,822,626 $27,588,763,785 2023 $2,045,010,822 $27,588,763,785 $1,655,325,827 $529,553,125 $29,773,642,737 $2,045,010,822 $27,728,631,916 2024 $2,134,991,298 $27,728,631,916 $1,663,717,915 $545,439,719 $29,937,789,549 $2,134,991,298 $27,802,798,251 2025 $2,228,930,915 $27,802,798,251 $1,668,167,895 $561,802,910 $30,032,769,057 $2,228,930,915 $27,803,838,142 2026 $2,327,003,875 $27,803,838,142 $1,668,230,289 $578,656,998 $30,050,725,428 $2,327,003,875 $27,723,721,553 2027 $2,429,392,046 $27,723,721,553 $1,663,423,293 $596,016,707 $29,983,161,553 $2,429,392,046 $27,553,769,507 2028 $2,536,285,296 $27,553,769,507 $1,653,226,170 $613,897,209 $29,820,892,887 $2,536,285,296 $27,284,607,591 2029 $2,647,881,849 $27,284,607,591 $1,637,076,455 $632,314,125 $29,553,998,171 $2,647,881,849 $26,906,116,322 2030 $2,764,388,650 $26,906,116,322 $1,614,366,979 $651,283,549 $29,171,766,850 $2,764,388,650 $26,407,378,200 2031 $2,886,021,751 $26,407,378,200 $1,584,442,692 $670,822,055 $28,662,642,947 $2,886,021,751 $25,776,621,197 2032 $3,013,006,708 $25,776,621,197 $1,546,597,272 $690,946,717 $28,014,165,185 $3,013,006,708 $25,001,158,477 2033 $3,145,579,003 $25,001,158,477 $1,500,069,509 $711,675,118 $27,212,903,104 $3,145,579,003 $24,067,324,101 2034 $3,283,984,479 $24,067,324,101 $1,444,039,446 $733,025,372 $26,244,388,919 $3,283,984,479 $22,960,404,440 2035 $3,428,479,796 $22,960,404,440 $1,377,624,266 $755,016,133 $25,093,044,840 $3,428,479,796 $21,664,565,044 2036 $3,579,332,907 $21,664,565,044 $1,299,873,903 $777,666,617 $23,742,105,563 $3,579,332,907 $20,162,772,656 2037 $3,736,823,555 $20,162,772,656 $1,209,766,359 $800,996,615 $22,173,535,631 $3,736,823,555 $18,436,712,076 2038 $3,901,243,791 $18,436,712,076 $1,106,202,725 $825,026,514 $20,367,941,315 $3,901,243,791 $16,466,697,523 2039 $4,072,898,518 $16,466,697,523 $988,001,851 $849,777,309 $18,304,476,684 $4,072,898,518 $14,231,578,165 2040 $4,252,106,053 $14,231,578,165 $853,894,690 $875,270,629 $15,960,743,484 $4,252,106,053 $11,708,637,431 2041 $4,439,198,719 $11,708,637,431 $702,518,246 $901,528,748 $13,312,684,424 $4,439,198,719 $8,873,485,705 2042 $4,634,523,463 $8,873,485,705 $532,409,142 $928,574,610 $10,334,469,457 $4,634,523,463 $5,699,945,994 2043 $4,838,442,495 $5,699,945,994 $341,996,760 $956,431,848 $6,998,374,602 $4,838,442,495 $2,159,932,106 2044 $5,051,333,965 $2,159,932,106 $129,595,926 $985,124,804 $3,274,652,837 $5,051,333,965 $0 2045 $5,273,592,660 $0 $0 $1,014,678,548 $1,014,678,548 $5,273,592,660 $0 2046 $5,505,630,737 $0 $0 $1,045,118,904 $1,045,118,904 $5,505,630,737 $0 2047 $5,747,878,489 $0 $0 $1,076,472,471 $1,076,472,471 $5,747,878,489 $0 2048 $6,000,785,143 $0 $0 $1,108,766,646 $1,108,766,646 $6,000,785,143 $0 2049 $6,264,819,689 $0 $0 $1,142,029,645 $1,142,029,645 $6,264,819,689 $0 2050 $6,540,471,755 $0 $0 $1,176,290,534 $1,176,290,534 $6,540,471,755 $0

ESTIMATED PROFIT BY YEAR 2050 $30,546,502,853 APPENDIX VI - 5

FARE SCHEDULE

Metrolink Fares (Round Trip) For Comparison

Huntington Los Angeles Santa San Burbank Burbank Park/Bell/Ma SouthGate/ Downey/Par Artesia/Cerr Palmdale Glendale Union Bellflower Cypress Stanton Anaheim Santa Ana Tustin Irvine ITC Clarita Fernando Airport Amtrak ywood/Vern Cudahy amount itos Station on

