New leadership in Washington, D.C., dealt a powerful and destabilizing blow to the backbone of Silicon Valley’s public transit system Friday.
The Federal Transit Administration announced it’s delaying a decision on whether to award $647 million to help electrify Caltrain — funding that needs to come through by March 1 to keep the project on track.
After years of reviewing the project during the Obama administration, in a brief letter the FTA said it now needs more time and deferred a decision at least until Trump develops his budget proposal.
Failing to receive federal support for the nearly $2 billion overhaul could “kill” Caltrain’s long-planned modernization. With design work already underway, Caltrain now faces potential scheduling delays and increased costs that could derail a project touted to have environmental and congestion-relief benefits.
The FTA’s announcement comes just three weeks after Trump’s new Secretary of Transportation Elaine Chao took over, and shortly after Republican leaders asked for the delay citing concerns about California’s controversial high-speed rail project.
Caltrain supporters were aghast by Friday’s announcement that could significantly stunt what they say is a vital, shovel-ready infrastructure improvement that will create jobs in the Bay Area and across the nation.
“I think today I heard a big door slam and I don’t remember the last time I have felt this dejected for the people of our region. The agencies, the people, the community, the business community, the environmental community, the chambers of commerce [and] riders,” said U.S. Rep. Anna Eshoo, D-Palo Alto. “It’s just a crushing blow and what rubs salt into the wound is this is just straight politics, straight partisan politics. They did it because they could.”
Local representatives were shocked as investing in infrastructure is one of the few issues on which both Republicans as well as Democrats agree, and Trump has consistently voiced commitment to bolstering jobs.
Between electrifying 51 miles of tracks and purchasing new trains, the Caltrain Modernization Program would create over 9,600 jobs; including 1,300 jobs in Florida, Virginia, Wisconsin and Colorado. In Salt Lake City alone, the project is driving an electric train manufacturer to build a new assembly plant that would employ 550 workers, according to Caltrain.
Caltrain Chief Communications Officer Seamus Murphy said the agency was digesting the announcement that could be detrimental.
“This was the final decision needed to move forward with a project that will transform the way we experience transportation on the Peninsula, benefit tens of thousands of Bay Area commuters and create jobs for almost 10,000 people across the country. It will be unfortunate if the only thing standing in the way of moving forward with those benefits is a signature from the administration,” Murphy said. “We’re not sure if this project, in the state of readiness that it’s in today, can survive an unknown period of delay.”
In a brief letter to Caltrain, FTA Executive Director Matthew Welbes said a decision that could have come as early as Friday would be postponed until electrification can be considered in conjunction with Trump’s budget and an FTA report to congress on grant expenditures.
While acknowledging Caltrain’s March 1 deadline to finalize contracts, Welbes briefly explained the FTA requires “additional time to complete review of this significant commitment of Federal resources.”
The entire $2 billion Caltrain project is supported by a range of local, regional and state funding — including a $713 million allocation from high-speed rail that frustrated those opposed to the state’s proposal to create a bullet train from Los Angeles to San Francisco.
Caltrain and high-speed rail became intertwined when the two agreed to share the tracks running along the Peninsula, a move codified by legislation and necessitating electrification.
But with the agreement came harsher scrutiny for Caltrain electrification, particularly from those who view the $64 billion high-speed rail project as a boondoggle stymied by lawsuits and failing to meet requirements of voter-approved bonds.
Apparently emboldened by the White House shakeup, a dozen congressional California Republicans — including House Majority Leader U.S. Rep. Kevin McCarthy and U.S. Rep. Jeff Denham, who is chair of the House rail subcommittee — seized an opportunity to weigh in. In late January, they sent a letter to Secretary Chao urging what they described as support for high-speed rail be delayed until a more thorough review.
A spokesperson for McCarthy did not return requests for comment Friday.
Eshoo, along with dozens of other California lawmakers, sent Chao a response letter emphasizing the funds were for Caltrain’s project, which has independent utility regardless of whether high-speed rail ever comes to fruition.
The recent announcement prompted by Chao was particularly startling since the FTA appeared to support the project as far back as November 2015 when it gave Caltrain’s grant application a medium-high rating.
In May 2016, the FTA said it recommended Caltrain for the Capital Improvement Investment Grant — which ultimately needs congressional approval as part of the annual budget. Since then, extensive vetting has proceeded and a 30-day notice to Congress of the finalized review culminated Friday.
Typically, Congress appropriates $2 billion a year for the capital investment grant, which projects usually receive in annual installments.
A new era for transit?
Local representatives said the news was particularly shocking Caltrain had previously met all of the federal requirements, underwent environmental review, had matching funds from other sources, and received support from the former president.
Murphy said the FTA’s action could have broader consequences.
“We’re certainly in unchartered territory, this is a new administration and we are in a sense the canary in the coal mine because this decision does not just apply to the Caltrain project,” Murphy said. “This is an issue about whether the federal government is going to invest in infrastructure improvements in the way it has in the past.”
After awarding design-build contracts last year, Caltrain has until March 1 to issue a “full-notice to proceed” to its contractors before the agreed upon price could expire. In the last few years alone, the project costs have already ballooned nearly $500 million and the contracts were a way to lock in a price.
The goal was to bring electric trains to riders by late 2020, but immediately following the FTA’s decision Murphy said it’s too early to tell what the fallout will be in regards to scheduling and costs.
Assemblyman Kevin Mullin, D-South San Francisco, has been a loyal advocate and wrote a new law to clarify high-speed rail bond funds could be used on bookend projects like Caltrain. Mullin questioned how Trump’s prior experience and statements aligned with the FTA’s “disappointing” decision.
“I was encouraged by the president’s stated commitment to infrastructure projects. Upgrades to the Caltrain system are absolutely that. As a developer, the president knows the consequences and potential for cost increases due to undue delays. Modernizing Caltrain is a job creator, will better serve the workforce of the Bay Area, and is good for the environment. Win, win, win,” Mullin said in an email.
U.S. Rep. Jackie Speier, D-San San Mateo, who along with Eshoo wrote to Chao about what was at risk should federal funding fall through, sought to sway Trump with his familiar slogan.
“Caltrain is the backbone of the Silicon Valley transportation system and this decision to delay would threaten to break the backbone of this economy,” Speier said in a statement. “To make America great again, the president should order that this grant be made and then join us to turn dirt as 9,600 good American jobs related to this project — spread over 13 states — are created.”