Photo by thisisbossi on Flickr.

Last Tuesday, DC Council chairman Phil Mendelson announced, less than 24 hours before the only vote on DC’s budget, that he was proposing slashing funding for the streetcar. The money would pay for, among other things, a package of tax cuts. What does this mean for the streetcar?

It’s been difficult to answer that question, because Mayor Gray’s budget office and the DC Council budget office don’t agree. Especially on Tuesday and Wednesday, with little time to understand the change, dueling analyses clouded the picture. It’s starting to come into focus, though questions still remain.

There is still funding to build streetcars at a slow pace. And DC could always fund more lines once a few lines get done. But the Gray administration says Mendelson’s change may halt exactly the mechanism the District Department of Transportation (DDOT) hopes will get the project to move faster, stop having so many delays, and get out of the mire it’s been in: a partnership with a consortium of companies to design, build, operate, and maintain the streetcar.

Does this affect the H Street streetcar?

It doesn’t appear so. The first segment of the streetcar will run from behind Union Station, along H Street and Benning Road to Oklahoma Avenue, near the Anacostia River. That is under active construction and will open ... sometime. I’m hearing maybe the end of 2014. That’s frustratingly long and disappointing since until the very end of last year Gray was promising it would open in 2013.

DDOT has already done studies to continue the line to the Minnesota Avenue Metro. According to information from Gray spokesperson Pedro Rebeiro, the budget still has funding that would pay for that segment.

What about the rest of the system?

The day of the budget vote, Rebeiro released this side-by-side comparison arguing that the cuts would leave DC about $100 million short of finishing the line from H Street west to K Street downtown and then to Georgetown.


It’s worth noting that the K Street part would get a dedicated lane (for streetcars and buses). There has been a fair amount of criticism of streetcars that only run in mixed traffic for their whole length; this would not do that if the “K Street Transitway” gets built.

Why does the Council budget office say the money isn’t necessary?

Chairman Phil Mendelson makes a few arguments, but two main ones. One is that the mayor was putting too much money into the streetcar than the budget could sustain. Gray’s budget office wanted to basically look at the amount of revenue DC earned in Fiscal Year 2016 and then of whatever goes above that, into the future, one-quarter would go to the streetcar.

Council budget director Jen Budoff says that this is unsustainable, that a lot of that revenue growth is needed just to pay for rising costs in the base budget and within 5 years this financing system would get so big it would cut into the base budget. Gray’s budget director Eric Goulet says Budoff is wrong.

Mendelson’s second argument, which got a lot of traction with transportation chair Mary Cheh and at-large councilmember David Grosso, is that DDOT hasn’t been spending money at nearly the rate this would bring in. It built up a surplus of about $100 million in accounts (or so says Budoff and Cheh’s staff; Goulet says that’s not real, while the council folks suspect the administration was just trying to hide it).

Mendelson dedicated about $50 million a year to the streetcar, which he argues is enough to keep the program moving forward.

If DDOT isn’t spending money very fast, why does it need more now?

Because DDOT wasn’t planning to keep on building streetcars the way it had been. Rather, it was going to drop da bomb. I mean, a DBOM — a Design, Build, Operate, and Maintain contract.

A number of transportation design, engineering, and construction firms have joined together in several consortia to bid for this contract. DDOT was going to soon narrow the field to about three. Those three would then start an intensive design process to actually work out how they would build the streetcar system on K Street, a north-south line along or near Georgia Avenue, and a line in Anacostia over the river to Buzzard Point where it would connect with the north-south line.

This would include key questions like how to run streetcars without overhead wires. The H Street line will have them and they’re now legal outside of viewsheds, but there’s no way wires were going to cross the Mall or North Capitol Street or pass by Farragut Square.

The consortia include streetcar makers who have their own wireless technologies, some with batteries, some with a third rail that only activates when the streetcar runs over it, and more.

But these consortia are going to have to sink millions of dollars into just working out the designs and all of the details. That’s par for the course in big construction projects (and profits on the other end cover this risk), but they’re not going to bid if they think DC might not hire anyone, or will build only a piece and then pull the plug because it doesn’t have the money.

The Gray administration says that DC needs this dedicated revenue stream now to persuade bidders that the city is serious, and that they may have to withdraw or at least strongly curtail the DBOM bidding with the current budget. Mary Cheh, who says she doesn’t want to see the DBOM go away, is asking whether that’s absolutely necessary, or whether DC could still persuade the consortia to bid, then come up with the money once it’s actually time to sign a contract.

But Gray argues that it’s going to be very hard to come up with the $800 million over 5 years (for the initial 22-mile system) and more (for the rest of the streetcar vision) in the future. DC won’t just repeal the tax cuts in a year. Mendelson has spent a lot of the rest of the money on other things, and DC’s debt cap limits how much the city can borrow beyond what’s in its capital budget.

Who’s right?

Probably both are accurate, from the perspective of each side. It does seem that the full concept of hiring a consortium and turning them loose to build a citywide streetcar network is now less likely, or if it does happen, might be smaller in scope. However, not everyone on the council, even those who support building a streetcar system, is entirely comfortable signing off on that just yet.

Mendelson’s idea, and that of the Committee of 100, is that DC needs to first plan everything out in great detail, then have public input on the plans, then get council approval, and then it can get funded. This is a common way of doing government projects.

In business, especially in technology, organizations are moving away from this way of doing things. That’s because often it takes so long to design things that it delays a project, and once you actually start building, you learn more about what you need. Companies and governments are notoriously bad at figuring out all of the issues beforehand — this was one big factor in the Healthcare.gov fisasco.

Ken Archer epxlained in detail why a design-build process can work better for governments as well as private industry. But it can cut the public and elected officials out of the process somewhat. If the agency is good about getting input along the way, and we can believe they will make good choices as the project proceeds, it can be a big time-saver.

Unfortunately, DDOT has not established this level of credibility in recent years. Far from it. And that meant public understanding was shallow and support was thin, so when Mendelson wanted to take it away and offered something (tax cuts) which had broad appeal, most didn’t put up a fight.

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David Alpert is the founder of Greater Greater Washington and its board president. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He lives with his wife and two children in Dupont Circle.