Palmdale $0.00 $13.50 $15.75 $16.00 $16.00 $18.50 $18.50 $10.00 $10.50 $11.00 $21.75 $22.00 $22.50 $23.00 $23.50 $23.50 $23.50 $23.50 Santa Clarita $13.50 $0.00 $10.00 $10.50 $10.50 $13.25 $13.25 $13.50 $13.75 $14.00 $14.50 $15.00 $16.00 $17.00 $18.75 $21.25 $21.50 $21.75 San Fernando $15.75 $10.00 $0.00 $8.00 $8.00 $10.25 $10.25 $10.50 $10.75 $11.00 $12.00 $12.50 $13.50 $15.00 $16.00 $18.25 $18.50 $18.50 Burbank Airport $16.00 $10.50 $8.00 $0.00 $7.25 $7.50 $8.00 $8.25 $8.25 $8.50 $9.00 $9.50 $10.50 $12.00 $13.50 $15.75 $16.00 $16.50 Burbank Amtrak $16.00 $10.50 $8.00 $7.25 $0.00 $7.50 $7.75 $8.00 $8.25 $8.50 $9.00 $9.50 $10.50 $12.00 $13.50 $15.50 $15.75 $16.00 Glendale $18.50 $13.25 $10.25 $7.50 $7.50 $0.00 $7.50 $7.75 $8.00 $8.25 $8.50 $9.50 $10.25 $11.50 $13.25 $13.25 $15.75 $15.75 Los Angeles Union Station $18.50 $13.25 $10.25 $8.00 $7.75 $7.50 $0.00 $7.50 $7.75 $8.00 $8.25 $9.50 $10.00 $11.00 $13.00 $15.00 $15.25 $15.50 Huntington Park/Bell/Maywood/Vernon $10.00 $13.50 $10.50 $8.25 $8.00 $7.75 $7.50 $0.00 $7.50 $7.75 $8.00 $9.00 $9.75 $10.00 $12.75 $14.50 $14.75 $15.25 SouthGate/Cudahy $10.50 $13.75 $10.75 $8.25 $8.25 $8.00 $7.75 $7.50 $0.00 $7.50 $8.00 $8.50 $9.50 $11.50 $12.50 $14.25 $15.00 $15.25 Downey/Paramount $11.00 $14.00 $11.00 $8.50 $8.50 $8.25 $8.00 $7.75 $7.50 $0.00 $7.50 $8.00 $9.25 $10.75 $11.50 $14.00 $14.50 $14.50 Bellflower $21.75 $14.50 $12.00 $9.00 $9.00 $8.50 $8.25 $8.00 $8.00 $7.50 $0.00 $7.50 $8.50 $10.00 $11.00 $13.50 $14.00 $14.00 Artesia/Cerritos $22.00 $15.00 $12.50 $9.50 $9.50 $9.50 $9.50 $9.00 $8.50 $8.00 $7.50 $0.00 $8.00 $9.50 $10.50 $13.00 $13.50 $13.50 Cypress $22.50 $16.00 $13.50 $10.50 $10.50 $10.25 $10.00 $9.75 $9.50 $9.25 $8.50 $8.00 $0.00 $9.00 $10.00 $12.50 $12.75 $13.00 Stanton $23.00 $17.00 $15.00 $12.00 $12.00 $11.50 $11.50 $10.00 $11.50 $10.75 $10.00 $9.50 $9.00 $0.00 $9.50 $10.50 $11.00 $12.00 Anaheim $23.50 $18.75 $16.00 $13.50 $13.50 $13.25 $13.00 $12.75 $12.50 $11.50 $11.00 $10.50 $10.00 $9.50 $0.00 $9.50 $9.75 $10.00 Santa Ana $23.50 $21.25 $18.25 $15.75 $15.50 $13.25 $15.00 $14.50 $14.25 $14.00 $13.50 $13.00 $12.50 $10.50 $9.50 $0.00 $7.50 $7.75 Tustin $23.50 $21.50 $18.50 $16.00 $15.75 $15.75 $15.25 $14.75 $15.00 $14.50 $14.00 $13.50 $12.75 $11.00 $9.75 $7.50 $0.00 $7.50 Irvine ITC $23.50 $21.75 $18.50 $16.50 $16.00 $15.75 $15.50 $15.25 $15.25 $14.50 $14.00 $13.50 $13.00 $12.00 $10.00 $7.75 $7.50 $0.00

Orangeline High Speed Maglev One-Way Fares

Palmdale $0.00 $27.00 $31.50 $32.00 $32.00 $37.00 $37.00 $20.00 $21.00 $22.00 $43.50 $44.00 $45.00 $46.00 $47.00 $47.00 $47.00 $47.00 Santa Clarita $27.00 $0.00 $20.00 $21.00 $21.00 $26.50 $26.50 $27.00 $27.50 $28.00 $29.00 $30.00 $32.00 $34.00 $37.50 $42.50 $43.00 $43.50 San Fernando $31.50 $20.00 $0.00 $16.00 $16.00 $20.50 $20.50 $21.00 $21.50 $22.00 $24.00 $25.00 $27.00 $30.00 $32.00 $36.50 $37.00 $37.00 Burbank Airport $32.00 $21.00 $16.00 $0.00 $14.50 $15.00 $16.00 $16.50 $16.50 $17.00 $18.00 $19.00 $21.00 $24.00 $27.00 $31.50 $32.00 $33.00 Burbank Amtrak $32.00 $21.00 $16.00 $14.50 $0.00 $15.00 $15.50 $16.00 $16.50 $17.00 $18.00 $19.00 $21.00 $24.00 $27.00 $31.00 $31.50 $32.00 Glendale $37.00 $26.50 $20.50 $15.00 $15.00 $0.00 $15.00 $15.50 $16.00 $16.50 $17.00 $19.00 $20.50 $23.00 $26.50 $26.50 $31.50 $31.50 Los Angeles Union Station $37.00 $26.50 $20.50 $16.00 $15.50 $15.00 $0.00 $15.00 $15.50 $16.00 $16.50 $19.00 $20.00 $22.00 $26.00 $30.00 $30.50 $31.00 Huntington Park/Bell/Maywood/Vernon $20.00 $27.00 $21.00 $16.50 $16.00 $15.50 $15.00 $0.00 $15.00 $15.50 $16.00 $18.00 $19.50 $20.00 $25.50 $29.00 $29.50 $30.50 SouthGate/Cudahy $21.00 $27.50 $21.50 $16.50 $16.50 $16.00 $15.50 $15.00 $0.00 $15.00 $16.00 $17.00 $19.00 $23.00 $25.00 $28.50 $30.00 $30.50 Downey/Paramount $22.00 $28.00 $22.00 $17.00 $17.00 $16.50 $16.00 $15.50 $15.00 $0.00 $15.00 $16.00 $18.50 $21.50 $23.00 $28.00 $29.00 $29.00 Bellflower $43.50 $29.00 $24.00 $18.00 $18.00 $17.00 $16.50 $16.00 $16.00 $15.00 $0.00 $15.00 $17.00 $20.00 $22.00 $27.00 $28.00 $28.00 Artesia/Cerritos $44.00 $30.00 $25.00 $19.00 $19.00 $19.00 $19.00 $18.00 $17.00 $16.00 $15.00 $0.00 $16.00 $19.00 $21.00 $26.00 $27.00 $27.00 Cypress $45.00 $32.00 $27.00 $21.00 $21.00 $20.50 $20.00 $19.50 $19.00 $18.50 $17.00 $16.00 $0.00 $18.00 $20.00 $25.00 $25.50 $26.00 Stanton $46.00 $34.00 $30.00 $24.00 $24.00 $23.00 $23.00 $20.00 $23.00 $21.50 $20.00 $19.00 $18.00 $0.00 $19.00 $21.00 $22.00 $24.00 Anaheim $47.00 $37.50 $32.00 $27.00 $27.00 $26.50 $26.00 $25.50 $25.00 $23.00 $22.00 $21.00 $20.00 $19.00 $0.00 $19.00 $19.50 $20.00 Santa Ana $47.00 $42.50 $36.50 $31.50 $31.00 $26.50 $30.00 $29.00 $28.50 $28.00 $27.00 $26.00 $25.00 $21.00 $19.00 $0.00 $15.00 $15.50 Tustin $47.00 $43.00 $37.00 $32.00 $31.50 $31.50 $30.50 $29.50 $30.00 $29.00 $28.00 $27.00 $25.50 $22.00 $19.50 $15.00 $0.00 $15.00 Irvine ITC $47.00 $43.50 $37.00 $33.00 $32.00 $31.50 $31.00 $30.50 $30.50 $29.00 $28.00 $27.00 $26.00 $24.00 $20.00 $15.50 $15.00 $0.00 APPENDIX VI-6

