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Neighborhoodsby Mark Reutter11:02 amJul 24, 20140

As Red Line costs rise, city and county face prospect of cash payouts

ANALYSIS: Mayor Rawlings-Blake acknowledges what has been apparent for awhile – city will have to make a cash contribution for the Red Line

Above: An artist’s sketch of Red Line trains near the Baltimore County terminus at Woodlawn.

It always seemed an offer too good to be true: construction of Baltimore’s Red Line would involve only state and federal funding – and the city and county would be bestowed with a 14-mile transit line without paying any “local match.”

Turns out it was.

In recent months the financial curtains of the Red Line have parted to reveal a $250-million “hole” in the construction budget – the result of rising Red Line costs (now projected at $2.6 billion) and a lower share of expected federal funding.

And who’s left holding the bag?

As The Brew disclosed last March, the city is now on the hook for $200 million and the county for $50 million. But the Maryland Department of Transportation had an answer to those scary numbers – the local match could be largely or wholly matched by “in-kind” contributions, such as giving the state the right-of-way for Red Line construction.

Last month, Baltimore County Executive Kevin Kamenetz punctured this sanguine scenario.

In a letter to James T. Smith, a former Baltimore County executive who is now secretary of MDOT, Kamenetz said he was “clearly disappointed” that “there is now an unanticipated local match involved in the Red Line’s completion.”

He said his administration was willing to make $26.5 million of in-kind contributions (such as eight acres of right-of-way near Woodlawn), but doesn’t plan to fork out any cash to make up the $23.5 million needed for the county’s $50 million match.

“I must protect Baltimore County taxpayers,” he told Smith.

How Much Cash?

Yesterday, Mayor Stephanie Rawlings-Blake acknowledged that the city may have to cough up what could potentially amount to tens of millions of dollars to meet its $200 million match.

“It will be a combination of what you would call in-kind and cash,” she disclosed.

Asked how much cash might be needed, she said, “I don’t have that exact number in front of me.” (Her spokesman later said a breakdown of cash and in-kind contributions “won’t be available until negotiations have concluded and we have a final agreement,” which is expected in September.)

Asked what revenue sources the city might tap, the mayor didn’t say except to note that increasing the property tax rate would “certainly” not be her “first option.”
FULL TEXT of Red Line Q & A with Mayor Rawlings-Blake
Repeatedly yesterday the mayor voiced her support of the Red Line, whose projected price tag has risen from $2.2 billion to $2.6 billion since 2011, while the percentage of federal aid has declined from 48.5% to 34%.

Cost Overruns

Hidden within these figures is another important issue – cost overruns. (Remember Boston’s “Big Dig” central artery highway tunnel whose price ballooned to a fantastic $22 billion, according to the Boston Globe?)

The federal government will not pay for transit construction overruns, leaving Maryland taxpayers, through the state Transportation Trust Fund, and local governments responsible.

Asked about the specter of cost overruns (which could throw a monkey wrench into her 10-year financial plan), Rawlings-Blake responded, “We are very aware of the potential of the increasing cost of the Red Line. . . and we are doing everything to avoid it on our end.”

However, “if that is a bridge we have to cross because of increased costs, we’ll cross that bridge. But we’re not there yet.”

Critics say the city has already crossed the bridge by not objecting to the tunnel proposed for the Red Line through downtown Baltimore, Harbor East and Fells Point.

The 3.4-mile tunnel – and five underground stations – could consume two-thirds of the construction cost of the entire line, according to projections that are approximate at best.

The Right Rail Coalition, a group of southeast homeowners and transportation activists, is calling for the tunnel segment to be deferred and for the Maryland Transit Administration to concentrate on building the western portion of the line.

The Red Line is projected to go from Woodlawn/Social Security through downtown Baltimore to Johns Hopkins Bayview Medical Center. (MTA)

The Red Line is projected to go from Woodlawn/Social Security through downtown Baltimore to Johns Hopkins Bayview Medical Center Campus. (MTA)

Where’s the Money to Come From?

While Kamenetz has publicly disclosed how the county proposes to achieve its in-kind contribution, the Rawlings-Blake administration will not disclose such information until after negotiations with the state had concluded “and we have a final agreement,” Kevin Harris, the mayor’s spokesman, said yesterday.

Responding to a reporter’s questions after the press conference Harris said the mayor “has been very clear that she will not seek an increase in taxes or fees to pay for this project.”

So if not raised through property taxes or special fees, how might the city’s cash contribution be met?

Harris responded in an email:

“The city and MDOT are working together daily to identify and agree on what actions may be taken by the city to benefit the project, reduce costs and leverage existing resources wherever possible. Our mutual goal is to support and deliver the project for the city and the region while maintaining fiscal responsibility, continuing to deliver city services and minimizing impacts on our residents.”

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