Federal Government Begging Florida to Take High-Speed Rail Money – By Robert Poole

When it comes to spending your tax dollars on trains in Florida, Transportation Secretary Ray LaHood doesn’t want to take no for an answer.

Last Friday, Secretary LaHood announced he’s giving Florida Gov. Rick Scott yet another week to accept $2.4 billion in federal funding for the Orlando-to-Tampa high-speed rail line. Yes, that is the same $2.4 billion that Scott already turned down twice.

More at: http://reason.com/blog/2011/02/28/federal-government-begging-flo

Las Vegas, Birmingham & Salt Lake City Show Continuing Dispersion to Suburbs by Wendell Cox 02/27/2011

http://www.newgeography.com/content/002084-las-vegas-birmingham-salt-lake-city-show-continuing-dispersion-suburbs

What the Census Tells Us About America’s Future – by Joel Kotkin

With the release of results for over 20 states, the 2010 Census has provided some strong indicators as to the real evolution of the country’s demography. In short, they reveal that Americans are continuing to disperse, becoming more ethnically diverse and leaning toward to what might be called “opportunity” regions.

Below is a summary of the most significant findings to date, followed by an assessment of what this all might mean for the coming decade.

More at… http://www.newgeography.com/content/002080-what-the-census-tells-us-about-america%E2%80%99s-future

Hong Kong to Open Land to Reduce House Prices

http://www.newgeography.com/content/002074-hong-kong-response-high-housing-prices-expand-land-supply

City of St. Louis Suffers Huge Population Loss

http://www.newgeography.com/content/002078-city-st-louis-suffers-huge-population-loss

City down to 319,000 in 2010 from 857,000 in 1950. All 2000-2010 growth in the suburbs

The Tampa to Orlando High Speed Rail Line: Protecting the Taxpayers

All parties agree that neither state nor local taxpayers must be liable for cost increases, operating subsidies or the potential return of money to the federal government. The reality, however, is that federal policy requires the state or local government receiving the federal funding to assume these liabilities. When the costs exceed the limited resources of the private consortium, only the taxpayers will be left.

Promises and statements from project promoters will not reimburse the taxpayers when the private consortium fails to pay. The inevitable statements of regret will do nothing to soften the blow.

Protecting the Taxpayers: It would be difficult, but not impossible, to establish guarantees that protect the taxpayers. Nothing less than the following would be required:

More at: http://blog.heritage.org/2011/02/22/the-tampa-to-orlando-high-speed-rail-line-protecting-taxpayers/

What’s in a (Metropolitan Area) Name?

Only two of the world’s megacities (metropolitan areas or urban areas with more than 10 million people) have adopted names that are more reflective of their geographical reality than their former core-based names.

More at…http://www.newgeography.com/content/002069-whats-a-metropolitan-area-name

The Still Elusive “Return to the City”

2010 Census results for first 8 major metropolitan areas (over 1m population)

More at: http://www.newgeography.com/content/002070-the-still-elusive-return-city

Florida Must Not be Party to High Speed Rail Agreement

Re: http://www.wtsp.com/news/local/story.aspx?storyid=176218&catid=8

There is discussion of a bill to authorize a new inter-local agency along the Tampa to Orlando high speed rail corridor to be the recipient of federal funding for the project. It will be important that the state not be involved in any such agreement. The new agency should not be a "sub-recipient." If there is to be a local agency sponsored project, the money needs to be granted from the federal government directly, not through the state.

If Florida is a party to a grant agreement, Florida taxpayers could be liable for cost overruns, operating subsidies and return the federal funding.

Florida High Speed Rail: How to Protect Taxpayers

There is discussion of resurrecting the Tampa to Orlando high speed rail line, on the assumption that this can be accomplished without creating any liability for taxpayers. As this note makes clear, there are substantial hurdles that make achieving this goal nearly impossible.

The starting point must be a guarantee that neither state nor local taxpayers will have any liability, under any circumstances, for increases in capital costs, for operating subsidies or to pay back the federal grant, regardless of whether such circumstances are or could have been foreseen.

This could prove to be difficult, if not impossible, and the minimum requirements of such a guarantee are described below.

(1) Capital cost increases: These will ultimately be the responsibility of taxpayers. It is claimed that the project will cost $2.7 billion. Based upon the international experience, this is a fantasy and cost increases could raise the cost to as much as $5.7 billion (a $3.0 billion increase). There are claims that the private builder/operator would pay any such cost increases. However, no private consortium will have the financial capacity to pay for any such cost increase, nor has any in the past.

(2) Promoters claim that the project will pay for its operating expenses. Few rail systems in the world accomplish this and operating subsidies are likely. Operating subsidies will ultimately be the responsibility of taxpayers. Proponents claim that the private sector will pay any operating subsidies. However, the operating subsidies could become too large for the private consortium to pay.

(3) Any Florida government (state or local) accepting the federal funding would have to guarantee a certain level of service for at least 20 years and would have to pay back the federal government if that level of service is not maintained. This is no idle threat. Florida is already paying millions in subsidies annually for higher service levels on Tri-Rail (Miami) area to avoid a demand to repay one-quarter billion dollars to the federal government.

It is inconceivable for the private company (a company created by other companies, and having limited liability) to have sufficient resources to pay the potential extent of these obligations (at least under normal operating procedures). The private consortium could become insolvent, leaving taxpayers of the government entity accepting the federal grant with the obligations.

The Problem with Private Company Assumption of Liabilities: Under normal circumstances, the companies "partnering" in a consortium have no liability beyond their investment. A consortium could become insolvent and the parent companies would not be required to meet the obligations, leaving taxpayers with substantial obligations.

Protecting the Taxpayers: Thus, the private consortium accepting the liability must take the following actions to protect the taxpayers.

1. Performance Bond: The private companies forming the consortium must post a performance bond in the amount of the highest likely capital cost increase ($3 billion) as well as potential operating subsidies (an amount to be determined) for the period of obligation under the federal grant. This would, in effect, be an insurance policy to guarantee payment by a financially strong third party institution in the event that the private consortium does not pay for all cost increases.

2. Unlimited Corporate Guarantees: The private companies forming the consortium must provide their unlimited corporate financial guarantees for the obligations of the private consortium, including cost overruns, operating subsidies and any eventual requirement to pay back the federal grant.

In view of the confidence of promoters that there will be no cost overruns, these requirements should be no barrier to the project.