By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
I have been doing my best to look at the numbers, based on what I could hear on the tape and what was said at the more recent meetings.
The numbers are not adding up, folks.
The staff says they were counting on the new rail lines costing $40 million a mile to build. But, darn! All of a sudden it's going to cost $70 million.
On the tapes of that first meeting, however, the staff concedes a couple things in response to questions. First, they discovered the new higher cost last year!
Last year? Then what in the hell are they doing telling their own board of directors about it this year?
They also concede that they had built an inflation factor into the original estimates. That $40 million a mile was in Year 2000 dollars, estimated to increase at 4 percent a year. So by 2006, they were already estimating a cost of $51 million, by my calculation.
So even if the staff did get totally blind-sided by the new costs—meaning that they are idiots, which we will get to—that's still a jump of only 37 percent. So that would have put them in the hole more like $370 million, not a billion.
Back to the idiot factor. I looked at the U.S Bureau of Labor Statistics inflation index for heavy construction over this period of time, and I did find numbers that approach what the DART staff is claiming. In some of the years when they were supposedly inflating their costs by 4 percent a year, the costs actually went down. But a more recent surge would bring their per-mile costs to something like $63.5 million.
That's still not $70 million a mile. But maybe they have their own problems—reasons why their costs go up quite a bit faster than the national rate for their industry.
The point is, that surge started in 2004. That was almost four years ago now. The year before, in 2003, heavy construction costs went up 2.1 percent, according to the national index.
But then in 2004 the rate of inflation for heavy construction was 14.8 percent. The next year it was 15.3 percent. In 2006 it was 13.1 percent.
That's a jump of 43 percent in three years—more than three times what they were expecting. But it started almost four years ago. Why in the hell are they only telling the board about it now?
In an e-mail response, DART told me they were waiting for a more complete design and a "more accurate and current picture of our financial situation."
Bad decision. It would have been way better to warn Mom and Dad about the credit card bill before it arrived in the mail. Very bad decision.
But I wonder about Mom and Dad, too, if they're the DART board of directors. At one point in the taped meeting, DART Chief Financial Officer Sharon Leary is explaining cost estimates and time lines for the new route to Irving and DFW Airport. She tells them the original estimate was $643 million in 2010 dollars. Now they think the real cost will be $881 million.
But guess what! They actually only have $575 million in the budget for it. Waaait a minute. If the original estimate was $643 million, why don't they have $643 million in the budget?
Leary tells the board: "In the 2003 financial plan, we had to find $130 million in unidentified Phase II savings to make the plans work, so $130 million was basically pulled out of that project."
When a board member asked her what she meant, Leary explained, "We just said we're going to make cuts in certain projects...you have to do the same amount of work for $575 million as you were going to do at $643 million."
Wait a minute. What does that mean—do the same amount for $575 million as for $643 million? Make bricks from straw?
In my e-mail to DART, I said I couldn't make these numbers add up right. Their response was: "In 2003, approximately $720 million was cut from the Capital Line item of the 20-year Financial Plan." But, they say, "...we could not achieve the desired savings on the current rail expansion projects."
So they whacked $720 million out of the capital budget to make the budget work. But the board never had the political balls to go back to its constituent cities and warn them they were getting $720 million less railroad. So, pardon me, but haven't we just explained the bulk of the missing Big B?
Maybe a third of it is inflation. And the other two-thirds is explained by the missing balls. That means that for the last four years the DART budget and all those railroads they've been promising the suburbs have all been one big fat political lie.
You know, people don't just wake up one day and realize they've misplaced a billion dollars. I wouldn't try that line in court.
Yeah, and on my tape of the meeting I could hear this long soulful silence, which I surmise was the board of directors stroking its collective chin and thinking, "Hoo-boy. These chickens are comin' home to roost, and these are our chickens."