ORANGELINE HIGH SPEED MAGLEV STATION-TO-STATION TRIPS AVERAGE DAILY RIDERSHIP WITHOUT TRANSIT ORIENTED DEVELOPMENT

First Leg "Walk" - Daily (O-D Format)

Huntington Los Angeles Santa San Burbank Burbank Park/Bell/Ma SouthGate/ Downey/Par Artesia/Cerri Palmdale Glendale Union BellFlower Cypress Stanton Anahiem Santa Ana Tustin Irvine ITC Clarita Fernando Airport Amtrak ywood/Vern Cudahy amount tos TOTAL Station on

Palmdale 017149453132500421126327844832 Santa Clarita 170150402926300319022215332600 San Fernando 149 150 0 302 272 303 1,596 34 166 9 18 32 12 12 21 16 13 10 3,111 Burbank Airport 45 40 302 0 238 228 1,175 29 123 6 12 25 10 7 14 7 7 6 2,271 Burbank Amtrak 31 29 272 238 0 221 1,872 36 171 8 17 35 15 12 26 15 12 10 3,017 Glendale 32 26 303 228 221 0 864 23 99 5 11 21 10 8 15 8 6 6 1,881 Los Angeles Union Station 500 300 1,596 1,175 1,872 864 0 1,241 2,903 380 694 998 562 477 957 451 308 290 15,562 Huntington Park/Bell/Maywood/Vernon 4 3 34 29 36 23 1,241 0 100 22 45 71 42 30 59 41 24 20 1,820 SouthGate/Cudahy 21 19 166 123 171 99 2,903 100 0 117 254 347 342 261 460 388 238 210 6,214 Downey/Paramount 1096853802211704659382644281715818 BellFlower 2 2 18 12 17 11 694 45 254 46 0 186 143 96 169 75 52 45 1,864 Artesia/Cerritos 6 2 32 25 35 21 998 71 347 59 186 0 299 167 290 169 128 107 2,940 Cypress 3 2 12 10 15 10 562 42 342 38 143 299 0 97 177 78 71 64 1,962 Stanton 2 1 12 7 12 8 477 30 261 26 96 167 97 0 126 77 89 108 1,593 Anahiem 7 5 21 14 26 15 957 59 460 44 169 290 177 126 0 251 361 398 3,377 Santa Ana 8 3 16 7 15 8 451 41 388 28 75 169 78 77 251 0 23 103 1,737 Tustin 4 3 13 7 12 6 308 24 238 17 52 128 71 89 361 23 0 186 1,538 Irvine ITC 4 2 10 6 10 6 290 20 210 15 45 107 64 108 398 103 186 0 1,580 TOTAL 832 600 3,111 2,271 3,017 1,881 15,562 1,820 6,214 818 1,864 2,940 1,962 1,593 3,377 1,737 1,538 1,580 52,711

First Leg "Auto" - Daily (O-D Format)

Palmdale 0 100 1,552 495 400 350 9,464 49 377 10 30 88 49 26 87 119 71 49 13,311 Santa Clarita 100 0 1,144 416 351 284 6,303 34 229 6 20 41 21 14 42 37 25 14 9,078 San Fernando 1,552 1,144 0 689 375 325 3,219 79 127 62 15 24 14 12 22 21 17 14 7,706 Burbank Airport 495 416 689 0 619 330 2,522 90 45 64 13 16 14 14 22 22 14 11 5,391 Burbank Amtrak 400 351 375 619 0 653 4,254 118 157 71 24 45 24 16 42 36 28 21 7,231 Glendale 350 284 325 330 653 0 3,665 193 213 59 36 70 36 32 76 64 40 43 6,466 Los Angeles Union Station 9,464 6,303 3,219 2,522 4,254 3,665 0 3,192 2,026 5,804 992 900 769 826 913 232 713 417 46,206 Huntington Park/Bell/Maywood/Vernon 49 34 79 90 118 193 3,192 0 71 160 61 71 50 47 85 75 47 38 4,456 SouthGate/Cudahy 377 229 127 45 157 213 2,026 71 0 202 237 202 130 112 176 133 138 92 4,662 Downey/Paramount 10 6 62 64 71 59 5,804 160 202 0 157 563 315 251 565 630 336 309 9,561 BellFlower 30 20 15 13 24 36 992 61 237 157 0 140 145 110 165 133 102 73 2,449 Artesia/Cerritos 88 41 24 16 45 70 900 71 202 563 140 0 142 147 192 138 156 105 3,038 Cypress 49 21 14 14 24 36 769 50 130 315 145 142 0 99 215 121 123 82 2,345 Stanton 26 14 12 14 16 32 826 47 112 251 110 147 99 0 353 271 142 147 2,616 Anahiem 87 42 22 22 42 76 913 85 176 565 165 192 215 353 0 466 466 476 4,360 Santa Ana 119 37 21 22 36 64 232 75 133 630 133 138 121 271 466 0 76 335 2,905 Tustin 71 25 17 14 28 40 713 47 138 336 102 156 123 142 466 76 0 321 2,811 Irvine ITC 49 14 14 11 21 43 417 38 92 309 73 105 82 147 476 335 321 0 2,542 TOTAL 13,311 9,078 7,706 5,391 7,231 6,466 46,206 4,456 4,662 9,561 2,449 3,038 2,345 2,616 4,360 2,905 2,811 2,542 137,130

Home Based Ridership without TOD 189,841 Added Airport Related Trips (8%) 15,187 Added Induced Trips (4%) 7,594 Added Special Events Trips (1%) 1,898 TOTAL HORIZON YEAR RIDERSHIP WITHOUT TOD 214,520 APPENDIX VI-7

ORANGELINE HIGH SPEED MAGLEV STATION-TO-STATION TRIPS AVERAGE DAILY RIDERSHIP WITH TRANSIT ORIENTED DEVELOPMENT (Alternative 1a)

First Leg "Walk" - Daily (O-D Format)

