Taxpayers Protection Alliance: DC Streetcar Project

D.C. STREETCAR PROJECT: Millions Spent on Marketing and Mistakes

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TAXPAYERS PROTECTION ALLIANCE The Taxpayers Protection Alliance (TPA) is a non-profit non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy. TPA, through its network of taxpayers holds politicians accountable for the effects of their policies on the size, scope, efficiency and activity of government, and offers real solutions to runaway deficits and debt. Ultimately recognizing that the greatest power of change rests with the millions of Americans across the country who are ready for a smaller, more accountable government, TPA is a catalyst for connecting taxpayers to their government officials.

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D.C. Streetcar Project: Millions Spent on Marketing and Mistakes

Washington D.C. residents and visitors have been told they will benefit greatly from the new streetcar system that remains under construction in the nation’s capital city. The District Department of Transportation (DDOT) claims the DC Streetcar, as it is officially titled, “will make travel within the District much easier for residents, workers and visitors, and it will complement the existing transit options.” DDOT claims that the multi-million dollar taxpayer-funded project is needed because the existing Metrorail and Metrobus does not have the necessary infrastructure to connect certain neighborhoods, according to DDOT officials.

Moreover, they insist the new streetcar system, which has been undergoing “testing” remains under construction without an official start date,1 could help to revitalize commercial corridors, lessen traffic congestion and alleviate pollution. At least those are the overarching objectives the project’s government boosters have identified in their public pronouncements. But right from the beginning, the project has been beset with financial difficulties that suggest taxpayers should not expect to see a tangible return on their investment anytime soon.

Fares on the DC Streetcar are expected to be competitive with Metrobus. But, even with charging a fare, any shortfall will be picked up by taxpayers. Every time a commuter steps on a streetcar the cost will be absorbed by D.C. taxpayers.

The cost of an item doesn’t go away because it is shifted somewhere else. Moreover, the Taxpayers Protection Alliance (TPA) has identified more than $2 million in costs devoted to marketing, public relations and communications.

Now that another calendar year has passed with the streetcar project failing to provide any passenger service, it is a good time to take stock. It’s also a good time for taxpayers to ask why they are footing the bill for such hefty communications costs.

TPA has obtained documents from the D.C. city government that show of the larger individual line items are costing millions of dollars.

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A February 12, 2016 WAMU news report says that “The city’s first streetcar line since 1962 may start carrying passengers along the Northeast D.C. corridor ‘on or after Feb. 26,’ according to a letter notifying federal transportation officials the $200 million, 2.2-mile line is ready after months of system testing and document reviews.”

history of the streetcar project In the early 2000s, city officials initially conceived of a streetcar design ranging from 20 to 40 miles, with the first phase open for business in 2006. Since then, the project has been greatly altered and downsized from its original design.

In its latest incarnation, the current DC Streetcar consists of just over two miles of surface light rail stretching east of Union Station along H Street and Benning Road.

2.4 Mile Service Area for the D.C. Streetcar

That’s a far cry from the original layout that would have made use of the now-defunct CSX railway tracks that run from the Minnesota Avenue Metro station to the Anacostia Metro station and, from there, cross the 11th Street Bridges before connecting with the Navy Yard and Waterfront Metros.

That sensible plan was scrapped after the city could not come to terms with CSX. The proposal then morphed into the current limited streetcar project.

Shortly after the D.C. City Council approved $310 million to co-fund the project in September 2002, its partners in Metro radically altered their own transportation schemes, leaving city officials in the lurch. At this point, the D.C. government assumed full control of the plan.

After parting ways with Metro, city officials then brought in a contractor to build a 1.3 mile line between what has become the Joint Base-Anacostia-Bolling military installation and the Anacostia Metro station. The Anacostia phase of the plan never received the necessary right-of-way approvals from the U.S. Military or Metro and was abandoned in 2012. What is now the DC Streetcar project is little more than a limited effort to connect neighborhoods between Metro stations along the H Street and Benning Road corridor in the northeast quadrant of the city.

The bottom line is that for the past 10 years Washington D.C. city government has spent about $200 million in taxpayer money on a streetcar system that still doesn’t service any commuters, local residents or out-to-town visitors.

The bottom line is that for the past 10 years Washington D.C. city government has spent about $200 million in taxpayer money on a 2.4 mile streetcar system that still doesn’t service any commuters, local residents or out-to-town visitors. That works out to more than $80 million per mile. In December 2015, the DDOT announced the beginning of Pre-Revenue Operations (PRO) for DC Streetcar as the agency prepares the system for safety certification in anticipation of its first passengers. Basically, PRO simply means the streetcars will run without passengers along H Street and Benning Road.

In a press release announcing the simulated runs, the DDOT said the PRO process would last for about three weeks but could be “extended as needed.”

All told, there are five cars in the streetcar fleet that will service customers every 15 minutes free of charge, except on Sundays when the streetcar will not operate.

Apparently, the DDOT previously asked the Federal Transit Authority (FTA) to step in and accelerate the pace of the safety certification process, but the FTA turned down DDOT’s request, according to the WAMU report.

