Tory Gattis of the smart Houston Strategies blog has been doing his typically excellent job of covering developments on the proposed expansion of the Houston Metro light rail line. Neither an over-the-top advocate nor a grizzled pessimist about urban rail systems, Tory takes a refreshingly measured view that such systems should attempt to maximize usefulness while being a part of an integrated urban mobility plan that doesn’t place all urban mobility eggs in one transit-type’s basket.
The wisdom of Tory’s approach is reflected by what is currently playing out in Las Vegas, where Sin City’s new $650 million, 4.4 mile monorail project just experienced the worst monthly ridership in the system’s 18-month history (earlier post here). Although comparing Houston’s light rail system to the Las Vegas monorail is bit akin to comparing apples and oranges, it is noteworthy that the poor performance of the Vegas monorail has contributed mightily to the junk bond rating of the Las Vegas Monorail Co. bonds that were used to finance the system. Now, the Vegas transit authority finds itself unable to sell bonds at a realistic price in order to finance construction of logical expansions of the system, such as an extension to McCarron Airport.
Read the entire article because it is a wonderful reminder to us of how financial logic and constraints are abandoned in the face of such governmental boondoggles. For example, what do you think the Vegas transit authority did in the face of a system that is generating less than half of the amount necessary to pay operating expenses and debt service, lost $20 million last year, and is generating far fewer riders than projected?
The transit authority increased its base one-way fare from $3 to $5.
But wait, pointed out a spokesperson for the transit authority, that cool move generated an almost 24% increase in monthly revenues from a year ago even though 18% fewer riders used the system. Thus, even though the system needs over a 50% increase in monthly revenues to approach break even status, the transit authority’s spokesperson reasoned that an anecdotal month’s worth of higher revenue indicates that a drastic ridership increase won’t be needed to break even. According to the transit authority, all that is needed is a quadruple increase in the monorail’s marketing budget in order to attract more riders, presumably high-rollers who enjoy moving from casino to casino. Often.
So, how long do you think it will take for the Vegas monorail to be converted into Vegas’ newest rollercoaster attraction? ;^)