Palmdale 0201546445364964232364281363885 Santa Clarita 200191614232335321224215933732 San Fernando 154 191 0 624 436 367 1,740 37 167 20 20 34 12 10 24 33 15 9 3,889 Burbank Airport 64 61 624 0 550 421 1,646 38 160 16 17 32 11 10 16 20 7 6 3,695 Burbank Amtrak 45 42 436 550 0 326 2,517 49 226 20 26 44 19 16 31 37 14 12 4,406 Glendale 36 32 367 421 326 0 852 24 88 10 12 20 9 8 13 16 5 6 2,240 Los Angeles Union Station 496 335 1,740 1,646 2,517 852 0 1,402 3,007 781 775 1,118 620 492 995 1,087 334 258 18,452 Huntington Park/Bell/Maywood/Vernon 4 3 37 38 49 24 1,402 0 122 79 58 88 49 33 67 87 27 21 2,185 SouthGate/Cudahy 23 21 167 160 226 88 3,007 122 0 444 303 444 380 266 474 711 245 183 7,260 Downey/Paramount 2 2 20 16 20 10 781 79 444 0 127 159 80 50 84 83 25 18 1,994 BellFlower 3 2 20 17 26 12 775 58 303 127 0 264 184 119 196 193 57 43 2,392 Artesia/Cerritos 6 4 34 32 44 20 1,118 88 444 159 264 0 426 220 356 444 143 103 3,902 Cypress 4 2 12 11 19 9 620 49 380 80 184 426 0 185 264 253 85 67 2,646 Stanton 2 1 10 10 16 8 492 33 266 50 119 220 185 0 218 273 104 103 2,106 Anahiem 8 5 24 16 31 13 995 67 474 84 196 356 264 218 0 1,171 465 367 4,750 Santa Ana 13 9 33 20 37 16 1,087 87 711 83 193 444 253 273 1,171 0 538 518 5,482 Tustin 6 3 15 7 14 5 334 27 245 25 57 143 85 104 465 538 0 194 2,263 Irvine ITC 33961262582118318431036710336751819401,909 TOTAL 885 732 3,889 3,695 4,406 2,240 18,452 2,185 7,260 1,994 2,392 3,902 2,646 2,106 4,750 5,482 2,263 1,909 71,184

First Leg "Auto" - Daily (O-D Format)

Palmdale 0 106 1,474 691 539 407 8,765 50 349 27 33 84 47 25 93 199 69 42 12,996 Santa Clarita 106 0 1,253 656 537 350 6,220 36 220 21 21 47 21 16 41 72 23 15 9,653 San Fernando 1,474 1,253 0 991 580 378 3,017 76 115 68 13 24 13 10 21 38 17 12 8,098 Burbank Airport 691 656 991 0 1,209 551 2,954 139 71 109 20 24 19 16 30 47 18 12 7,554 Burbank Amtrak 539 537 580 1,209 0 1,013 4,761 177 169 131 33 51 27 24 47 68 32 22 9,417 Glendale 407 350 378 551 1,013 0 4,228 237 205 90 39 68 37 30 75 115 40 43 7,902 Los Angeles Union Station 8,765 6,220 3,017 2,954 4,761 4,228 0 4,004 2,080 5,770 1,100 898 828 788 981 840 711 388 48,329 Huntington Park/Bell/Maywood/Vernon 50 36 76 139 177 237 4,004 0 83 206 81 95 65 53 103 161 58 42 5,663 SouthGate/Cudahy 349 220 115 71 169 205 2,080 83 0 329 332 255 162 118 202 258 146 89 5,178 Downey/Paramount 27 21 68 109 131 90 5,770 206 329 0 117 658 336 260 574 964 342 264 10,262 BellFlower 33 21 13 20 33 39 1,100 81 332 117 0 132 180 114 190 248 110 68 2,827 Artesia/Cerritos 84 47 24 24 51 68 898 95 255 658 132 0 195 175 237 288 170 99 3,497 Cypress 47 21 13 19 27 37 828 65 162 336 180 195 0 120 269 281 141 80 2,818 Stanton 25 16 10 16 24 30 788 53 118 260 114 175 120 0 417 613 151 145 3,072 Anahiem 93 41 21 30 47 75 981 103 202 574 190 237 269 417 0 867 511 455 5,109 Santa Ana 199 72 38 47 68 115 840 161 258 964 248 288 281 613 867 0 376 761 6,194 Tustin 69 23 17 18 32 40 711 58 146 342 110 170 141 151 511 376 0 316 3,227 Irvine ITC 42 15 12 12 22 43 388 42 89 264 68 99 80 145 455 761 316 0 2,849 TOTAL 12,996 9,653 8,098 7,554 9,417 7,902 48,329 5,663 5,178 10,262 2,827 3,497 2,818 3,072 5,109 6,194 3,227 2,849 154,639

Home Based Ridership without TOD 225,823 Added Airport Related Trips (8%) 18,066 Added Induced Trips (4%) 9,033 Added Special Events Trips (1%) 2,258 TOTAL HORIZON YEAR RIDERSHIP WITH TOD 255,180 Average Base Year Opening Day Ridership 172,260 (67.5% of Horizon Year) Attachment 2

December 15, 2006 letter to Scott A. Larsen from William D. Bronte, Chief, Division of Rail, California Department of Transportation. . .-- STATE OF CALIFORNIA-BUSN!3S. TRANSPORTATlOor DEPARTMENT OF TRANSPORTATION DIVISION OF RAIL 1 120 N STREET P. 0. BOX 942874 - MS 74 SACRAMENTO, CA 94274-000 1 Flex your power! PHONE (916) 654-6542 Be energy efficient! FAX (916) 653-4565 TTY (916) 651-6827

December 15,2006

Mr. Scott A. Larsen, Chairman Orangeline Development Authority 16401 Paramount Boulevard Paramount, CA 90723

Dear Mr. Larsen:

This is in response to your November 21,2006, letter to Will Kempton, Director of the California Department of Transportation (Department), transmitting the Orangeline Development Authority's (Authority) application for $200 million to complete pre-construction engineering for the High Speed Maglev Corridor Development Project. The requested source of that funding is from the recently enacted Infrastructure Bond Program (Proposition 1B). Director Kempton asked that I respond to your letter.

The Department is interested in finding new and innovative solutions to improving mobility, enhancing the environment, and encouraging efficient land use patterns. The apparent success of the maglev system in Shanghai demonstrates the viability of the technology. As envisioned, the Orangeline Corridor project also appears to have the potential to help address a number of transportation-related challenges including air quality and efficient land use.