“D.C. Streetcar Project: Millions Spent of Marketing and Mistakes”

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concerns and questionable costs revealed This past summer, TPA submitted a Freedom of Information Act (FOIA) request to the DDOT requesting all expenditures related to the streetcar project between January 1, 2011 and July 27, 2015.

Specifically, we asked “for expenditures related to any marketing materials, as well as any print, Internet, radio or television advertising, used for marketing or educational purposes for the DC Street Car.” The documents, emails, and invoices associated with this report were so numerous and complex that DDOT charged TPA $1,800 to process the FOIA request.

In addition to the marketing costs, we uncovered a disturbing theme in the files we received where DDOT acknowledges “Potential Issues and Risk” with the DC Streetcar project that address the continuous delays.

This acknowledgment, which appears multiple times in the FOIA documents, reads: “Same as last month. DDOT not revealing a realistic opening time frame to the public is a significant risk.

Bad news does not get better with time. Holding this information will likely result in losing the substantial ground that has been gained over the past two years with regard to public trust. Even at this late date, there will likely be backlash as to why the timeline was not revealed sooner, as reporters and the public will not believe that DDOT hasn’t known this for at least a few months.”

“D.C. Streetcar Project: Millions Spent of Marketing and Mistakes”

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records reveal high communications and marketing costs The files TPA received from DDOT show the agency spent hundreds of thousands of dollars on marketing, public relations and communications efforts. Because some of the information is redacted, it’s hard to know what specifically was involved under the general banner of “communications.” But it is clear that these efforts involve substantial expenditures that demand greater scrutiny.

Website With any project today, there is bound to be a website. The DC street car is no exception. A 2012 invoice (p. 10) shows a projected cost of $174,456.95 for the website. Included in the costs are “website content development, webfonts and templates punchlist items.” Spending $174,000 on a website is excessive and unnecessary and doesn’t help the streetcar carry one passenger. Upon reviewing the site, professional website developers told TPA the website should cost, at most, $30,000 to build.

Communications and Marketing Many other items obtained through FOIA requests reveal the high costs associated with the DC Streetcar under the banner of communications and marketing.

How much should it actually cost DDOT to invest in necessary marketing costs to reach their target audience? That’s a fair question to raise in anticipation of the late February opening. A 2012 invoice lists $4,500.00 and $5,643.87 (p. 6 and 7) on communication and outreach expenses. A 2013 invoice puts these costs at $45,140 (p. 47). That sounds more like it. But that’s not all.

A 2013 invoice (p. 5) for example, identifies $528,442 in “communications and media” expenses on a form titled, “Indirect Costs Detailed Sheet.” That same 2013 FOIA record includes a document entitled “1.7 Communications,” which identifies project managers, project assistants, project coordinators and communication strategists that rack up more than $89,396.53 in total costs.

A separate 2013 bill (p. 2 and 68) for “communications and media” expenses comes in at $78,607.80. Another bills taxpayers for $750,559.60. This $750,000-plus figure is featured on Invoice No. 3687.07-35. This invoice from August 1, 2013, identifies fees for communications strategists, project director, senior project managers and project coordinators. Costs for “Communications and Outreach Activities” that were just 39 percent complete were billed at $598,439.11.

The high costs of communications and media continued in later years, according to the FOIA documents. A 2014 invoice (p. 2) lists “communications and outreach” costs at $100,277.15 and a 2015 invoice includes $104,498.02 (p. 6) in communications and marketing costs. Once again, project coordinators, senior project managers and communications strategists are listed on this form.

Expenditures listed under “communications and outreach” continued through 2015, but at lower totals, according to DDOT records. These items range between $40,000 and $60,000. One 2015 invoice listed (p. 3 and 6) this amount at $43,502.32 and another at $104,498.02.

Three examples of taxpayer-funded items given out at DC Streetcar events. Photos courtesy of DCStreetcar.com.

“D.C. Streetcar Project: Millions Spent of Marketing and Mistakes”

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Conclusion If the DC Streetcar does begin service in February, it will be the first time since January 28, 1962 that streetcar services were offered in the city. The District, like many urban settings across the country, shifted from streetcars to buses in the latter half of the 20th Century in order to benefit from greater route options and to respond to rider demand.

The fact that millions of dollars have been allocated for these purposes with nebulous explanations raises serious concerns.

The DDOT holds up Portland, Seattle and Tampa as examples of successful contemporary streetcar operations that could be emulated in D.C. City planners claim streetcar operations could boost economic growth. The comprehensive District of Columbia Transit Improvements Alternatives Analysis probed into the current gaps that exist in transit services. The findings here deserve careful attention and consideration. But so do the high costs and continued delays of the DC Streetcar project. While there is certainly a legitimate need for public outreach with a project that could directly impact the lives of local residents in the northeastern part of the city, the fact that millions of dollars have been allocated for these purposes with nebulous explanations raises serious concerns.

Streetcars rounding Thomas Circle.

Photos courtesy of DCStreetcar.com.

“D.C. Streetcar Project: Millions Spent of Marketing and Mistakes�

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