Federal money could cover tunnel overruns

July 9, 2008
Tribune Review

Port Authority of Allegheny County will seek permission from federal officials to spend grant money typically used to improve its bus and light-rail network to cover cost overruns for the North Shore Connector.

Authority officials plan to cover the $435 million project’s cost overruns by taking an unknown amount of money from its federally funded capital budget — even though federal officials have said they would not pay more for the light-rail expansion between Downtown and the North Shore.

The money problems hit as the first of two transit tunnels under the Allegheny River is expected to be completed this week.

“This certainly raises concerns,” said Lee Derr, chief counsel for state Sen. Jane Orie, R-McCandless, the majority whip.

Republicans want legislation passed that would prevent more state money from being directed toward the project. Another proposal would establish auditing guidelines and add state appointees to the authority’s governing board. Now, the nine-member board is appointed by the county’s chief executive.

The transit agency says there’s nothing wrong with dipping into its capital accounts, which this year total $242 million.

“We’ll just move certain projects out a year or two,” authority spokeswoman Judi McNeil said. “That would give us the money to do the contracts that came in over their estimates.”

Federal Transit Administration officials are not certain about the plan, said FTA spokesman Paul Griffo.

“The FTA looks forward to receiving a viable recovery plan for the North Shore Connector project from the Port Authority soon,” he said.

Construction contracts for the first phases of the work, which will extend the T just more than a mile beyond the Gateway station, will put the cost of the work above its $435 million budget. A specific amount is not yet known as details have not been released. Because work will continue into 2011, further cost increases are possible.

By taking capital money, the authority could delay some improvements to its system through the next decade, officials said.

“They’re really in an unfortunate situation right now, and they don’t have a lot of good options,” said U.S. Rep. Mike Doyle, D-Forest Hills. “That may mean somewhere along the line that something doesn’t get off the ground as quickly.”

There are no alternative plans to pay for the cost overruns, especially as the increasing costs of construction materials are causing problems across the nation, McNeil said.

“Every other major city with a transit system also is running into cost overruns and they’re running to the FTA,” she said. “We’re having the same funding issues that everyone else is.”