Although the technology and the project both appear to have great potential, finding funding to make that potential a reality will be problematic. California has suffered from decades of underinvestment in its transportation infrastructure. The resulting traffic congestion has negatively affected California's economy and quality of life. The Governor's Strategic Growth plan and Proposition 1B is a down payment on reversing that underinvestment. The Proposition's initial thrust is on projects which can be delivered quickly and which have a demonstrable impact on traffic congestion.

Proposition 1B contains a variety of funding programs. Almost all the programs have qualifications attached to them on as to how .the funds are to be allocated, who can apply for funding, the type of projects that can be funded, set timelines within which funds must be expended, or require non-state matching funds. These requirements effectively preclude the Orangeline High Speed Maglev Corridor Development Project qualifying for infrastructure bond funds.

"CaItraw improves mobility across California " Mr. Scott A. Larsen, Chairman December 15,2006 Page 2

Those bond programs, whose funds are not allocated by formula, require either the Regional Planning Agency to be the applicant or have the concurrence of the Regional Planning Agency. I would encourage the Authority, working through its member agencies, to have the Project programmed in the Regional Transportation Plans of both Los Angeles and Orange Counties.

Finally, I would also encourage the Authority to find a way to restructure its expenditure plan to reduce the amount of funding required at any single point. The $200 million requested constitutes 40 percent of the State's or 60 percent of the Los Angeles County's discretionary funding (funding allocated to augment the 2006 State Transportation Improvement Program) contained in the Proposition. This would seriously Emit the State and the County's ability to fund other high priority projects. Section 5.4 of the Milestone 10 Financial Plan attached to your application alludes to taking a "progressive approach ..." I would encourage that approach.

We believe maglev technology will have a place in California's transportation future. It is unfortunate that thek is not currently sufficient transportation funding to further develop and refine its role. We look forward to continuing to work with the Authority and its partners in exploring how maglev technology fits into California's transportation future.

If you have any questions or if you would like to discuss further, please do not hesitate to let me know.

Sincerely, &*3 WILLIAM D. BRONT Chief Division of Rail c: Mr. Albert Perdon Orangeline Development Authority 1640 1 Paramount Boulevard Paramount, CA 90723

"Caltransimproves mobiliry across California"

ORANGELINE DEVELOPMENT AUTHORITY

City of Artesia DATE: February 14, 2007 City of Bell

City of Bellflower SUBJECT: Report on Agreement with Los Angeles County MTA to City of Cerritos secure use of public rights-of-way for the Orangeline City of Cudahy

City of Downey High Speed Maglev

City of Huntington Park

City of Los Alamitos RECOMMENDATION

City of Maywood

City of Palmdale That the Board consider and discuss the information provided in this report and in

City of Paramount the staff presentation and provide direction to staff.

City of Santa Clarita

City of South Gate DISCUSSION

City of Vernon Over the past several months, staff has communicated with representatives of the

Chairman Los Angeles County Metropolitan Transportation Authority (MTA) regarding the Authority’s use of the rights-of-way owned by the MTA. As a result of these Scott A. Larsen Councilmember, discussions, MTA has invited the Authority to make a formal proposal regarding its City of Bellflower interest in acquiring the rights-of-way or acquiring usage rights to the rights-of-way Vice Chairman needed for the Orangeline High Speed Maglev project. MTA staff has indicated they Vacant would welcome such a proposal, which they would review and which could lead to a Secretary formal agreement whereby the Authority would be granted the ownership or usage

Gary Milliman rights needed to build and operate the Orangeline High Speed Maglev project. City Manager, City of South Gate The Authority is aware that the MTA owns the former Pacific Electric right-of-way General Counsel from Paramount to the Orange County Line that runs diagonally through the Michael Colantuono Colantuono & Levin, PC following Authority member cities: Paramount, Bellflower, Artesia and Cerritos.

Treasurer/Auditor These cities are currently pursuing a project to landscape the right-of-way and construct a bike path/walking trail for transportation and recreational purposes. The Jack Joseph Gateway Cities COG Authority has been working with these cities and the Gateway Cities Council of

Executive Director Governments to ensure that the proposed improvements are consistent with the

Albert Perdon, P.E. design concept for the Orangeline High Speed Maglev project.

The Authority understands that the MTA owns additional rights-of-way along the Supporting Agencies proposed Orangeline High Speed Maglev corridor. Staff is preparing a proposal for Gateway Cities Council of Governments submittal to the MTA which will describe the Authority’s interests in securing MTA

Southern California rights-of-way for the project. Staff believes that the transfer of rights-of-way or the Association of Governments granting of usage rights will ultimately require approval of the MTA Board; thus, this City of Garden Grove represents a policy decision that must be supported by the Board and the effected City of Huntington Beach member cities. City of Long Beach

City of Stanton Authority staff is having on-going discussions with MTA staff to move this issue forward expeditiously.

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

ORANGELINE DEVELOPMENT AUTHORITY

City of Artesia DATE: February 14, 2007 City of Bell

City of Bellflower SUBJECT: Presentation of New Logo and Stationery Design City of Cerritos

City of Cudahy

City of Downey RECOMMENDATION

City of Huntington Park

City of Los Alamitos That the Board consider the information in this report and the presentation by

City of Maywood ARCADIS Team member MBI Media regarding new logo and stationery design and

City of Palmdale provide direction to staff.

City of Paramount

City of Santa Clarita DISCUSSION

City of South Gate

City of Vernon The Board approved a new project logo proposed by ARCADIS Team member MBI Media at its meeting of October 11, 2006. The Board requested that MBI Media Chairman present alternatives for incorporating the new logo in stationery, business cards and Scott A. Larsen other presentation and informational material. Councilmember, City of Bellflower

Vice Chairman MBI Media developed three alternatives that were presented at the Board Special

Vacant Meeting of January 17, 2006. The design concepts are attached for the Board’s review and direction. Based on comments received at the January 17th meeting, MBI Secretary Media developed refined concepts for the Board’s consideration. These design Gary Milliman City Manager, concepts are shown in Attachment 2 City of South Gate

General Counsel ATTACHMENTS

Michael Colantuono Colantuono & Levin, PC 1. Design concepts (3) for new logo and stationery Treasurer/Auditor 2. Refined concepts for new logo and stationery Jack Joseph Gateway Cities COG

Executive Director

Albert Perdon, P.E.

