East San Jose light rail extension faces critical vote

A critical light rail extension project more than two decades in the making is set to begin major construction by April, if transit leaders give it a final OK.

The Eastridge to BART Regional Connector, held up as a significant piece in addressing longstanding transit inequities in the area, is desperately needed, the transit agency says. The connector project will run light rail trains 2.4 miles on an elevated track along East Capitol Expressway from a new ground level station at VTA’s revamped Eastridge Transit Center north to a new elevated station at Story Road, and on to the Alum Rock Station, offering a link to Milpitas BART Station.

Adding the connector makes good on promises to the lower-income, largely Latino East San Jose community for improved transportation that will better connect residents to jobs, recreation and education, officials and advocates said.

“For decades, the east side of San Jose has faced incredible environmental challenges that have done away with our quality of life,” Jonathan Perez, a policy advisor for District 8 City Councilmember Domingo Candelas, said during a hearing on the project. “The regional connector is important because it will allow our residents the opportunity to use reliable and safe public transit to shop, get to work and visit family.”

The project is set to cost about $653 million, the agency said, which includes money already spent on prior phases. The total is about $122 million over estimates due to a construction contract bid of $437 million, which came in roughly 39% higher than the transit agency’s own estimate of $315 million.

The VTA board of directors will consider awarding the construction contract to a joint venture of two companies — Sacramento-based MCM Construction Inc. and New York City-based RailWorks Corporation — at its March 7 meeting.

The project is funded primarily by $313 million from Measure A, a tax measure approved by voters in 2000, and by $130 million from Regional Measure 3, a 2018 bridge toll increase ballot measure. Roughly another cumulative $86 million is being kicked in by state transportation grants and funds including the gas tax.

However, to cover the increased construction costs, VTA officials are suggesting dipping into the agency’s $217 million in reserves, known as the debt reduction fund, to siphon off $115 million. The cost could be covered with additional Measure A funds, but until the ballooning costs for the $12.2 billion BART to downtown San Jose project are finalized, officials said they don’t want to take more money from that pot.

Greg Richardson, the agency’s head of finance, told the board reducing the reserves now could mean it’s completely depleted sooner than expected, if the agency hits any general budget deficits in coming years.

“We recognize the risk, we believe it’s a risk worth taking, especially for this project,” Richardson said.

Despite the significant cost increase and the risks, officials appear likely to move ahead with the project, citing the severe need for connectivity, and the near certainty of increased costs if the project is delayed any further.

“As we’ve discussed with BART, if we’re committed to building it, which I think we are, we need to get going and that’s how we control costs better than anything else,” San Jose Mayor Matt Mahan, a VTA board member, said during a workshop on the project last Friday.

Ken Ronsse, VTA’s deputy director of transit operations, said his team built in a 15% contingency fund for construction, and “several percent” of contingency for the rest of the project to account for any possible cost overruns.

Ronsse blamed the large gap between the VTA estimate and the lowest bid on a series of factors, including receiving only three bids, but largely attributed it to agency engineers projecting the costs of concrete and electrical elements to rise much slower than the contractor expects.

Carolyn Gonot, VTA’s general manager, said she realizes the delta between estimates and the lowest bid “sounds horrible,” but said “it is actually really good,” as some other large project bids have come in as much as 50% or 80% higher than internal engineer estimates. She also pointed to the “volatile” and increasing cost of labor as factors.

The contractor also proposes completing the project in about three and half years of work days, 22% faster than the agency estimated.

A long ride

The project’s earliest designs and engineering work dates back to the early 2000s, and due to the recession beginning in 2007, the project was started in phases. Pedestrian and bus line improvements were made along the corridor through 2012, and the Eastridge Transit Center replacement was completed in 2015.

The agency has also spent about $30 million over the past three years acquiring property needed for the trackway and relocating major utilities, including a power transmission line and a 24-inch water line in preparation for construction.

If approved, Ronsse said construction will begin in April and finish in time to allow light rail service to begin in 2028.

Tatiana Villaseñor, a community organizer with the Latina Coalition of Silicon Valley, told the board Latinos and East San Jose residents have long done their part in using public transportation.

“As the greater San Jose continues to urbanize, our Latina residents must be able to have reliable transportation,” Villaseñor said. “This is an investment for Latinas, their families and our community.”