1. Cost to taxpayers/communities
The public has known that AAF is pursuing a Railroad Rehabilitation and Improvement Financing (RRIF) loan since March 15, 2013. As required by the RRIF process, an Environmental Impact Study was (EIS) was conducted. Final report released on September 19, 2014. The public was only made aware of AAF’s alternate financing plans last week – on Oct. 7.
AAF’s latest financing plan is via tax-exempt bonds issued by state or local governments. Known as Private Activity Bonds, or PABs, these instruments are typically used for projects with significant private involvement. AAF is pushing for immediate approval. The first critical vote is next week, Oct. 21, when the Brevard County Commission is scheduled to meet and vote on the Brevard PAB.
The PAB approach is a disservice to Florida citizens. So is AAF’s effort to push Brevard County to conduct an immediate vote — What’s the hurry? We think it boils down to this: AAF is afraid of the impending election next month and with it the possibility that election results may reduce state and local support.
Regarding RRIF funding, that approach is also deeply flawed, as it would force taxpayers to pay huge subsidies to support AAF’s $1.6 billion request. We do not know how much it would cost the public should AAF borrow the money via PAB – and AAF and government agencies cooperating with it aren’t saying.
But what we do know is this: Taxpayers (Florida and U.S.) have not been presented with information detailing how much PAB funding would cost in terms of lost tax revenue, which is the natural byproduct of any tax-exempt bond. Nor it is clear how taxpayers would be impacted if AAF defaults on the PAB and fails to repay – and given that passenger trains, historically, don’t make money that is a very real possibility.
In summary, we believe that the PAB financing bid is just another example of AAF trying to manipulate the public. Ditto for RRIF. Both are financial rip-offs cloaked in slick marketing doubletalk.
2. Who wrote the EIS: FRA or AAF?
The EIS, technically, is an official document of the Federal Railroad Administration (FRA), which is supposed to make sure that Florida and its citizens won’t be harmed by the AAF project. But as noted on Page 1-7 of the EIS, the 500-plus page document was researched and written by a contractor that was selected and paid for by AAF. As such, we were not surprised that the document resolves all difficulties and doubt in favor of AAF.
Simply put, the EIS is a self-serving study masquerading as a government document, and should be regarded accordingly. To that point, the EIS is disturbingly consistent: It paints AAF in the rosiest of terms and completely dismisses the raft of community issues—notably, the safety and environmental risks associated with the project—now being raised by CARE and other organizations across the state.
3. Financial assumptions and missing data
Nowhere is the self-serving nature of the EIS more apparent, perhaps, than in the string of financial assumptions touted as evidence that AAF is good for Florida. The problem: The EIS makes its case on the basis of data that AAF and cooperating government agencies will not share or reveal publicly.
The EIS contains not one word about what AAF will charge for a ticket, for example. Nor does it offer any meaningful (verifiable) numbers on ridership. And yet, these two areas – ticket sales and ridership – are used to justify and drive virtually all of the report’s financial conclusions.
Example: In 2016, AAF claims that 335,628 auto vehicle trips will be diverted to AAF. By 2019, that number will rise to 1,165,942, according to AAF. Overall ridership, it continues, will grow to 3.5 million (annual) by 2019. How were these calculations made, exactly? We don’t know, and the EIS does not say. AAF also won’t say – and in fact to date it has steadfastly refused to make its ridership projections available for public review. As for ticket prices, all AAF will say is that they will be competitive with other modes of transportation. In other words “trust us” – even though there is no reason for Florida communities to trust them.
The specific data that the EIS does set forth—such as the one minute dwell time at the stations and the ability to schedule freight and passenger trains so that several go over bridges simultaneously — is fanciful at worst, and hopelessly optimistic at best.
Is AAF’s secret data verifiable, or even plausible? There is no way for us to know, at this point, because AAF and its government supporters won’t allow public scrutiny.
CARE says: Stop playing games with our lives and our communities, AAF – Floridians deserve better.