Supporting Agencies

Gateway Cities Council of Governments

Southern California Association of Governments

City of Garden Grove

City of Huntington Beach

City of Long Beach

City of Stanton

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org Attachment 1

Design Concepts (3) for new logo and stationary Orangeline Development Authority

16401 Paramount Boulevard, Paramount, California 90723 T: 310.871.1113 • F: 562.924.0152

Version 1

Orangeline Development Authority

16401 Paramount Boulevard, Paramount, California 90723

www.orangeline.calmaglev.org

Orangeline Development Authority

AlbertOrangeline Perdon 16401 Paramount Boulevard, DevelopmentExecutive Director Paramount, California 90723 Authority T: 310.871.1113 F: 562.924.0152 E: [email protected] www.orangeline.calmaglev.org Version 2 (Letterhead)

Orangeline Development Authority

16401 Paramount Blvd., Paramount, CA 90723 T: 310.871.1113 F: 562.924.0152

T: 310.871.1113 F: 562.924.0152 www.orangeline.calmaglev.org Version 2 (Envelope and Business Card - Front and Back)

Orangeline Development Authority

Albert Perdon Executive Director

[email protected]

16401 Paramount Boulevard, Paramount, CA 90723

Orangeline Development Authority

www.orangeline.calmaglev.org

16401 Paramount Blvd., Paramount, CA 90723

T: 310.871.1113 F: 562.924.0152 16401 Paramount Boulevard, Paramount, California 90723

Version 3

T: 310.871.1113 | F: 562.924.0152 | W: www.orangeline.calmaglev.org

ALBERT PERDON EXECUTIVE DIRECTOR ORANGELINE DEVELOPMENT AUTHORITY

www.orangeline.calmaglev.org 16401 Paramount Boulevard Paramount, California 90723 T: 310.871.1113 F: 562.924.0152 E: [email protected] Version 3

16401 Paramount Boulevard Paramount, California 90723

ORANGELINE DEVELOPMENT AUTHORITY www.orangeline.calmaglev.org Attachment 2

Refined concepts for new logo and stationery Orangeline Development Authority

16401 Paramount Blvd. Paramount, CA 90723 T: 310.871.1113 F: 562.924.0152

Participating Cities: City of Artesia City of Bell City of Bellflower City of Cerritos City of Cudahy City of Downey City of Huntington Park City of Los Alamitos City of Maywood City of Palmdale City of Paramount City of Santa Clarita City of South Gate City of Vernon

www.orangeline.calmaglev.org Orangeline Development Authority

16401 Paramount Blvd. Paramount, CA 90723 16401 Paramount Boulevard, Paramount, CA 90723 ALBERT PERDON EXECUTIVE DIRECTOR

16401 Paramount Boulevard Paramount, CA 90723 T: 310.871.1113 F: 562.924.0152 E: [email protected] (Letterhead)

Orangeline Development Authority

16401 Paramount Blvd. Paramount, CA 90723 T: 310.871.1113 F: 562.924.0152

www.orangeline.calmaglev.org (Envelope and Business Card)

Orangeline Development Authority

16401 Paramount Blvd. Paramount, CA 90723

16401 Paramount Boulevard, Paramount, CA 90723

ALBERT PERDON EXECUTIVE DIRECTOR

16401 Paramount Boulevard Paramount, CA 90723 T: 310.871.1113 F: 562.924.0152 E: [email protected]

ORANGELINE DEVELOPMENT AUTHORITY

City of Artesia DATE: February 14, 2007 City of Bell

City of Bellflower SUBJECT: Report on Caltrans Pre-award Audit City of Cerritos

City of Cudahy

City of Downey RECOMMENDATION

City of Huntington Park

City of Los Alamitos That the Board consider and discuss the information provided in this report and in

City of Maywood the staff presentation and provide direction to staff.

City of Palmdale

City of Paramount DISCUSSION

City of Santa Clarita

City of South Gate Early in 2006, staff contacted Caltrans to discuss the development of a funding

City of Vernon agreement to enable the Authority to secure the $250,000 earmarked in SAFTEA-LU, the federal transportation reauthorization bill, for the Orangeline High Speed Maglev Chairman project. Scott A. Larsen Councilmember, City of Bellflower Caltrans indicated that before the Authority can serve as a federal grantee, it must

Vice Chairman comply with Caltrans audit requirements and a pre-award audit must be completed.

Vacant Caltrans requirements for federal grantees include financial reporting and financial management procedures, as well as program management procedures. Secretary

Gary Milliman City Manager, In order to meet the state requirements, it was necessary for the Authority to City of South Gate establish its own financial system, independent of the Gateway Cities Council of General Counsel Government’s financial system, which the Authority had used since its inception.

Michael Colantuono The Authority was also required to demonstrate the workings of its financial Colantuono & Levin, PC reporting and management system over a period of time to demonstrate to Caltrans Treasurer/Auditor auditors that the Authority could meet state requirements. Jack Joseph Gateway Cities COG On December 22, 2006, the Authority’s Treasurer transmitted the requested pre- Executive Director award audit information to Caltrans. An on-site visit by the Caltrans was scheduled Albert Perdon, P.E. for January 31st and then rescheduled for February 9th. It will take about 30 days after the on-site review for Caltrans to complete its audit report. The development Supporting Agencies of a funding agreement between Caltrans and the Authority can proceed after all Gateway Cities Council of Governments audit issues, if any, are resolved.

Southern California Association of Governments Staff will keep the Board apprised of progress in securing the earmarked federal City of Garden Grove funding. It is anticipated that the funding agreement, once approved by Caltrans, City of Huntington Beach will be brought to the Board for approval. City of Long Beach

City of Stanton

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

ORANGELINE DEVELOPMENT AUTHORITY

City of Artesia DATE: February 14, 2007 City of Bell

City of Bellflower SUBJECT: Report on Member Agency approval of Milestone City of Cerritos 7 Station Area Development Recommendations City of Cudahy

City of Downey

City of Huntington Park RECOMMENDATION

City of Los Alamitos

City of Maywood That the Board consider and discuss the information provided in this report and in

City of Palmdale the staff presentation and provide direction to staff.

City of Paramount

City of Santa Clarita DISCUSSION

City of South Gate

City of Vernon At its meeting of August 9, 2006, the Board adopted a resolution to approve the Milestone 7 – Orangeline Maglev Station Area Development Report. The resolution Chairman included a recommendation that the Authority’s member agencies undertake a Scott A. Larsen program to review and update their land use plans, including their General Plan, to Councilmember, City of Bellflower incorporate the policy recommendations contained in the Milestone 7 report that

Vice Chairman each member city believes are appropriate for their community.

Vacant The adoption of the Authority’s recommendations by each member agency is an Secretary important prerequisite for securing private funding for the Orangeline High Speed Gary Milliman City Manager, Maglev project. Actions by the Authority’s member cities supporting the Milestone 7 City of South Gate recommendations demonstrate a strong commitment of each city toward advancing General Counsel the project.

Michael Colantuono Colantuono & Levin, PC To date, three cities have adopted resolutions in support of the Authority’s Milestone Treasurer/Auditor 7 recommendations. These cities are, in order of adoption of their resolution: Jack Joseph Gateway Cities COG 1. Santa Clarita Executive Director 2. South Gate Albert Perdon, P.E. 3. Bellflower

Supporting Agencies Board members of the Authority’s remaining member agencies are encouraged to Gateway Cities Council of Governments discuss the adoption of similar resolutions with their City Managers and fellow City

Southern California Council members. The resolutions will be a key part of the information package Association of Governments provided to potential investors. City of Garden Grove

City of Huntington Beach

City of Long Beach

City of Stanton

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

ORANGELINE DEVELOPMENT AUTHORITY

City of Bell SUBJECT: Resolution of the Board of Directors of the City of Bellflower Orangeline Development Authority to approve out- City of Cerritos of-state travel by the Board Chairman and Executive City of Cudahy Director to meet with potential private sector City of Downey investors and federal Department of Transportation City of Huntington Park

City of Los Alamitos officials

City of Maywood

City of Palmdale RECOMMENDATION

City of Paramount That the Board adopt the attached Resolution: City of Santa Clarita

City of South Gate A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGELINE City of Vernon DEVELOPMENT AUTHORITY TO APPROVE OUT-OF-STATE TRAVEL

Chairman BY THE BOARD CHAIRMAN AND EXECUTIVE DIRECTOR TO MEET WITH POTENTIAL PRIVATE SECTOR INVESTORS AND FEDERAL Scott A. Larsen Councilmember, DEPARTMENT OF TRANSPORTATION OFFICIALS City of Bellflower

Vice Chairman DISCUSSION

Vacant

Secretary With completion of the Milestone 10 report and its adoption by the Board, the

Gary Milliman Authority’s primary efforts now shift to securing funding for Phase 2 Preliminary City Manager, Engineering. City of South Gate

General Counsel Two primary sources of funding have been identified for the next program Michael Colantuono Colantuono & Levin, PC development phase: public funding, such as state bond funding or federal transportation funding, and private sector funds, including hedge funds, equity Treasurer/Auditor participation and other financing instruments. The Milestone 10 report serves as Jack Joseph Gateway Cities COG a key part of the presentation to potential public and private investors, along with

Executive Director other written documents and presentation material prepared by the Authority and ARCADIS. Albert Perdon, P.E.

Supporting Agencies Printed material alone will not be sufficient to secure funding from either public or

Gateway Cities Council private sources. The Authority must be prepared to meet with potential public of Governments and private investors and take the initiative to schedule meetings and attract

Southern California investor interest in the project. Association of Governments

City of Garden Grove

City of Huntington Beach The primary sources of private funding in the U.S. are the investment banking

City of Long Beach establishments located in east coast cities such as the City of New York. Federal

City of Stanton funding is controlled largely by U.S. Department of Transportation officials in Washington, D.C. To be successful in getting the attention and ultimately the

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

Resolution authorizing out-of-state travel February 14, 2007 Page 2 of 2 confidence of both public and private investors, it will be necessary for the Authority Board Chairman or his designee and Executive Director to travel out-of-state to meet with key representatives of public agencies and private investment entities.

Activities are well underway to secure funding from the State of California. Initial meetings have been held and additional meetings will be scheduled, beginning later this month and in the following months. Discussions are also underway with private entities. Parallel efforts must be initiated at the federal level and with key private investment sources.

Board adoption of the proposed resolution will enable staff to schedule meetings with appropriate individuals for the purpose of securing funding support for the project.

ATTACHMENT

1. A Resolution of the Board of Directors of the Orangeline Development Authority to approve out-of-state travel by the Board Chairman and Executive Director to meet with potential private sector investors and federal Department of Transportation officials

RESOLUTION NO. 07-03

RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGELINE DEVELOPMENT AUTHORITY TO APPROVE OUT-OF- STATE TRAVEL BY THE BOARD CHAIRMAN AND EXECUTIVE DIRECTOR TO MEET WITH POTENTIAL PRIVATE SECTOR INVESTORS AND FEDERAL DEPARTMENT OF TRANSPORTATION OFFICIALS

WHEREAS, the Board of Directors has given careful consideration to the report regarding the necessity for out-of-state travel for the Board Chairman and Executive Director at the regular meeting of February 14, 2006;

NOW, THEREFORE, the Board of Directors of the Orangeline Development Authority does hereby resolve as follows:

SECTION 1. The Board of Directors approves expenditure of Authority funds to cover reimbursable expenses, in accordance with Authority expense reimbursement policies, for the Board Chairman or his designee and Executive Director to travel out-of-state to meet with key federal Department of Transportation officials in Washington, D.C. and with private East Coast-based private investment firms.

SECTION 2. Total expenditures authorized for reimbursement shall not exceed $6,000 per traveler or $12,000 in total.

The Secretary shall certify to the adoption of this Resolution.

APPROVED AND ADOPTED this 14th day of February 2007.

______SCOTT A. LARSEN, Chairman ATTEST:

______GARY MILLIMAN, Secretary

AYES: Board Members: NOES: Board Members: ABSENT: Board Members:

______GARY MILLIMAN, Secretary

ORANGELINE DEVELOPMENT AUTHORITY

City of Bell SUBJECT: Approval of Warrant Register City of Bellflower

City of Cerritos RECOMMENDATION City of Cudahy

City of Downey That the Board approve the Warrant Registers for the following periods: City of Huntington Park

City of Los Alamitos 1. November 9, 2006 through December 11, 2006

City of Maywood 2. December 12, 2006 through January 17, 2007

City of Palmdale 3. January 18, 2007 through February 9, 2007.

City of Paramount

City of Santa Clarita

City of South Gate ATTACHMENTS:

City of Vernon 1. Warrant Register for November 9, 2006 through December 11, 2006 Chairman 2. Warrant Register for December 12, 2006 through January 17, 2007

Scott A. Larsen 3. Warrant Register for January 18, 2007 through February 9, 2007 Councilmember, City of Bellflower

Vice Chairman

Vacant

Secretary

Gary Milliman City Manager, City of South Gate

General Counsel

Michael Colantuono Colantuono & Levin, PC

Treasurer/Auditor

Jack Joseph Gateway Cities COG

Executive Director

Albert Perdon, P.E.

Supporting Agencies

Gateway Cities Council of Governments

Southern California Association of Governments

City of Garden Grove

City of Huntington Beach

City of Long Beach

City of Stanton

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

Attachment 1

Attachment 2

12/12/2006 Through 1/17/2007

Attachment 3

ORANGELINE DEVELOPMENT AUTHORITY

City of Bell SUBJECT: Communications to the Board City of Bellflower

City of Cerritos RECOMMENDATION City of Cudahy

City of Downey That the Board review and discuss the information provided; and receive and file City of Huntington Park

City of Los Alamitos this report.

City of Maywood

City of Palmdale INFORMATION ITEMS

City of Paramount

City of Santa Clarita Treasurer’s Report

City of South Gate

City of Vernon The Treasurer’s Reports for November and December 2006, and for January 2007 are shown in Attachments 1, 2 and 3. The status of Fiscal Year 2006-2007 Chairman Member contributions is shown in Attachment 4.

Scott A. Larsen Councilmember, City of Bellflower Meetings

Vice Chairman The Executive Director participated in the following meetings: Vacant • Sacramento – November 21 2006; meetings with ARCADIS Secretary representatives and Jim Bourgard, Deputy Secretary, California Business, Gary Milliman City Manager, Transportation & Housing Agency, Gregg Albright, Deputy Director, California City of South Gate Department of Transportation, and John Barna, Jr., Executive Director, General Counsel California Transportation Commission.

Michael Colantuono • Port of Los Angeles – November 2006; meeting with Sue Lai to discuss Colantuono & Levin, PC Orangeline Maglev and freight potential. Treasurer/Auditor • Long Beach – November 2006; attended Senator Lowenthal community Jack Joseph Gateway Cities COG meeting on transportation issues. • USC – November 2006; attended conference on bond funding; met with Executive Director Mark Pisano, SCAG, and other community leaders. Albert Perdon, P.E. • Urban Land Institute – December 5, 2006; attended conference on emerging real estate trends; spoke with several community leaders. Supporting Agencies • Glendale – December 21; meetings with Kirk Cartozian, CTC Gateway Cities Council of Governments Commissioner Larry Zarian, City Council Member Ara Najarian and

Southern California ARCADIS Team Member representative Perry Maljian and with Jim Association of Governments Starbird, Glendale City Manager. City of Garden Grove • League of Cities – January 4, 2007; attended meeting on congestion City of Huntington Beach mitigation fee; spoke briefly with LA Council Member Wendy Greuel. City of Long Beach • Gateway Cities COG – January 18, 2007; presentation with Reed Tanger City of Stanton of TRI International-USA on the Authority-TRI Freight Maglev study.

[email protected] ▪ Phone 310.871.1113 ▪ Fax 562.924.0152 16401 Paramount Boulevard ▪ Paramount ▪ California 90723 ▪ USA ▪ www.orangeline.calmaglev.org

Communications to the Board February 14, 2007 Page 2 of 2

• Congresswoman Sanchez – January 19, 2007; meeting with Patrick Rodriguez, new district representative, on project overview. • State Capitol – January 21-23, 2007; meetings with various State Legislators, including Senator George Runner, Assembly Members Sharon Runner, Hector De La Torre and Tony Mendez, and with Caltrans officials, to discuss the CTC Proposal/Application and provide an update on the project. • SCAQMD – January 26, 2007; conference on goods movement and alternative maglev freight technologies. • Senator Lowenthal – February 2, 2007; meeting with Scott Larsen to discuss project status and CTC Proposal/Application. • Intermodal Infrastructure-Goods Movement – February 7, 2007; panel presentation by representatives of Port of Long Beach, Alameda Corridor East, Union Pacific Railroad and Burlington Northern Santa Fe Railroad. • Los Alamitos – February 8, 2007; meeting with Scott Larsen, Troy Edgar and Dean Gross to provide project background • Caltrans – February 9, 2007; meeting Jack Joseph, John Craig and Caltrans auditor to discuss pre-award audit. • SCAQMD – February 14, 2007; meeting with Peter Greenwald. • Clean Air Conference – February 26-28, 2007; Long Beach. • State Senate Transportation & Housing Committee – February 2007; meeting with Committee Consultant

ATTACHMENTS 1. Treasurer’s November 2006 Report 2. Treasurer’s December 2006 Report 3. Treasurer’s January 2007 Report 4. Fiscal Year 2006-07 Member Contributions

ATTACHMENT 1

TREASURER'S REPORT ORANGELINE DEVELOPMENT AUTHORITY November 2006

Beginning Cash Balance (11-1-06) $273,447.20

Cash Receipts 16,494.31

Cash Expenditures (31,836.47)

Ending Cash Balance (11-30-06) $258,105.04

______Jack M. Joseph Treasurer

Attachment 2

TREASURER'S REPORT ORANGELINE DEVELOPMENT AUTHORITY December 2006

Beginning Cash Balance (12-1-06) $258,105.04

Cash Receipts 31,388.58

Cash Expenditures (71,362.22)

Ending Cash Balance (12-31-06) $218,131.40

______Jack M. Joseph Treasurer

Attachment 3

TREASURER'S REPORT ORANGELINE DEVELOPMENT AUTHORITY January 2007

Beginning Cash Balance (1-1-07) $218,131.40

Cash Receipts -

Cash Expenditures ($68,107.59)

Ending Cash Balance (1-31-07) $150,023.81

______Jack M. Joseph Treasurer

Attachment 4

Orangeline Development Authority Fiscal Year 2006-2007 Member Contributions

City Date Received Amount

Maywood 9/28/2006 $ 2,840.28 Downey 10/2/2006 8,290.00 Huntington Park 10/6/2006 8,464.45 Cerritos 10/10/2006 13,858.00 Palmdale 10/11/2006 26,024.75 Bellflower 10/12/2006 14,526.30 Cudahy 10/16/2006 4,558.18 South Gate 10/16/2006 19,249.50 Los Alamitos 10/17/2006 1,537.50 Bell 10/19/2006 4,000.58 Vernon 10/20/2006 5,639.55 Artesia 11/6/2006 4,945.63 Paramount 11/9/2006 11,548.68 Santa Clarita 12/1/2006 31,388.58

Total to Date $ 156,871.98